Dish Network 2014 Annual Report Download - page 95

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Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK - Continued
85
85
The fair value of our strategic and financial debt and equity investments can be significantly impacted by the risk of
adverse changes in securities markets generally, as well as risks related to the performance of the companies whose
securities we have invested in, risks associated with specific industries, and other factors. These investments are
subject to significant fluctuations in fair value due to the volatility of the securities markets and of the underlying
businesses. In general, the debt instruments held in our strategic marketable investment securities portfolio are not
significantly impacted by interest rate fluctuations as their value is more closely related to factors specific to the
underlying business. A hypothetical 10% adverse change in the price of our public strategic debt and equity
investments would result in a decrease of approximately $71 million in the fair value of these investments.
Restricted Cash and Marketable Investment Securities and Noncurrent Marketable and Other Investment
Securities
Restricted Cash and Marketable Investment Securities
As of December 31, 2014, we had $87 million of restricted cash and marketable investment securities invested in:
(a) cash; (b) VRDNs convertible into cash at par value plus accrued interest generally in five business days or less;
(c) debt instruments of the United States Government and its agencies; (d) commercial paper and corporate notes
with an overall average maturity of less than one year and rated in one of the four highest rating categories by at
least two nationally recognized statistical rating organizations; and/or (e) instruments with similar risk, duration and
credit quality characteristics to the commercial paper described above. Based on our December 31, 2014 investment
portfolio, a hypothetical 10% increase in average interest rates would not have a material impact in the fair value of
our restricted cash and marketable investment securities.
Long-Term Debt
As of December 31, 2014, we had long-term debt of $14.284 billion, excluding capital lease obligations and
unamortized discounts, on our Consolidated Balance Sheets. We estimated the fair value of this debt to be
approximately $14.850 billion using quoted market prices for our publicly traded debt, which constitutes
approximately 99% of our debt. The fair value of our debt is affected by fluctuations in interest rates. A
hypothetical 10% decrease in assumed interest rates would increase the fair value of our debt by approximately $350
million. To the extent interest rates increase, our costs of financing would increase at such time as we are required
to refinance our debt or raise additional debt. As of December 31, 2014, all of our long-term debt consisted of fixed
rate indebtedness.
Derivative Financial Instruments
From time to time, we invest in speculative financial instruments, including derivatives. As of December 31, 2014, we
held derivative financial instruments indexed to the trading price of common equity securities with a fair value of $383
million. The fair value of the derivative financial instruments is dependent on the trading price of the indexed common
equity which may be volatile and vary depending on, among other things, the issuer’s financial and operational
performance and market conditions. A hypothetical 10% adverse change in the market value of the underlying
common equity securities would result in a decrease of approximately $38 million in the fair value of these
investments.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Our Consolidated Financial Statements are included in this Annual Report on Form 10-K beginning on page F-1.
Our selected quarterly financial data for each of the quarterly periods ended March 31, June 30, September 30 and
December 31 for 2014 and 2013 is included in Note 19 in the Notes to our Consolidated Financial Statements in this
Annual Report on Form 10-K.
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.