Dish Network 2014 Annual Report Download - page 134

DISH NETWORK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
F-28
AWS-4 Satellites. As a result of the DBSD Transaction and the TerreStar Transaction, we acquired three AWS-4
satellites, including two in-orbit satellites (D1 and T1) and one satellite under construction (T2). See the table
below for further information.
Degree Estimated
Launch Orbital Useful Life
Satellites Date Location (Years)
Owned:
T1.................................................... July 2009 111.1 15
D1................................................... April 2008 92.85 15
Under Construction:
T2 (1).............................................. NA NA NA
(1) During the fourth quarter 2014, EchoStar purchased our rights to the T2 satellite. See Note 20 for further
discussion of our Related Party Transactions with EchoStar.
Based on the FCC’s rules applicable to our AWS-4 authorizations no longer requiring an integrated satellite
component or ground spare and on our evaluation of the satellite capacity needed for our wireless segment, among
other things, during the second quarter 2013, we concluded that T2 and D1 represented excess satellite capacity for
the potential commercialization of our wireless spectrum. As a result, during the second quarter 2013, we wrote
down the net book value of T2 from $270 million to $40 million and the net book value of D1 from $358 million to
$150 million, and recorded an impairment charge in our wireless segment of $438 million in “Impairment of long-
lived assets” on our Consolidated Statements of Operations and Comprehensive Income (Loss) for the year ended
December 31, 2013. Our fair value estimates for these satellites were determined based upon, among other things,
probability-weighted analyses utilizing the income and/or cost approaches. The estimates used in our fair value
analysis are considered Level 3 in the fair value hierarchy. While we are no longer required to operate an integrated
satellite component, we are currently planning on using T1 and D1 in the commercialization of our wireless
spectrum or for other commercial purposes. If T1 is not used in the commercialization of our wireless spectrum or
for other commercial purposes, we may need to impair it in the future. If D1 is not used in the commercialization of
our wireless spectrum or for other commercial purposes, we may need to further impair it in the future. As of
December 31, 2014, the net book value for T1 and D1 was $326 million and $150 million, respectively.
Satellites Under Construction
EchoStar XVIII. On September 7, 2012, we entered into a contract with Space Systems/Loral, Inc. (“SS/L”) for the
construction of EchoStar XVIII, a DBS satellite with spot beam technology designed for, among other things, HD
programming. During October 2013, we entered into an agreement with ArianeSpace S.A. for launch services for
this satellite, which is expected to be launched during the fourth quarter 2015.
Satellite Anomalies
Operation of our DISH branded pay-TV service requires that we have adequate satellite transmission capacity for
the programming we offer. Moreover, current competitive conditions require that we continue to expand our
offering of new programming. While we generally have had in-orbit satellite capacity sufficient to transmit our
existing channels and some backup capacity to recover the transmission of certain critical programming, our backup
capacity is limited.