Dish Network 2014 Annual Report Download - page 118

DISH NETWORK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
F-12
AWS-4 Satellites. We currently evaluate our AWS-4 satellite fleet for impairment whenever events or changes in
circumstances indicate that its carrying amount may not be recoverable. During the second quarter 2013, we wrote
down the net book value of the T2 and D1 satellites to their fair value and recorded a $438 million impairment
charge on our Consolidated Statements of Operations and Comprehensive Income (Loss). We do not believe any
further triggering event has occurred which would indicate impairment as of December 31, 2014. See Note 8 for
further discussion.
Indefinite Lived Intangible Assets
We do not amortize indefinite lived intangible assets, but test these assets for impairment annually during the fourth
quarter or more often if indicators of impairment arise. Intangible assets that have finite lives are amortized over
their estimated useful lives and tested for impairment as described above for long-lived assets. Our intangible assets
with indefinite lives primarily consist of FCC licenses. Generally, we have determined that our FCC licenses have
indefinite useful lives due to the following:
 FCC licenses are a non-depleting asset;
 existing FCC licenses are integral to our business segments and will contribute to cash flows indefinitely;
 replacement DBS satellite applications are generally authorized by the FCC subject to certain conditions,
without substantial cost under a stable regulatory, legislative and legal environment;
 maintenance expenditures to obtain future cash flows are not significant;
 FCC licenses are not technologically dependent; and
 we intend to use these assets indefinitely.
DBS FCC Licenses. We combine all of our indefinite lived DBS FCC licenses that we currently utilize or plan to
utilize in the future into a single unit of accounting. The analysis encompasses future cash flows from satellites
transmitting from such licensed orbital locations, including revenue attributable to programming offerings from
such satellites, the direct operating and subscriber acquisition costs related to such programming, and future capital
costs for replacement satellites. Projected revenue and cost amounts include projected subscribers. In conducting
our annual impairment test in 2014, we determined that the estimated fair value of the DBS FCC licenses, calculated
using a discounted cash flow analysis, exceeded their carrying amounts.
Wireless Spectrum Licenses. In conducting our annual impairment test in 2014 for our 700 MHz, AWS-4 and H
Block wireless spectrum licenses, we determined that the estimated fair value of these licenses exceeded their
carrying amount. The estimated fair value for the 700 MHz licenses was determined using the market approach and
the estimated fair value for the AWS-4 and H Block licenses was determined using a probability weighted analysis
considering estimated future cash flows discounted at a rate commensurate with the risk involved and the market
approach. Changes in circumstances or market conditions including significant changes in our estimates of future
cash flows or available market data could result in a write-down of any of these assets in the future.
Business Combinations
When we acquire a business, we allocate the purchase price to the various components of the acquisition based
upon the fair value of each component using various valuation techniques, including the market approach, income
approach and/or cost approach. The accounting standard for business combinations requires most identifiable
assets, liabilities, noncontrolling interests and goodwill acquired to be recorded at fair value. Transaction costs
related to the acquisition of the business are expensed as incurred. Costs associated with the issuance of debt associated
with a business combination are capitalized and included as a yield adjustment to the underlying debt’s stated rate.