Dish Network 2013 Annual Report Download - page 77

Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS - Continued
67
67
Income (loss) from discontinued operations, net of tax. “Income (loss) from discontinued operations, net of tax”
includes the results of Blockbuster operations which ceased all material operations as of December 31, 2013.
“Pay-TV subscribers.” We include customers obtained through direct sales, third-party retailers and other third-
party distribution relationships in our Pay-TV subscriber count. We also provide pay-TV service to hotels, motels
and other commercial accounts. For certain of these commercial accounts, we divide our total revenue for these
commercial accounts by an amount approximately equal to the retail price of our DISH America programming
package, and include the resulting number, which is substantially smaller than the actual number of commercial
units served, in our Pay-TV subscriber count.
“Broadband subscribers.” During the fourth quarter 2012, we elected to provide certain Broadband subscriber
data. Each broadband customer is counted as one Broadband subscriber, regardless of whether they are also a Pay-
TV subscriber. A subscriber of both our pay-TV and broadband services is counted as one Pay-TV subscriber and
one Broadband subscriber.
Pay-TV average monthly revenue per subscriber (“Pay-TV ARPU”). We are not aware of any uniform standards
for calculating ARPU and believe presentations of ARPU may not be calculated consistently by other companies in
the same or similar businesses. We calculate Pay-TV average monthly revenue per Pay-TV subscriber, or Pay-TV
ARPU, by dividing average monthly “Subscriber-related revenue,” excluding revenue from broadband services, for
the period by our average number of Pay-TV subscribers for the period. The average number of Pay-TV subscribers
is calculated for the period by adding the average number of Pay-TV subscribers for each month and dividing by the
number of months in the period. The average number of Pay-TV subscribers for each month is calculated by adding
the beginning and ending Pay-TV subscribers for the month and dividing by two. During the fourth quarter 2012,
we elected to provide Pay-TV ARPU rather than APRU, defined below, as we believe Pay-TV ARPU provides a
more meaningful metric.
Average monthly revenue per subscriber (“ARPU”). Historically, we have calculated ARPU by dividing average
monthly “Subscriber-related revenue” for the period by our average number of Pay-TV subscribers for the period.
The average number of Pay-TV subscribers was calculated for the period by adding the average number of Pay-TV
subscribers for each month and dividing by the number of months in the period. The average number of Pay-TV
subscribers for each month was calculated by adding the beginning and ending Pay-TV subscribers for the month
and dividing by two. During the fourth quarter 2012, we elected to discontinue providing ARPU as we believe Pay-
TV ARPU, which excludes revenue from broadband services, provides a more meaningful metric.
Pay-TV average monthly subscriber churn rate (“Pay-TV churn rate”). We are not aware of any uniform
standards for calculating subscriber churn rate and believe presentations of subscriber churn rates may not be
calculated consistently by different companies in the same or similar businesses. We calculate Pay-TV churn rate
for any period by dividing the number of Pay-TV subscribers who terminated service during the period by the
average number of Pay-TV subscribers for the same period, and further dividing by the number of months in the
period. When calculating the Pay-TV churn rate, the same methodology for calculating average number of Pay-TV
subscribers is used as when calculating Pay-TV ARPU.
Adjusted free cash flow. We define adjusted free cash flow as “Net cash flows from operating activities from
continuing operations” less “Purchases of property and equipment,” as shown on our Consolidated Statements of
Cash Flows.