Dish Network 2013 Annual Report Download - page 187

DISH NETWORK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
F-77
Other Agreements
In November 2009, Mr. Roger Lynch became employed by both us and EchoStar as Executive Vice President. Mr.
Lynch is responsible for the development and implementation of advanced technologies that are of potential utility
and importance to both DISH Network and EchoStar. Mr. Lynch’s compensation consists of cash and equity
compensation and is borne by both EchoStar and DISH Network.
Related Party Transactions with NagraStar L.L.C.
NagraStar is a joint venture between EchoStar and Nagra USA, Inc. that is our provider of encryption and related
security systems intended to assure that only authorized customers have access to our programming.
The table below summarizes our transactions with NagraStar.
2013 2012 2011
Purchases (including fees):
Purchases from NagraStar................................
$
91,712
$
72,549
$
77,705
2013 2012
Amounts Payable and Commitments:
Amounts payable to NagraStar......................... $ 23,417 $ 21,930
(In thousands)
As of December 31,
(In thousands)
For the Years Ended December 31,
Discontinued Operations
Blockbuster. On April 26, 2011, we completed the Blockbuster Acquisition. During the second quarter 2011,
EchoStar acquired Hughes. Blockbuster purchased certain broadband products and services from HNS pursuant to
an agreement that was entered into prior to the Blockbuster Acquisition and EchoStar’s acquisition of Hughes.
Subsequent to these transactions, Blockbuster entered into a new agreement with HNS which extends for a period
through October 31, 2014, pursuant to which Blockbuster may continue to purchase certain broadband products and
services from HNS. This agreement was terminated by Blockbuster effective February 1, 2014. For the years
ended December 31, 2013, 2012 and 2011, Blockbuster purchased certain broadband products and services from
HNS of $1 million, $2 million and $2 million, respectively. These amounts are included in “Income (loss) from
discontinued operations, net of tax” on our Consolidated Statements of Operations and Comprehensive Income
(Loss).
21. Subsequent Events
Related Party Transactions with EchoStar
Satellite and Tracking Stock Transaction with EchoStar. To improve our position in the growing consumer satellite
broadband market, among other reasons, on February 20, 2014, we entered into agreements with EchoStar to
implement a transaction pursuant to which, among other things: (i) on March 1, 2014, we will transfer to EchoStar
and Hughes Satellite Systems Corporation (“HSSC”), a wholly-owned subsidiary of EchoStar, five satellites
(EchoStar I, EchoStar VII, EchoStar X, EchoStar XI and EchoStar XIV, including related in-orbit incentive
obligations and interest payments of approximately $59 million) and approximately $11 million in cash in exchange
for shares of a series of preferred tracking stock issued by EchoStar and shares of a series of preferred tracking
stock issued by HSSC; and (ii) beginning on March 1, 2014, we will lease back certain satellite capacity on these
five satellites (collectively, the “Satellite and Tracking Stock Transaction”). The Satellite and Tracking Stock
Transaction with EchoStar for EchoStar I, EchoStar VII, EchoStar X, EchoStar XI and EchoStar XIV will result in
operating lease obligations of $148 million due 2014, $175 million due 2015, $123 million due 2016, $102 million
due 2017, $102 million due 2018 and $329 million due thereafter. The Satellite and Tracking Stock Transaction
with EchoStar for EchoStar I, EchoStar VII, EchoStar X, EchoStar XI and EchoStar XIV will also result in a