Dish Network 2013 Annual Report Download - page 11

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PART I
Item 1. BUSINESS
OVERVIEW
DISH Network Corporation was organized in 1995 as a corporation under the laws of the State of Nevada. We
started offering the DISH® branded pay-TV service in March 1996 and are the nation’s third largest pay-TV
provider. Our common stock is publicly traded on the Nasdaq Global Select Market under the symbol “DISH.” Our
principal executive offices are located at 9601 South Meridian Boulevard, Englewood, Colorado 80112 and our
telephone number is [phone].
DISH Network Corporation is a holding company. Its subsidiaries (which together with DISH Network Corporation
are referred to as “DISH Network,” the “Company,” “we,” “us” and/or “our,” unless otherwise required by the
context) operate two primary business segments.
x DISH. The DISH branded pay-TV service (“DISH”) had 14.057 million subscribers in the United States as
of December 31, 2013. The DISH branded pay-TV service consists of Federal Communications
Commission (“FCC”) licenses authorizing us to use direct broadcast satellite (“DBS”) and Fixed Satellite
Service (“FSS”) spectrum, our satellites, receiver systems, third-party broadcast operations, customer
service facilities, a leased fiber network, in-home service and call center operations, and certain other assets
utilized in our operations. In addition, we market broadband services under the dishNET™ brand.
x Wireless. In 2008, we paid $712 million to acquire certain 700 MHz wireless spectrum licenses, which
were granted to us by the FCC in February 2009 subject to certain interim and final build-out requirements.
On March 9, 2012, we completed the acquisitions of 100% of the equity of reorganized DBSD North
America, Inc. (“DBSD North America”) and substantially all of the assets of TerreStar Networks, Inc.
(“TerreStar”), pursuant to which we acquired, among other things, 40 MHz of AWS-4 wireless spectrum
licenses held by DBSD North America (the “DBSD Transaction”) and TerreStar (the “TerreStar
Transaction”). The financial results of DBSD North America and TerreStar are included in our financial
results beginning March 9, 2012. The total consideration to acquire the DBSD North America and
TerreStar assets was approximately $2.860 billion. The FCC issued an order, which became effective on
March 7, 2013, modifying our AWS-4 licenses to expand our terrestrial operating authority. That order
imposed certain limitations on the use of a portion of the spectrum and also mandated certain interim and
final build-out requirements for the licenses. As we review our options for the commercialization of this
wireless spectrum, we may incur significant additional expenses and may have to make significant
investments related to, among other things, research and development, wireless testing and wireless
network infrastructure. See Note 16 in the Notes to our Consolidated Financial Statements in Item 15 of
this Annual Report on Form 10-K for further discussion.
Discontinued Operations – Blockbuster. On April 26, 2011, we completed the acquisition of most of the assets of
Blockbuster, Inc. (the “Blockbuster Acquisition”). Blockbuster primarily offered movies and video games for sale
and rental through multiple distribution channels such as retail stores, by-mail, digital devices, the blockbuster.com
website and the BLOCKBUSTER On Demand® service. Since the Blockbuster Acquisition, we continually
evaluated the impact of certain factors, including, among other things, competitive pressures, the ability of
significantly fewer company-owned domestic retail stores to continue to support corporate administrative costs, and
other issues impacting the store-level financial performance of our company-owned domestic retail stores. These
factors, among others, previously led us to close a significant number of company-owned domestic retail stores
during 2012 and 2013. On November 6, 2013, we announced that Blockbuster would close all of its remaining
company-owned domestic retail stores and discontinue the Blockbuster by-mail DVD service. As of December 31,
2013, Blockbuster had ceased all material operations. See Note 10 in the Notes to our Consolidated Financial
Statements in Item 15 of this Annual Report on Form 10-K for further discussion.