View Filing Data

Document and Entity Information - shares	9 Months Ended
Sep. 30, 2014	Nov. 01, 2014
Document and Entity Information
Entity Registrant Name	DISH DBS CORP
Entity Central Index Key	0001042642
Document Type	10-Q
Document Period End Date	Sep. 30, 2014
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Non-accelerated Filer
Entity Common Stock, Shares Outstanding		1,015
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	Q3

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Sep. 30, 2014	Dec. 31, 2013
Current Assets:
Cash and cash equivalents	$ 4,473,600	$ 4,294,475
Marketable investment securities	3,748,839	4,117,326
Trade accounts receivable - other, net of allowance for doubtful accounts of $20,010 and $15,981, respectively	929,850	859,986
Trade accounts receivable - EchoStar, net of allowance for doubtful accounts of zero	41,749	52,602
Inventory	527,816	512,646
Deferred tax assets	65,399	65,457
Other current assets	141,690	143,564
Total current assets	9,928,943	10,046,056
Noncurrent Assets:
Restricted cash and marketable investment securities	80,684	82,780
Property and equipment, net	2,481,313	2,979,323
FCC authorizations	635,794	635,794
Other noncurrent assets, net (Note 4)	580,448	239,556
Total noncurrent assets	3,778,239	3,937,453
Total assets	13,707,182	13,983,509
Current Liabilities:
Trade accounts payable - other	222,303	257,950
Trade accounts payable - EchoStar	288,736	338,788
Deferred revenue and other	873,526	824,478
Accrued programming	1,497,796	1,238,610
Accrued interest	203,958	232,732
Other accrued expenses	417,500	457,775
Current portion of long-term debt and capital lease obligations	1,578,838	1,032,607
Total current liabilities	5,082,657	4,382,940
Long-Term Obligations, Net of Current Portion:
Long-term debt and capital lease obligations, net of current portion	11,771,780	12,577,410
Deferred tax liabilities	1,121,478	1,247,375
Long-term deferred revenue, distribution and carriage payments and other long-term liabilities	234,574	159,684
Total long-term obligations, net of current portion	13,127,832	13,984,469
Total liabilities	18,210,489	18,367,409
Commitments and Contingencies (Note 8)
Redeemable noncontrolling interest (Note 2)	21,408
Stockholder's Equity (Deficit):
Common stock, $.01 par value, 1,000,000 shares authorized, 1,015 shares issued and outstanding
Additional paid-in capital	1,259,311	1,300,101
Accumulated other comprehensive income (loss)	25,438	11,189
Accumulated earnings (deficit)	(5,812,093)	(5,697,772)
Total DISH DBS stockholder's equity (deficit)	(4,527,344)	(4,386,482)
Noncontrolling interest	2,629	2,582
Total stockholder's equity (deficit)	(4,524,715)	(4,383,900)
Total liabilities and stockholder's equity (deficit)	$ 13,707,182	$ 13,983,509

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Revenue:
Subscriber-related revenue	$ 3,553,828	$ 3,408,510	$ 10,582,989	$ 10,131,098
Equipment sales and other revenue	16,312	24,834	63,819	73,402
Equipment sales, services and other revenue - EchoStar	15,232	15,516	47,339	25,540
Total revenue	3,585,372	3,448,860	10,694,147	10,230,040
Costs and Expenses (exclusive of depreciation shown separately below - Note 6):
Subscriber-related expenses	2,072,891	1,938,142	6,131,068	5,718,781
Satellite and transmission expenses	179,401	139,945	506,188	394,748
Cost of sales - equipment, services and other	24,240	24,073	80,451	64,789
Subscriber acquisition costs:
Cost of sales - subscriber promotion subsidies	52,755	61,853	170,149	192,567
Other subscriber acquisition costs	246,918	280,677	709,308	746,324
Subscriber acquisition advertising	152,607	108,227	403,644	337,079
Total subscriber acquisition costs	452,280	450,757	1,283,101	1,275,970
General and administrative expenses	189,961	172,100	547,926	502,974
Depreciation and amortization (Note 6)	246,140	229,749	719,488	663,410
Total costs and expenses	3,164,913	2,954,766	9,268,222	8,620,672
Satellite and transmission expenses:
Operating income (loss)	420,459	494,094	1,425,925	1,609,368
Other Income (Expense):
Interest income	8,654	10,255	27,518	27,205
Interest expense, net of amounts capitalized	(207,149)	(220,596)	(631,405)	(663,823)
Other, net	(7,156)	75	(6,411)	268
Total other income (expense)	(205,651)	(210,266)	(610,298)	(636,350)
Income (loss) before income taxes	214,808	283,828	815,627	973,018
Income tax (provision) benefit, net	(62,109)	(97,151)	(287,523)	(346,228)
Net income (loss)	152,699	186,677	528,104	626,790
Less: Net income (loss) attributable to noncontrolling interest, net of tax	(2,342)	150	(7,575)	150
Net income (loss) attributable to DISH DBS	155,041	186,527	535,679	626,640
Comprehensive Income (Loss):
Net income (loss)	152,699	186,677	528,104	626,790
Other comprehensive income (loss):
Unrealized holding gains (losses) on available-for-sale securities	5,352	12,730	19,547	7,728
Deferred income tax (expense) benefit, net	66	(3,620)	(5,298)	(3,104)
Total other comprehensive income (loss), net of tax	5,418	9,110	14,249	4,624
Comprehensive income (loss)	158,117	195,787	542,353	631,414
Less: Comprehensive income (loss) attributable to noncontrolling interest, net of tax	(2,342)	150	(7,575)	150
Comprehensive income (loss) attributable to DISH DBS	$ 160,459	$ 195,637	$ 549,928	$ 631,264

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013
Cash Flows From Operating Activities:
Net income (loss)	$ 528,104	$ 626,790
Adjustments to reconcile net income (loss) to net cash flows from operating activities:
Depreciation and amortization	719,488	663,410
Non-cash, stock-based compensation	24,830	25,328
Deferred tax expense (benefit)	(87,889)	62,826
Other, net	71,441	(78,700)
Changes in current assets and current liabilities, net	14,778	40,513
Changes in current assets and current liabilities:
Net cash flows from operating activities	1,270,752	1,340,167
Cash Flows From Investing Activities:
(Purchases) Sales and maturities of marketable investment securities, net	388,035	(1,704,083)
Purchases of property and equipment	(629,869)	(688,007)
Change in restricted cash and marketable investment securities	2,096	38,881
Other, net	(6,426)	(10,521)
Net cash flows from investing activities	(246,164)	(2,363,730)
Cash Flows From Financing Activities:
Proceeds from issuance of long-term debt		2,300,000
Proceeds from issuance of restricted debt		2,600,000
Redemption of restricted debt		(2,600,000)
Funding of restricted debt escrow		(2,596,750)
Release of restricted debt escrow		2,596,771
Repurchases of long-term debt	(199,999)	(48,552)
Dividend to DISH Orbital Corporation	(650,000)
Repayment of long-term debt and capital lease obligations	(22,259)	(27,633)
Other	26,795	8,614
Net cash flows from financing activities	(845,463)	2,232,450
Net increase (decrease) in cash and cash equivalents	179,125	1,208,887
Cash and cash equivalents, beginning of period	4,294,475	3,424,387
Cash and cash equivalents, end of period	$ 4,473,600	$ 4,633,274

Marketable Investment Securities, Restricted Cash and Cash Equivalents, and Other Investment Securities

9 Months Ended

Sep. 30, 2014

Marketable Investment Securities, Restricted Cash and Cash Equivalents, and Other Investment Securities

Marketable Investment Securities, Restricted Cash and Cash Equivalents, and Other Investment Securities

4. Marketable Investment Securities, Restricted Cash and Cash Equivalents, and Other Investment Securities

Our marketable investment securities, restricted cash and cash equivalents, and other investment securities consisted of the following:

	As of
	September 30,		December 31,
	2014		2013
	(In thousands)
Marketable investment securities:
Current marketable investment securities - VRDNs	$	20,538	$	105,854
Current marketable investment securities - other	3,728,301		4,011,472
Total current marketable investment securities	3,748,839		4,117,326
Restricted marketable investment securities (1)	74,194		63,902
Total marketable investment securities	3,823,033		4,181,228

Restricted cash and cash equivalents (1)	6,490		18,878

Other investment securities:
Investment in EchoStar preferred tracking stock - cost method (2)	228,795		—
Investment in HSSC preferred tracking stock - cost method (2)	87,409		—
Other investment securities - cost method (2)	13,546		5,396
Total marketable investment securities and restricted cash and cash equivalents	$	4,159,273	$	4,205,502

(1) Restricted marketable investment securities and restricted cash and cash equivalents are included in “Restricted cash and marketable investment securities” on our Condensed Consolidated Balance Sheets.

(2) Other investment securities are included in “Other noncurrent assets, net” on our Condensed Consolidated Balance Sheets.

Marketable Investment Securities

Our marketable investment securities portfolio consists of various debt and equity instruments, all of which are classified as available-for-sale, except as specified below.

Current Marketable Investment Securities - VRDNs

Variable rate demand notes (“VRDNs”) are long-term floating rate municipal bonds with embedded put options that allow the bondholder to sell the security at par plus accrued interest. All of the put options are secured by a pledged liquidity source. Our VRDN portfolio is comprised mainly of investments in municipalities, which are backed by financial institutions or other highly rated obligors that serve as the pledged liquidity source. While they are classified as marketable investment securities, the put option allows VRDNs to be liquidated generally on a same day or on a five business day settlement basis.

Current Marketable Investment Securities — Other

Our current marketable investment securities portfolio includes investments in various debt and equity instruments including corporate and government bonds.

Restricted Cash and Marketable Investment Securities

As of September 30, 2014 and December 31, 2013, our restricted marketable investment securities, together with our restricted cash, included amounts required as collateral for our letters of credit.

Other Investment Securities

We have strategic investments in certain debt and equity securities that are included in “Other noncurrent assets, net” on our Condensed Consolidated Balance Sheets and accounted for using the cost, equity and/or available-for-sale methods of accounting.

Our ability to realize value from our strategic investments in securities that are not publicly traded depends on the success of the issuers’ businesses and their ability to obtain sufficient capital, on acceptable terms or at all, and to execute their business plans. Because private markets are not as liquid as public markets, there is also increased risk that we will not be able to sell these investments, or that when we desire to sell them we will not be able to obtain fair value for them.

Investment in Tracking Stock

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 transferred to EchoStar and Hughes Satellite Systems Corporation (“HSSC”), a subsidiary of EchoStar, five satellites (EchoStar I, EchoStar VII, EchoStar X, EchoStar XI and EchoStar XIV (collectively the “Transferred Satellites”), including related in-orbit incentive obligations and cash interest payments of approximately $59 million), and approximately $11 million in cash in exchange for an aggregate of 6,290,499 shares of a series of preferred tracking stock issued by EchoStar and an aggregate of 81.128 shares of a series of preferred tracking stock issued by HSSC (collectively, the “Tracking Stock”); and (ii) beginning on March 1, 2014, we lease back certain satellite capacity on the Transferred Satellites (collectively, the “Satellite and Tracking Stock Transaction”). The Tracking Stock generally tracks the residential retail satellite broadband business of Hughes Network Systems, LLC (“HNS”), a wholly-owned subsidiary of HSSC, including without limitation the operations, assets and liabilities attributed to the Hughes residential retail satellite broadband business (collectively, the “Hughes Retail Group”). The shares of the Tracking Stock issued to us represent an aggregate 80% economic interest in the Hughes Retail Group.

Since the Satellite and Tracking Stock Transaction is among entities under common control, we recorded the Tracking Stock at EchoStar and HSSC’s historical cost basis for these instruments of $229 million and $87 million, respectively. The difference between the historical cost basis of the Tracking Stock received and the net carrying value of the Transferred Satellites of $356 million (including debt obligations, net of deferred taxes), plus the $11 million in cash, resulted in a $51 million capital transaction recorded in “Additional paid-in capital” on our Condensed Consolidated Balance Sheet. Although our investment in the Tracking Stock represents an aggregate 80% economic interest in the Hughes Retail Group, we have no operational control or significant influence over the Hughes Retail Group business, and currently there is no public market for the Tracking Stock. As such, the Tracking Stock is accounted for under the cost method of accounting.

On February 20, 2014, DISH Operating L.L.C. (“DOLLC”) and DISH Network L.L.C. (“DNLLC”), each indirect wholly-owned subsidiaries of us, entered into an Investor Rights Agreement with EchoStar and HSSC with respect to the Tracking Stock (the “Investor Rights Agreement”). The Investor Rights Agreement provides, among other things, certain information and consultation rights for us; certain transfer restrictions on the Tracking Stock and certain rights and obligations to offer and sell under certain circumstances (including a prohibition on transfers of the Tracking Stock for one year, with continuing transfer restrictions (including a right of first offer in favor of EchoStar) thereafter, an obligation to sell the Tracking Stock to EchoStar in connection with a change of control of DISH Network and a right to require EchoStar to repurchase the Tracking Stock in connection with a change of control of EchoStar, in each case subject to certain terms and conditions); certain registration rights; certain obligations to provide conversion and exchange rights of the Tracking Stock under certain circumstances; and certain protective covenants afforded to holders of the Tracking Stock. The Investor Rights Agreement generally will terminate with respect to our interest should we no longer hold any shares of the HSSC-issued Tracking Stock and any registrable securities under the Investor Rights Agreement.

Unrealized Gains (Losses) on Marketable Investment Securities

As of September 30, 2014 and December 31, 2013, we had accumulated net unrealized gains of $35 million and $15 million, respectively. These amounts, net of related tax effect, were $25 million and $11 million, respectively. All of these amounts are included in “Accumulated other comprehensive income (loss)” within “Total stockholder’s equity (deficit).” The components of our available-for-sale investments are summarized in the table below.

	As of September 30, 2014									As of December 31, 2013
	Marketable									Marketable
	Investment		Unrealized							Investment		Unrealized
	Securities		Gains		Losses			Net		Securities		Gains		Losses			Net
	(In thousands)
Debt securities:
VRDNs	$	20,538	$	—	$	—		$	—	$	105,854	$	—	$	—		$	—
Other (including restricted)	3,759,837		6,767		(1,263		)	5,504		4,048,851		5,447		(3,355		)	2,092
Equity securities:
Other	42,658		29,421		—			29,421		26,523		13,286		—			13,286
Total	$	3,823,033	$	36,188	$	(1,263	)	$	34,925	$	4,181,228	$	18,733	$	(3,355	)	$	15,378

As of September 30, 2014, restricted and non-restricted marketable investment securities included debt securities of $2.487 billion with contractual maturities within one year, $1.270 billion with contractual maturities extending longer than one year through and including five years and $23 million with contractual maturities longer than ten years. Actual maturities may differ from contractual maturities as a result of our ability to sell these securities prior to maturity.

Marketable Investment Securities in a Loss Position

The following table reflects the length of time that the individual securities, accounted for as available-for-sale, have been in an unrealized loss position, aggregated by investment category. As of September 30, 2014, the unrealized losses on our investments in debt securities primarily represented investments in corporate bonds. We have the ability to hold and do not intend to sell our investments in these debt securities before they recover or mature, and it is more likely than not that we will hold these investments until that time. In addition, we are not aware of any specific factors indicating that the underlying issuers of these debt securities would not be able to pay interest as it becomes due or repay the principal at maturity. Therefore, we believe that these changes in the estimated fair values of these marketable investment securities are related to temporary market fluctuations.

	As of
	September 30, 2014					December 31, 2013
	Fair		Unrealized			Fair		Unrealized
	Value		Loss			Value		Loss
	(In thousands)
Debt Securities:
Less than 12 months	$	1,858,459	$	(1,243	)	$	2,002,239	$	(2,820	)
12 months or more	168,734		(20		)	38,043		(535		)
Total	$	2,027,193	$	(1,263	)	$	2,040,282	$	(3,355	)

Fair Value Measurements

Our investments measured at fair value on a recurring basis were as follows:

	As of
	September 30, 2014								December 31, 2013
	Total		Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3
	(In thousands)
Cash Equivalents (including restricted)	$	4,183,698	$	67,535	$	4,116,163	$	—	$	3,743,328	$	275,277	$	3,468,051	$	—

Debt securities:
VRDNs	$	20,538	$	—	$	20,538	$	—	$	105,854	$	—	$	105,854	$	—
Other (including restricted)	3,759,837		—		3,759,837		—		4,048,851		—		4,048,851		—

Equity securities	42,658		42,658		—		—		26,523		26,523		—		—

Total	$	3,823,033	$	42,658	$	3,780,375	$	—	$	4,181,228	$	26,523	$	4,154,705	$	—

During the nine months ended September 30, 2014, we had no transfers in or out of Level 1 and Level 2 fair value measurements.

Property and Equipment and FCC Authorizations

9 Months Ended

Sep. 30, 2014

Property and Equipment and FCC Authorizations

Property and Equipment and FCC Authorizations

6. Property and Equipment and FCC Authorizations

Property and Equipment

Property and equipment consisted of the following:

	Depreciable	As of
	Life	September 30,			December 31,
	(In Years)	2014			2013
		(In thousands)
Equipment leased to customers	2-5	$	3,526,090		$	3,496,994
EchoStar I (1)	12	—			201,607
EchoStar VII (1)	15	—			177,000
EchoStar X (1)	15	—			177,192
EchoStar XI (1)	15	—			200,198
EchoStar XIV (1)	15	—			316,541
EchoStar XV	15	277,658			277,658
Satellites acquired under capital lease agreements	10-15	499,819			499,819
Furniture, fixtures, equipment and other	1-10	661,321			600,439
Buildings and improvements	1-40	83,258			80,439
Land	—	5,504			5,504
Construction in progress	—	19,006			39,043
Total property and equipment		5,072,656			6,072,434
Accumulated depreciation (1)		(2,591,343		)	(3,093,111		)
Property and equipment, net		$	2,481,313		$	2,979,323

(1) Property and equipment and accumulated depreciation decreased $1.073 billion and $633 million, respectively, as a result of the Satellite and Tracking Stock Transaction. See Note 4 and Note 10 for further discussion.

Depreciation and amortization expense consisted of the following:

	For the Three Months				For the Nine Months
	Ended September 30,				Ended September 30,
	2014		2013		2014		2013
	(In thousands)
Equipment leased to customers	$	208,208	$	188,524	$	607,584	$	538,457
Satellites	15,261		27,171		53,723		81,512
Buildings, furniture, fixtures, equipment and other	22,671		14,054		58,181		43,441
Total depreciation and amortization	$	246,140	$	229,749	$	719,488	$	663,410

Cost of sales and operating expense categories included in our accompanying Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) do not include depreciation expense related to satellites or equipment leased to customers.

Pay-TV Satellites. We currently utilize 14 owned and leased satellites in geostationary orbit approximately 22,300 miles above the equator, one of which we own and depreciate over the useful life of the satellite. We currently utilize capacity on 11 satellites that we lease from EchoStar, which are accounted for as operating leases. We also lease two satellites from third parties, which are accounted for as capital leases and are depreciated over the shorter of the economic life of the satellite or the term of the satellite agreement.

As of September 30, 2014, our pay-TV satellite fleet consisted of the following:

		Degree	Estimated
	Launch	Orbital	Useful Life
Satellites	Date	Location	(Years)
Owned:
EchoStar XV (1)	July 2010	45	15

Leased from EchoStar (1):
EchoStar I (2)(3)	December 1995	77	NA
EchoStar VII (2)(3)	February 2002	119	NA
EchoStar VIII	August 2002	77	NA
EchoStar IX	August 2003	121	NA
EchoStar X (2)(3)	February 2006	110	NA
EchoStar XI (2)(3)	July 2008	110	NA
EchoStar XII (2)	July 2003	61.5	NA
EchoStar XIV (2)(3)	March 2010	119	NA
EchoStar XVI	November 2012	61.5	NA
Nimiq 5	September 2009	72.7	NA
QuetzSat-1	September 2011	77	NA

Leased from Other Third Party:
Anik F3	April 2007	118.7	NA
Ciel II	December 2008	129	NA

Under Construction:
EchoStar XVIII	2015	110	15

(1) See Note 10 for further discussion of our Related Party Transactions with EchoStar.

(2) We generally have the option to renew each lease on a year-to-year basis through the end of the respective satellite’s useful life.

(3) On February 20, 2014, we entered into the Satellite and Tracking Stock Transaction with EchoStar pursuant to which, among other things, we transferred these satellites to EchoStar and lease back certain satellite capacity on these satellites. See Note 4 for further discussion.

FCC Authorizations

MVDDS Licenses. We have multichannel video distribution and data service (“MVDDS”) licenses in 82 out of 214 geographical license areas, including Los Angeles, New York City, Chicago and several other major metropolitan areas. By August 2014, we were required to meet certain FCC build-out requirements related to our MVDDS licenses, and we are subject to certain FCC service rules applicable to these licenses. We have filed an application with the FCC seeking an extension of the build-out requirements related to our MVDDS licenses and requested an additional four-year license term. That application remains pending, and we cannot predict the timing or outcome of our application. Part or all of our MVDDS licenses may be terminated if our application for an extension is not granted. If the FCC decides to terminate part or all of these licenses, we may be required to write-off up to the $24 million carrying value.

Commitments and Contingencies	9 Months Ended
Commitments and Contingencies	Sep. 30, 2014
Commitments and Contingencies
Commitments and Contingencies	8. Commitments and Contingencies Commitments Wireless Spectrum DISH Network has made substantial investments to acquire certain wireless spectrum licenses and related assets in recent years. 700 MHz Licenses. In 2008, DISH Network paid $712 million to acquire certain 700 MHz E Block (“700 MHz”) wireless spectrum licenses, which were granted to DISH Network by the FCC in February 2009. At the time they were granted, these licenses were subject to certain interim and final build-out requirements. By June 2013, DISH Network was required to provide signal coverage and offer service to at least 35% of the geographic area in each area covered by each individual license (the “700 MHz Interim Build-Out Requirement”). By June 2019, DISH Network was required to provide signal coverage and offer service to at least 70% of the geographic area in each area covered by each individual license (the “700 MHz Final Build-Out Requirement”). As discussed below, these requirements have since been modified by the FCC. On September 9, 2013, DISH Network filed a letter with the FCC in support of a voluntary industry solution to resolve certain interoperability issues affecting the lower 700 MHz spectrum band (the “Interoperability Solution”). On October 29, 2013, the FCC issued an order approving the Interoperability Solution (the “Interoperability Solution Order”), which requires DISH Network to reduce power emissions on its 700 MHz licenses. As part of the Interoperability Solution Order, the FCC, among other things, approved DISH Network’s request to modify the 700 MHz Interim Build-Out Requirement so that by March 2017 DISH Network must provide signal coverage and offer service to at least 40% of its total E Block population (the “Modified 700 MHz Interim Build-Out Requirement”). The FCC also approved DISH Network’s request to modify the 700 MHz Final Build-Out Requirement so that by March 2021 DISH Network must provide signal coverage and offer service to at least 70% of the population in each of its E Block license areas (the “Modified 700 MHz Final Build-Out Requirement”). These requirements replaced the previous build-out requirements associated with DISH Network’s 700 MHz licenses. While the modifications to DISH Network’s 700 MHz licenses provide DISH Network additional time to complete the build-out requirements, the reduction in power emissions could have an adverse impact on DISH Network’s ability to fully utilize its 700 MHz licenses. If DISH Network fails to meet the Modified 700 MHz Interim Build-Out Requirement, the Modified 700 MHz Final Build-Out Requirement may be accelerated by one year, from March 2021 to March 2020, and DISH Network could face the reduction of license area(s). If DISH Network fails to meet the Modified 700 MHz Final Build-Out Requirement, DISH Network’s authorization may terminate for the geographic portion of each license in which DISH Network is not providing service. AWS-4 Licenses. On March 2, 2012, the FCC approved the transfer of 40 MHz of wireless spectrum licenses held by DBSD North America, Inc. (“DBSD North America”) and TerreStar Networks, Inc. (“TerreStar”) to DISH Network. On March 9, 2012, DISH Network completed the acquisition of 100% of the equity of reorganized DBSD North America (the “DBSD Transaction”) and substantially all of the assets of TerreStar (the “TerreStar Transaction”), pursuant to which DISH Network acquired, among other things, certain satellite assets and wireless spectrum licenses held by DBSD North America and TerreStar. The total consideration to acquire the DBSD North America and TerreStar assets was approximately $2.860 billion. DISH Network’s consolidated FCC applications for approval of the license transfers from DBSD North America and TerreStar were accompanied by requests for waiver of the FCC’s Mobile Satellite Service (“MSS”) “integrated service” and spare satellite requirements and various technical provisions. On March 21, 2012, the FCC released a Notice of Proposed Rule Making proposing the elimination of the integrated service, spare satellite and various technical requirements associated with these licenses. On December 11, 2012, the FCC approved rules that eliminated these requirements and gave notice of its proposed modification of DISH Network’s authorizations to, among other things, allow DISH Network to offer single-mode terrestrial terminals to customers who do not desire satellite functionality. On February 15, 2013, the FCC issued an order, which became effective on March 7, 2013, modifying DISH Network’s licenses to expand its terrestrial operating authority with AWS-4 authority (“AWS-4”). That order imposed certain limitations on the use of a portion of this spectrum, including interference protections for other spectrum users and power and emission limits that DISH Network presently believes could render 5 MHz of its uplink spectrum (2000-2005 MHz) effectively unusable for terrestrial services and limit its ability to fully utilize the remaining 15 MHz of its uplink spectrum (2005-2020 MHz) for terrestrial services. These limitations could, among other things, impact the ongoing development of technical standards associated with DISH Network’s wireless business, and may have a material adverse effect on DISH Network’s ability to commercialize its AWS-4 licenses. That order also mandated certain interim and final build-out requirements for the licenses. By March 2017, DISH Network must provide terrestrial signal coverage and offer terrestrial service to at least 40% of the aggregate population represented by all of the areas covered by the licenses (the “AWS-4 Interim Build-Out Requirement”). By March 2020, DISH Network was required to provide terrestrial signal coverage and offer terrestrial service to at least 70% of the population in each area covered by an individual license (the “AWS-4 Final Build-Out Requirement”). On December 20, 2013, the FCC issued a further order that, among other things, extended the AWS-4 Final Build-Out Requirement by one year to March 2021 (the “Modified AWS-4 Final Build-Out Requirement”). If DISH Network fails to meet the AWS-4 Interim Build-Out Requirement, the Modified AWS-4 Final Build-Out Requirement may be accelerated by one year, from March 2021 to March 2020. If DISH Network fails to meet the Modified AWS-4 Final Build-Out Requirement, DISH Network’s terrestrial authorization for each license area in which it fails to meet the requirement may terminate. The FCC’s December 20, 2013 order also conditionally waived certain FCC rules for DISH Network’s AWS-4 licenses to allow DISH Network to repurpose all 20 MHz of its uplink spectrum (2000-2020 MHz) for downlink (the “AWS-4 Downlink Waiver”). If DISH Network fails to notify the FCC that it intends to use its uplink spectrum for downlink by June 20, 2016, the AWS-4 Downlink Waiver will terminate, and the Modified AWS-4 Final Build-Out Requirement will revert back to the AWS-4 Final Build-Out Requirement. H Block Licenses. The auction of wireless spectrum known as the H Block commenced on January 22, 2014 and concluded on February 27, 2014. DISH Network was the winning bidder for all 176 H Block wireless spectrum licenses (“H Block”) in the H Block auction with an aggregate bid of $1.564 billion. On December 17, 2013, DISH Network paid approximately $328 million to the FCC as a deposit for the H Block auction. DISH Network paid the remaining balance of its winning bid of approximately $1.236 billion for the H Block licenses on March 28, 2014. On April 29, 2014, the FCC issued an order granting DISH Network’s application to acquire these H Block licenses. As a result, during May 2014, DISH Network also paid approximately $13 million to UTAM, Inc. for clearance costs associated with the lower H Block spectrum and approximately $95 million to Sprint for clearance costs associated with the upper H Block spectrum in connection with the issuance of the H Block licenses. The H Block licenses are subject to certain interim and final build-out requirements. By April 2018, DISH Network must provide reliable signal coverage and offer service to at least 40% of the population in each area covered by an individual H Block license (the “H Block Interim Build-Out Requirement”). By April 2024, DISH Network must provide reliable signal coverage and offer service to at least 75% of the population in each area covered by an individual H Block license (the “H Block Final Build-Out Requirement”). If DISH Network fails to meet the H Block Interim Build-Out Requirement, the H Block license term and the H Block Final Build-Out Requirement may be accelerated by two years (from April 2024 to April 2022) for each H Block license area in which it fails to meet the requirement. If DISH Network fails to meet the H Block Final Build-Out Requirement, its authorization for each H Block license area in which it fails to meet the requirement may terminate. The FCC has adopted rules for the H Block spectrum band that is adjacent to DISH Network’s AWS-4 licenses. Depending on the outcome of the standard-setting process for the H Block and DISH Network’s ultimate decision regarding the AWS-4 Downlink Waiver, the rules that the FCC adopted for the H Block could further impact 15 MHz of DISH Network’s AWS-4 uplink spectrum (2005-2020 MHz), which may have a material adverse effect on DISH Network’s ability to commercialize the AWS-4 licenses. AWS-3 Auction. DISH Network has filed an application with the FCC to participate as a potential bidder in the upcoming AWS-3 wireless spectrum auction. On October 30, 2014, the FCC announced that DISH Network and 69 other applicants were qualified to participate in the AWS-3 auction. The auction is scheduled to commence on November 13, 2014. The FCC has set an aggregate reserve price of: (i) approximately $580 million for licenses in the 1695-1710 MHz band, and (ii) approximately $10.066 billion for paired licenses in the 1755-1780/2155-2180 MHz bands, to conclude the auction of spectrum in each respective band. The FCC determined that bidding in this auction will be “anonymous,” which means that prior to and during the course of the auction, the FCC will not make public any information about a specific applicant’s upfront deposit or its bids. In addition, FCC rules restrict information that bidders may disclose about their participation in the auction. Commercialization of Wireless Spectrum Licenses and Related Assets. DISH Network may also determine that additional wireless spectrum licenses may be required to commercialize its wireless business and to compete with other wireless service providers. DISH Network will need to make significant additional investments or partner with others to, among other things, commercialize, build-out, and integrate its licenses and related assets, and any additional acquired licenses and related assets; and comply with regulations applicable to its licenses. Depending on the nature and scope of such commercialization, build-out, and integration efforts, and regulatory compliance, any such investment or partnership could vary significantly. In connection with the development of DISH Network’s wireless business, including without limitation the efforts described above, we have made cash distributions to DISH Network to partially finance these efforts to date and may make additional cash distributions to finance in whole or in part DISH Network’s future efforts. On March 28, 2014, we paid a dividend of $650 million to DOC in connection with, among other things, the funding of certain payments by DISH Network related to its winning bid for all 176 wireless spectrum licenses in the H Block auction. There can be no assurance that DISH Network will be able to develop and implement a business model that will realize a return on its wireless spectrum licenses or that DISH Network will be able to profitably deploy the assets represented by its wireless spectrum licenses. Guarantees On January 1, 2008, DISH Network completed the distribution of its technology and set-top box business and certain infrastructure assets (the “Spin-off”) into a separate publicly-traded company, EchoStar. In connection with the Spin-off, we distributed certain satellite lease agreements to EchoStar and remained the guarantor under those capital leases for payments totaling approximately $10 million over approximately the next five months. During the third quarter 2009, EchoStar entered into a new satellite transponder service agreement for Nimiq 5 through 2024. We sublease this capacity from EchoStar and DISH Network guarantees a certain portion of EchoStar’s obligation under its satellite transponder service agreement through 2019. As of September 30, 2014, the remaining obligation of DISH Network’s guarantee was $327 million. As of September 30, 2014, we have not recorded a liability on the balance sheet for any of these guarantees. Contingencies *Separation Agreement* In connection with the Spin-off, DISH Network entered into a separation agreement with EchoStar that provides, among other things, for the division of certain liabilities, including liabilities resulting from litigation. Under the terms of the separation agreement, EchoStar has assumed certain liabilities that relate to its business including certain designated liabilities for acts or omissions that occurred prior to the Spin-off. Certain specific provisions govern intellectual property related claims under which, generally, EchoStar will only be liable for its acts or omissions following the Spin-off and DISH Network will indemnify EchoStar for any liabilities or damages resulting from intellectual property claims relating to the period prior to the Spin-off as well as our acts or omissions following the Spin-off. *Litigation* We are involved in a number of legal proceedings (including those described below) concerning matters arising in connection with the conduct of our business activities. Many of these proceedings are at preliminary stages, and many of these proceedings seek an indeterminate amount of damages. We regularly evaluate the status of the legal proceedings in which we are involved to assess whether a loss is probable or there is a reasonable possibility that a loss or an additional loss may have been incurred and to determine if accruals are appropriate. If accruals are not appropriate, we further evaluate each legal proceeding to assess whether an estimate of the possible loss or range of possible loss can be made. For certain cases described on the following pages, management is unable to provide a meaningful estimate of the possible loss or range of possible loss because, among other reasons, (i) the proceedings are in various stages; (ii) damages have not been sought; (iii) damages are unsupported and/or exaggerated; (iv) there is uncertainty as to the outcome of pending appeals or motions; (v) there are significant factual issues to be resolved; and/or (vi) there are novel legal issues or unsettled legal theories to be presented or a large number of parties (as with many patent-related cases). For these cases, however, management does not believe, based on currently available information, that the outcomes of these proceedings will have a material adverse effect on our financial condition, though the outcomes could be material to our operating results for any particular period, depending, in part, upon the operating results for such period. California Institute of Technology On October 1, 2013, the California Institute of Technology (“Caltech”) filed complaints against DISH Network and its wholly-owned subsidiaries DISH Network L.L.C. and dishNET Satellite Broadband L.L.C., as well as Hughes Communications, Inc. and Hughes Network Systems, LLC, which are wholly-owned subsidiaries of EchoStar, in the United States District Court for the Central District of California. The complaint alleges infringement of United States Patent Nos. 7,116,710 (the “710 patent”); 7,421,032 (the “032 patent”); 7,916,781 (the “781 patent”) and 8,284,833 (the “833 patent”), each of which is entitled “Serial Concatenation of Interleaved Convolutional Codes forming Turbo-Like Codes.” Caltech alleges that encoding data as specified by the DVB-S2 standard infringes each of the asserted patents. In the operative Amended Complaint, served on March 6, 2014, Caltech claims that our Hopper set-top box, as well as the Hughes defendants’ satellite broadband products and services, infringe the asserted patents by implementing the DVB-S2 standard. We intend to vigorously defend this case. In the event that a court ultimately determines that we infringe the asserted patents, we may be subject to substantial damages, which may include treble damages, and/or an injunction that could require us to materially modify certain features that we currently offer to consumers. We cannot predict with any degree of certainty the outcome of the suit or determine the extent of any potential liability or damages. ClearPlay, Inc. On March 13, 2014, ClearPlay, Inc. (“ClearPlay”) filed a complaint against DISH Network, our wholly-owned subsidiary DISH Network L.L.C., EchoStar, and its wholly-owned subsidiary EchoStar Technologies L.L.C. in the United States District Court for the District of Utah. The complaint alleges infringement of United States Patent Nos. 6,898,799, entitled “Multimedia Content Navigation and Playback” (the “799 patent”); 7,526,784, entitled “Delivery of Navigation Data for Playback of Audio and Video Content” (the “784 patent”); 7,543,318, entitled “Delivery of Navigation Data for Playback of Audio and Video Content” (the “318 patent”); 7,577,970, entitled “Multimedia Content Navigation and Playback” (the “970 patent”); and 8,117,282, entitled “Media Player Configured to Receive Playback Filters From Alternative Storage Mediums” (the “282 patent”). ClearPlay alleges that the AutoHop™ feature in our Hopper set-top box infringes the asserted patents. We intend to vigorously defend this case. In the event that a court ultimately determines that we infringe the asserted patents, we may be subject to substantial damages, which may include treble damages, and/or an injunction that could require us to materially modify certain features that we currently offer to consumers. We cannot predict with any degree of certainty the outcome of the suit or determine the extent of any potential liability or damages. CRFD Research, Inc. (a subsidiary of Marathon Patent Group, Inc.) On January 17, 2014, CRFD Research, Inc. (“CRFD”) filed a complaint against us, our wholly-owned subsidiary DISH Network L.L.C., DISH Network, EchoStar, and its wholly-owned subsidiary EchoStar Technologies L.L.C., in the United States District Court for the District of Delaware, alleging infringement of United States Patent No. 7,191,233 (the “233 patent”). The 233 patent is entitled “System for Automated, Mid-Session, User-Directed, Device-to-Device Session Transfer System,” and relates to transferring an ongoing software session from one device to another. CRFD alleges that our Hopper and Joey set-top boxes infringe the 233 patent. On the same day, CRFD filed similar complaints against AT&T Inc.; Comcast Corp.; DirecTV; Time Warner Cable Inc.; Cox Communications, Inc.; Akamai Technologies, Inc.; Cablevision Systems Corp. and Limelight Networks, Inc. CRFD is an entity that seeks to license an acquired patent portfolio without itself practicing any of the claims recited therein. We intend to vigorously defend this case. In the event that a court ultimately determines that we infringe the asserted patent, we may be subject to substantial damages, which may include treble damages, and/or an injunction that could require us to materially modify certain features that we currently offer to consumers. We cannot predict with any degree of certainty the outcome of the suit or determine the extent of any potential liability or damages. Custom Media Technologies LLC On August 15, 2013, Custom Media Technologies LLC (“Custom Media”) filed complaints against DISH Network; AT&T Inc.; Charter Communications, Inc.; Comcast Corp.; Cox Communications, Inc.; DirecTV; Time Warner Cable Inc. and Verizon Communications, Inc., in the United States District Court for the District of Delaware, alleging infringement of United States Patent No. 6,269,275 (the “275 patent”). The 275 patent, which is entitled “Method and System for Customizing and Distributing Presentations for User Sites,” relates to the provision of customized presentations to viewers over a network, such as “a cable television network, an Internet or other computer network, a broadcast television network, and/or a satellite system.” Custom Media alleges that our DVR devices and DVR functionality infringe the 275 patent. Custom Media is an entity that seeks to license an acquired patent portfolio without itself practicing any of the claims recited therein. Pursuant to a stipulation between the parties, on November 6, 2013, the Court entered an order substituting DISH Network L.L.C., our wholly-owned subsidiary, as the defendant in DISH Network’s place. A trial date is set for September 19, 2016. We intend to vigorously defend this case. In the event that a court ultimately determines that we infringe the asserted patent, we may be subject to substantial damages, which may include treble damages, and/or an injunction that could require us to materially modify certain features that we currently offer to consumers. We cannot predict with any degree of certainty the outcome of the suit or determine the extent of any potential liability or damages. Do Not Call Litigation On March 25, 2009, our wholly-owned subsidiary DISH Network L.L.C. was sued in a civil action by the United States Attorney General and several states in the United States District Court for the Central District of Illinois, alleging violations of the Telephone Consumer Protection Act and Telephone Sales Rules, as well as analogous state statutes and state consumer protection laws. The plaintiffs allege that we, directly and through certain independent third-party retailers and their affiliates, committed certain telemarketing violations. On December 23, 2013, the plaintiffs filed a motion for summary judgment, which indicated for the first time that the state plaintiffs are seeking civil penalties and damages of approximately $270 million and that the federal plaintiff is seeking an unspecified amount of civil penalties (which could substantially exceed the civil penalties and damages being sought by the state plaintiffs). The plaintiffs are also seeking injunctive relief that if granted would, among other things, enjoin DISH Network L.L.C., whether acting directly or indirectly through authorized telemarketers or independent third-party retailers, from placing any outbound telemarketing calls to market or promote its goods or services for five years, and enjoin DISH Network L.L.C. from accepting activations or sales from certain existing independent third-party retailers and from certain new independent third-party retailers, except under certain circumstances. We have also filed a motion for summary judgment, seeking dismissal of all claims, and the Court heard oral arguments on the parties’ summary judgment motions on October 17, 2014. We intend to vigorously defend this case. We cannot predict with any degree of certainty the outcome of the suit or determine the extent of any potential liability or damages. Dragon Intellectual Property, LLC On December 20, 2013, Dragon Intellectual Property, LLC (“Dragon IP”) filed complaints against our wholly-owned subsidiary DISH Network L.L.C., as well as Apple Inc.; AT&T, Inc.; Charter Communications, Inc.; Comcast Corp.; Cox Communications, Inc.; DirecTV; Sirius XM Radio Inc.; Time Warner Cable Inc. and Verizon Communications, Inc., in the United States District Court for the District of Delaware, alleging infringement of United States Patent No. 5,930,444 (the “444 patent”), which is entitled “Simultaneous Recording and Playback Apparatus.” Dragon IP alleges that various of our DVR receivers infringe the 444 patent. Dragon IP is an entity that seeks to license an acquired patent portfolio without itself practicing any of the claims recited therein. We intend to vigorously defend this case. In the event that a court ultimately determines that we infringe the asserted patent, we may be subject to substantial damages, which may include treble damages, and/or an injunction that could require us to materially modify certain features that we currently offer to consumers. We cannot predict with any degree of certainty the outcome of the suit or determine the extent of any potential liability or damages. ESPN During 2008, our wholly-owned subsidiary DISH Network L.L.C. filed a lawsuit against ESPN, Inc.; ESPN Classic, Inc.; ABC Cable Networks Group; Soapnet L.L.C. and International Family Entertainment (collectively, “ESPN”) for breach of contract in New York State Supreme Court. Our complaint alleged that ESPN failed to provide us with certain HD feeds of the Disney Channel, ESPN News, Toon and ABC Family. In October 2011, the jury returned a verdict in favor of the defendants, which the New York State Supreme Court, Appellate Division, First Department (the “First Department”) affirmed on April 2, 2013. We sought leave to further appeal, which the New York Court of Appeals denied on August 27, 2013 on jurisdictional grounds. On September 19, 2013, we appealed the trial court’s final judgment to the First Department. On March 6, 2014, pursuant to a settlement and release agreement between the parties, we dismissed our appeal. ESPN had asserted a counterclaim alleging that we owed approximately $35 million under the applicable affiliation agreements. On April 15, 2009, the New York State Supreme Court granted, in part, ESPN’s motion for summary judgment on the counterclaim, finding that we were liable for some of the amount alleged to be owing but that the actual amount owing was disputed. On December 29, 2010, the First Department affirmed the partial grant of ESPN’s motion for summary judgment on the counterclaim. After the partial grant of ESPN’s motion for summary judgment, ESPN sought an additional $30 million under the applicable affiliation agreements. On March 15, 2010, the New York State Supreme Court ruled that we owed the full amount of approximately $66 million under the applicable affiliation agreements. As of December 31, 2010, we had $42 million recorded as a “Litigation accrual” on our Consolidated Balance Sheets. On June 21, 2011, the First Department affirmed the New York State Supreme Court’s ruling that we owed approximately $66 million under the applicable affiliation agreements and, on October 18, 2011, denied our motion for leave to appeal that decision to New York’s highest court, the New York Court of Appeals. We sought leave to appeal directly to the New York Court of Appeals and, on January 10, 2012, the New York Court of Appeals dismissed our motion for leave on the ground that the ruling upon which we appealed did not fully resolve all claims in the action. As a result of the First Department’s June 2011 ruling, we recorded $24 million of “Litigation Expense” on our Consolidated Statements of Operations and Comprehensive Income (Loss) during 2011. On October 11, 2012, the New York State Supreme Court awarded ESPN $5 million in attorneys’ fees as the prevailing party on both our claim and ESPN’s counterclaim. As a result, we recorded $5 million of “General and administrative expenses” and increased our “Litigation accrual” to a total of $71 million related to this case as of December 31, 2012. During the first quarter 2013, we paid $71 million to ESPN related to the counterclaim and attorneys’ fees and $12 million for accrued interest. As a result of the parties’ settlement and release, no further appeals are possible, and this matter is now concluded. Garnet Digital, LLC On September 9, 2013, Garnet Digital, LLC (“Garnet Digital”) filed a complaint against DISH Network and our wholly-owned subsidiary DISH Network L.L.C., in the United States District Court for the Eastern District of Texas, alleging infringement of United States Patent No. 5,379,421 (the “421 patent”), which is entitled “Interactive Terminal for the Access of Remote Database Information.” The 421 patent relates to methods for accessing information from a remote computerized database and related devices. On the same day, Garnet Digital filed similar complaints in the same court against 15 other defendants, including AT&T Inc.; Comcast Corp.; DirecTV; TiVo, Inc. and Verizon Communications, Inc. Garnet Digital is an entity that seeks to license an acquired patent portfolio without itself practicing any of the claims recited therein. On July 30, 2014, the Court dismissed the claims against us and DISH Network with prejudice. The Hopper Litigation On May 24, 2012, our wholly-owned subsidiary, DISH Network L.L.C., filed a lawsuit in the United States District Court for the Southern District of New York against American Broadcasting Companies, Inc.; CBS Corporation; Fox Entertainment Group, Inc.; Fox Television Holdings, Inc.; Fox Cable Network Services, L.L.C. and NBCUniversal, LLC. In the lawsuit, we are seeking a declaratory judgment that we are not infringing any defendant’s copyright, or breaching any defendant’s retransmission consent agreement, by virtue of the PrimeTime Anytime™ and AutoHop features of our Hopper set-top box. A consumer can use the PrimeTime Anytime feature, at his or her option, to record certain primetime programs airing on ABC, CBS, Fox, and/or NBC up to every night, and to store those recordings for up to eight days. A consumer can use the AutoHop feature, at his or her option, to watch certain recordings the subscriber made with our PrimeTime Anytime feature, commercial-free, if played back at a certain point after the show’s original airing. Later on May 24, 2012, (i) Fox Broadcasting Company; Twentieth Century Fox Film Corp. and Fox Television Holdings, Inc. filed a lawsuit against us and DISH Network L.L.C. in the United States District Court for the Central District of California, alleging that the PrimeTime Anytime feature, the AutoHop feature, as well as Slingbox placeshifting functionality infringe their copyrights and breach their retransmission consent agreements, (ii) NBC Studios LLC; Universal Network Television, LLC; Open 4 Business Productions LLC and NBCUniversal, LLC filed a lawsuit against us and DISH Network L.L.C. in the United States District Court for the Central District of California, alleging that the PrimeTime Anytime feature and the AutoHop feature infringe their copyrights, and (iii) CBS Broadcasting Inc.; CBS Studios Inc. and Survivor Productions LLC filed a lawsuit against us and DISH Network L.L.C. in the United States District Court for the Central District of California, alleging that the PrimeTime Anytime feature and the AutoHop feature infringe their copyrights. As a result of certain parties’ competing venue-related motions brought in both the New York and California actions, and certain networks’ filing various counterclaims and amended complaints, the claims have proceeded in the following venues: (1) the copyright and contract claims regarding the ABC and CBS parties in New York; and (2) the copyright and contract claims regarding the Fox and NBC parties in California. California Actions. The NBC plaintiffs and Fox plaintiffs filed amended complaints in their respective California actions adding copyright claims against EchoStar and EchoStar Technologies L.L.C., a wholly-owned subsidiary of EchoStar. In addition, the Fox plaintiffs’ amended complaint added claims challenging the Hopper Transfers™ feature of our second-generation Hopper set-top box. On November 7, 2012, the California court denied the Fox plaintiffs’ motion for a preliminary injunction to enjoin the Hopper set-top box’s PrimeTime Anytime and AutoHop features, and the Fox plaintiffs appealed. On March 27, 2013, at the request of the parties, the Central District of California granted a stay of all proceedings in the action brought by the NBC plaintiffs, pending resolution of the appeal by the Fox plaintiffs. On July 24, 2013, the United States Court of Appeals for the Ninth Circuit affirmed the denial of the Fox plaintiffs’ motion for a preliminary injunction as to the PrimeTime Anytime and AutoHop features. On August 7, 2013, the Fox plaintiffs filed a petition for rehearing and rehearing en banc, which was denied on January 24, 2014. The United States Supreme Court granted the Fox plaintiffs an extension until May 23, 2014 to file a petition for writ of certiorari, but they did not file. As a result, the stay of the NBC plaintiffs’ action expired. On August 6, 2014, at the request of the parties, the Central District of California granted a further stay of all proceedings in the action brought by the NBC plaintiffs, pending a final judgment on all claims in the Fox plaintiffs’ action. No trial date is currently set on the NBC claims. In addition, on February 21, 2013, the Fox plaintiffs filed a second motion for preliminary injunction against: (i) us seeking to enjoin the Hopper Transfers feature in our second-generation Hopper set-top box, alleging breach of their retransmission consent agreement; and (ii) us and EchoStar Technologies L.L.C. seeking to enjoin the Slingbox placeshifting functionality in our second-generation Hopper set-top box, alleging copyright infringement and breach of their retransmission consent agreement. On September 23, 2013, the California court denied the Fox plaintiffs’ motion. The Fox plaintiffs appealed, and on July 14, 2014, the United States Court of Appeals for the Ninth Circuit affirmed the denial of the Fox plaintiffs’ motion for a preliminary injunction as to the Hopper Transfers feature and the Slingbox placeshifting functionality in our second-generation Hopper set-top box. On October 17, 2014, the California court heard oral argument on the Fox plaintiffs’ and our respective motions for summary judgment. The Fox claims are set for trial on February 24, 2015. New York Actions. Both the ABC and CBS parties filed counterclaims in the New York action adding copyright claims against EchoStar Technologies L.L.C., and the CBS parties have filed a counterclaim alleging that we fraudulently concealed the AutoHop feature when negotiating renewal of our CBS retransmission consent agreement. On November 23, 2012, the ABC plaintiffs filed a motion for a preliminary injunction to enjoin the Hopper set-top box’s PrimeTime Anytime and AutoHop features. On September 18, 2013, the New York court denied that motion. The ABC plaintiffs appealed, and oral argument on the appeal was heard on February 20, 2014 before the United States Court of Appeals for the Second Circuit. Pursuant to a settlement between us and the ABC parties, on March 4, 2014, the ABC parties withdrew their appeal to the United States Court of Appeals for the Second Circuit, and, on March 6, 2014, we and the ABC parties dismissed without prejudice all of our respective claims pending in the United States District Court for the Southern District of New York. The CBS claims in the New York action are set to be trial-ready on May 29, 2015. We intend to vigorously prosecute and defend our position in these cases. In the event that a court ultimately determines that we infringe the asserted copyrights, or are in breach of any of the retransmission consent agreements, we may be subject to substantial damages, and/or an injunction that could require us to materially modify certain features that we currently offer to consumers. In addition, as a result of this litigation, we may not be able to renew certain of our retransmission consent agreements and other programming agreements on favorable terms or at all. If we are unable to renew these agreements, there can be no assurance that we would be able to obtain substitute programming, or that such substitute programming would be comparable in quality or cost to our existing programming. Loss of access to existing programming could have a material adverse effect on our business, financial condition and results of operations, including, among other things, our gross new subscriber activations and subscriber churn rate. We cannot predict with any degree of certainty the outcome of these suits or determine the extent of any potential liability or damages. Joao Control & Monitoring Systems LLC On April 23, 2014, Joao Control & Monitoring Systems, LLC (“Joao Control”) filed a complaint against DISH Network in the United States District Court for the District of Delaware, alleging infringement of United States Patent No. 6,549,130 (the “130 patent”), which is entitled “Control Apparatus and Method for Vehicles and/or for Premises.” Joao alleges that we infringe the 130 patent by making, using, providing and/or importing remotely-accessed DVRs. On the same day, Joao Control also filed similar actions against DirecTV; Verizon Communications, Inc.; Time Warner Cable Inc.; Cox Communications, Inc.; and Cablevision Systems Corporation, among others. Joao Control is an entity that seeks to license an acquired patent portfolio without itself practicing any of the claims recited therein. Joao Control never served us with its complaint and on June 23, 2014, Joao Control dismissed its complaint against DISH Network without prejudice. LightSquared/Harbinger Capital Partners LLC (LightSquared Bankruptcy) As previously disclosed in our public filings, L-Band Acquisition, LLC (“LBAC”), DISH Network’s wholly-owned subsidiary, entered into a Plan Support Agreement (the “PSA”) with certain senior secured lenders to LightSquared LP (the “LightSquared LP Lenders”) on July 23, 2013, which contemplated the purchase by LBAC of substantially all of the assets of LightSquared LP and certain of its subsidiaries (the “LBAC Bid”) that are debtors and debtors in possession in the LightSquared bankruptcy cases pending in the United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”), which cases are jointly administered under the caption In re LightSquared Inc., et. al., Case No. 12 12080 (SCC). Pursuant to the PSA, LBAC was entitled to terminate the PSA in certain circumstances, certain of which required three business days’ written notice, including, without limitation, in the event that certain milestones specified in the PSA were not met. On January 7, 2014, LBAC delivered written notice of termination of the PSA to the LightSquared LP Lenders. As a result, the PSA terminated effective on January 10, 2014, and the LBAC Bid was withdrawn. On August 6, 2013, Harbinger Capital Partners LLC and other affiliates of Harbinger (collectively, “Harbinger”), a shareholder of LightSquared Inc., filed an adversary proceeding against DISH Network, LBAC, EchoStar, Charles W. Ergen (our Chairman), SP Special Opportunities, LLC (“SPSO”) (an entity controlled by Mr. Ergen), and certain other parties, in the Bankruptcy Court. Harbinger alleged, among other things, claims based on fraud, unfair competition, civil conspiracy and tortious interference with prospective economic advantage related to certain purchases of LightSquared secured debt by SPSO. Subsequently, LightSquared intervened to join in certain claims alleged against certain defendants other than DISH Network, LBAC and EchoStar. On October 29, 2013, the Bankruptcy Court dismissed all of the claims in Harbinger’s complaint in their entirety, but granted leave for LightSquared to file its own complaint in intervention. On November 15, 2013, LightSquared filed its complaint, which included various claims against DISH Network, EchoStar, Mr. Ergen and SPSO. On December 2, 2013, Harbinger filed an amended complaint, asserting various claims against SPSO. On December 12, 2013, the Bankruptcy Court dismissed several of the claims asserted by LightSquared and Harbinger. The surviving claims include, among others, LightSquared’s claims against SPSO for declaratory relief, breach of contract and statutory disallowance; LightSquared’s tortious interference claim against DISH Network, EchoStar and Mr. Ergen; and Harbinger’s claim against SPSO for statutory disallowance. These claims proceeded to a non-jury trial on January 9, 2014. In its Post-Trial Findings of Fact and Conclusions of Law entered on June 10, 2014, the Bankruptcy Court rejected all claims against DISH Network and EchoStar, and it rejected some but not all claims against the other defendants. DISH Network intends to vigorously defend any claims against it in this proceeding and cannot predict with any degree of certainty the outcome of this proceeding or determine the extent of any potential liability or damages. LightSquared/Harbinger Capital Partners LLC (LightSquared Colorado Action) On July 8, 2014, Harbinger filed suit against DISH Network, LBAC, Mr. Ergen, SPSO, and certain other parties, in the United States District Court for the District of Colorado. The complaint asserts claims for tortious interference with contract and abuse of process, as well as claims alleging violations of the federal Racketeering Influenced and Corrupt Organization Act and the Colorado Organized Crime Control Act. Harbinger seeks to rely on many of the same facts and circumstances that were at issue in the LightSquared adversary proceeding pending in the Bankruptcy Court. Harbinger argues that the defendants’ alleged conduct, among other things, is responsible for Harbinger’s losing control of LightSquared and causing breaches of Harbinger’s stockholder agreement. The complaint seeks damages in excess of $500 million, which under federal and state law may be trebled. DISH Network intends to vigorously defend any claims against it in this case and cannot predict with any degree of certainty the outcome of this proceeding or determine the extent of any potential liability or damages. LightSquared Transaction Shareholder Derivative Actions On August 9, 2013, a purported shareholder of DISH Network, Jacksonville Police and Fire Pension Fund (“Jacksonville PFPF”), filed a putative shareholder derivative action in the District Court for Clark County, Nevada alleging, among other things, breach of fiduciary duty claims against the members of DISH Network’s Board of Directors as of that date: Charles W. Ergen; Joseph P. Clayton; James DeFranco; Cantey M. Ergen; Steven R. Goodbarn; David K. Moskowitz; Tom A. Ortolf; and Carl E. Vogel (collectively, the “Director Defendants”). In its first amended complaint, Jacksonville PFPF asserted claims that Mr. Ergen breached his fiduciary duty to DISH Network in connection with certain purchases of LightSquared debt by SPSO, an entity controlled by Mr. Ergen, and that the other Director Defendants aided and abetted that alleged breach of duty. The Jacksonville PFPF claims alleged that (1) the debt purchases created an impermissible conflict of interest and (2) put at risk the LBAC Bid, which as noted above has been withdrawn. Jacksonville PFPF further claimed that most members of DISH Network’s Board of Directors are beholden to Mr. Ergen to an extent that prevents them from discharging their duties in connection with DISH Network’s participation in the LightSquared bankruptcy auction process. Jacksonville PFPF is seeking an unspecified amount of damages. Jacksonville PFPF dismissed its claims against Mr. Goodbarn on October 8, 2013. Jacksonville PFPF sought a preliminary injunction that would enjoin Mr. Ergen and all of the Director Defendants other than Mr. Goodbarn from influencing DISH Network’s efforts to acquire certain assets of LightSquared in the bankruptcy proceeding. On November 27, 2013, the Court denied that request but granted narrower relief enjoining Mr. Ergen and anyone acting on his behalf from participating in negotiations related to one aspect of the LBAC Bid, which, as noted above, has been withdrawn. Five alleged shareholders have filed substantially similar putative derivative complaints in state and federal courts alleging the same or substantially similar claims. On September 18, 2013, DCM Multi-Manager Fund, LLC filed a duplicative putative derivative complaint in the District Court for Clark County, Nevada, which was consolidated with the Jacksonville PFPF action on October 9, 2013. Between September 25, 2013 and October 2, 2013, City of Daytona Beach Police Officers and Firefighters Retirement System, Louisiana Municipal Police Employees’ Retirement System and Iron Worker Mid-South Pension Fund filed duplicative putative derivative complaints in the United States District Court for the District of Colorado. Also on October 2, 2013, Iron Workers District Council (Philadelphia and Vicinity) Retirement and Pension Plan filed its complaint in the United States District Court for the District of Nevada. On October 11, 2013, Iron Worker Mid-South Pension Fund dismissed its claims without prejudice. On October 30, 2013, Louisiana Municipal Police Employees’ Retirement System dismissed its claims without prejudice and, on January 2, 2014, filed a new complaint in the District Court for Clark County, Nevada, which, on May 2, 2014, was consolidated with the Jacksonville PFPF action. On December 13, 2013, City of Daytona Beach Police Officers and Firefighters Retirement System voluntarily dismissed its claims without prejudice. On March 28, 2014, Iron Workers District Council (Philadelphia and Vicinity) Retirement and Pension Plan voluntarily dismissed its claims without prejudice. On July 25, 2014, Jacksonville PFPF filed a second amended complaint, which added claims against George R. Brokaw and Charles M. Lillis, as Director Defendants, and Thomas A. Cullen, R. Stanton Dodge and K. Jason Kiser, as officers of DISH Network. Jacksonville PFPF asserted five claims in its second amended complaint, each of which alleged breaches of the duty of loyalty. Three of the claims were asserted solely against Mr. Ergen; one claim was made against all of the Director Defendants, other than Mr. Ergen and Mr. Clayton; and the final claim was made against Messrs. Cullen, Dodge and Kiser. DISH Network’s Board of Directors has established a Special Litigation Committee to review the factual allegations and legal claims in these actions. On October 24, 2014, the Special Litigation Committee filed a report in the District Court for Clark County, Nevada regarding its investigation of the claims and allegations asserted in Jacksonville PFPF’s second amended complaint. DISH Network cannot predict with any degree of certainty the outcome of these suits or determine the extent of any potential liability or damages. Norman IP Holdings, LLC On September 15, 2011, Norman IP Holdings, LLC (“Norman”) filed a patent infringement complaint (the “2011 Action”) against Lexmark International Corporation (“Lexmark”) and Brother International Corporation (“Brother”), in the United States District Court for the Eastern District of Texas, alleging infringement of United States Patent Nos. 5,592,555 (the “555 patent”); 5,530,597 (the “597 patent”) and 5,502,689 (the “689 patent”) by Lexmark, and infringement of the 555 patent and the 689 patent by Brother. On January 27, 2012, Norman filed a second amended complaint in the 2011 Action that added DISH Network as a defendant, among others, in which it asserted the 555 patent and the 689 patent against us. On September 21, 2012, Norman served us with preliminary infringement contentions related to the 555 patent and the 689 patent, as well as the 597 patent, which outlined Norman’s claims with respect to certain DISH products. On February 8, 2013, Norman filed a third amended complaint in the 2011 Action, in which it added claims against us alleging infringement of the 597 patent. On April 8, 2013, Norman filed a fourth amended complaint in the 2011 Action, in which it added new claims against us alleging infringement of additional DISH products. On May 1, 2013, Norman filed a fifth amended complaint in the 2011 Action, in which it named Mercedes-Benz USA, LLC; Volkswagen Group of America, Inc.; Xerox Corporation; ZTE (USA) Inc. and ZTE Solutions, Inc. as defendants, in addition to us. On July 9, 2013, the Court ordered Norman to file a new sixth amended complaint limiting Norman’s claims against us to those specifically referenced in its September 21, 2012 preliminary infringement contentions. As a result, on July 10, 2013, Norman filed a sixth amended complaint in the 2011 Action, in which it asserted claims against our wholly-owned subsidiary DISH Network L.L.C. replacing DISH Network as defendant, alleging that the use of certain Broadcom chipsets in DISH DVR systems infringes the 689 patent. In addition, Norman withdrew all infringement claims against us regarding the 555 patent and the 597 patent. On July 12, 2013, we filed a motion to dismiss the 2011 Action, because Norman failed to comply with the Court’s July 9, 2013 order. In addition, on May 10, 2013, Norman filed a separate patent infringement complaint (the “2013 Action”) against us in the United States District Court for the Eastern District of Texas, asserting infringement of the 555, 597 and 689 patents, as well as United States Patent Nos. 5,608,873 (the “873 patent”) and 5,771,394 (the “394 patent”). The infringement claims asserted in the 2013 Action relate to different DISH products than Norman identified in the 2011 Action. On October 18, 2013, the parties stipulated that Norman will dismiss all of its claims against DISH Network L.L.C. in the 2011 Action, and re-assert them in the 2013 Action. The 689 patent relates to a clock generator capable of shut-down mode and clock generation method, the 555 patent relates to a wireless communications privacy method and system, the 597 patent relates to an interrupt enable circuit that allows devices to exit processes without using a hardware reset, the 873 patent relates to a device and method for providing inter-processor communication in a multi-processor architecture, and the 394 patent relates to a servo loop control apparatus having a master microprocessor and at least one autonomous streamlined signal processor. Norman is an entity that seeks to license an acquired patent portfolio without itself practicing any of the claims recited therein. On May 30, 2014, Norman dismissed the 2013 Action against us with prejudice, pursuant to a settlement agreement. Personalized Media Communications, Inc. During 2008, Personalized Media Communications, Inc. (“PMC”) filed suit against DISH Network; EchoStar and Motorola Inc., in the United States District Court for the Eastern District of Texas, alleging infringement of United States Patent Nos. 5,109,414; 4,965,825; 5,233,654; 5,335,277 and 5,887,243, which relate to satellite signal processing. PMC is an entity that seeks to license an acquired patent portfolio without itself practicing any of the claims recited therein. Subsequently, Motorola Inc. settled with PMC, leaving DISH Network and EchoStar as defendants. On July 18, 2012, pursuant to a Court order, PMC filed a Second Amended Complaint that added Rovi Guides, Inc. (f/k/a/ Gemstar-TV Guide International, Inc.) and TVG-PMC, Inc. (collectively, “Gemstar”) as a party, and added a new claim against all defendants seeking a declaratory judgment as to the scope of Gemstar’s license to the patents in suit, under which DISH Network and EchoStar are sublicensees. On August 12, 2014, in response to the parties’ respective summary judgment motions related to the Gemstar license issues, the Court ruled in favor of PMC and dismissed all claims by or against Gemstar and entered partial final judgment in PMC’s favor as to those claims. On September 16, 2014, DISH Network and EchoStar filed a notice of appeal of that partial final judgment, which is pending. A trial date is set for January 12, 2015. PMC has informed DISH Network that it will not pursue at trial its claim for infringement of United States Patent No. 5,109,414. PMC’s damages expert contends that DISH Network and EchoStar are liable for damages ranging from approximately $500 million to $650 million as of March 31, 2012, which does not include pre-judgment interest and may be trebled under Federal law. We intend to vigorously defend this case. In the event that a court ultimately determines that we infringe any of the asserted patents, we may be subject to substantial damages, which may include treble damages, and/or an injunction that could cause us to materially modify certain features that we currently offer to consumers. We cannot predict with any degree of certainty the outcome of the suit or determine the extent of any potential liability or damages. Phoenix Licensing, L.L.C./LPL Licensing, L.L.C. On October 17, 2014, Phoenix Licensing, L.L.C. and LPL Licensing, L.L.C. (together referred to as “Phoenix”) filed a complaint against DISH Network and our wholly-owned subsidiary DISH Network L.L.C. in the United States District Court for the Eastern District of Texas, alleging infringement of United States Patent Nos. 5,987,434 entitled “Apparatus and Method for Transacting Marketing and Sales of Financial Products” (the “434 patent”); 7,890,366 entitled “Personalized Communication Documents, System and Method for Preparing Same” (the “366 patent); 8,352,317 entitled “System for Facilitating Production of Variable Offer Communications” (the “317 patent”); 8,234,184 entitled “Automated Reply Generation Direct Marketing System” (the “184 patent”); and 6,999,938 entitled “Automated Reply Generation Direct Marketing System” (the “938 patent”). Phoenix alleges that we infringe the asserted patents by making and using products and services that generate customized marketing materials. Phoenix is an entity that seeks to license a patent portfolio without itself practicing any of the claims recited therein. We intend to vigorously defend this case. In the event that a court ultimately determines that we infringe the asserted patents, we may be subject to substantial damages, which may include treble damages, and/or an injunction that could require us to materially modify certain features that we currently offer to consumers. We cannot predict with any degree of certainty the outcome of the suit or determine the extent of any potential liability or damages. Preservation Technologies, LLC In December 2011, Preservation Technologies, LLC (“Preservation Technologies”) filed suit against DISH Network in the United States District Court for the Central District of California. In the Operative Seventh Amended Complaint, filed on March 22, 2013, Preservation Technologies also names Netflix, Inc.; Hulu, LLC; AT&T Services, Inc.; Cox Communications, Inc.; Disney Online; American Broadcasting Companies, Inc.; Yahoo! Inc.; Wal-Mart Stores, Inc.; Vudu, Inc. and ESPN Internet Ventures as defendants. Preservation Technologies alleges that the BLOCKBUSTER On Demand, DISH branded pay-TV and DISH Online services and our Hopper and Joey® set-top boxes infringe United States Patent Nos. 5,813,014; 5,832,499; 6,092,080; 6,353,831; 6,574,638; 6,199,060; 5,832,495; 6,549,911; 6,212,527 and 6,477,537. The patents relate to digital libraries, the management of multimedia assets and the cataloging of multimedia data. Preservation Technologies is an entity that seeks to license an acquired patent portfolio without itself practicing any of the claims recited therein. Effective June 18, 2014, Preservation Technologies dismissed all of its claims against DISH Network with prejudice, pursuant to a settlement agreement. Qurio Holdings, Inc. On September 26, 2014, Qurio Holdings, Inc. (“Qurio”) filed a complaint against DISH Network and our wholly-owned subsidiary DISH Network L.L.C., in the United States District Court for the Northern District of Illinois, alleging infringement of United States Patent No. 8,102,863 entitled “Highspeed WAN To Wireless LAN Gateway” (the “863 Patent”) and United States Patent No. 7,787,904 entitled “Personal Area Network Having Media Player And Mobile Device Controlling The Same” (the “904 Patent”). On the same day, Qurio filed similar complaints against Comcast and DirecTV. Qurio is an entity that seeks to license a patent portfolio without itself practicing any of the claims recited therein. We intend to vigorously defend this case. In the event that a court ultimately determines that we infringe the asserted patents, we may be subject to substantial damages, which may include treble damages, and/or an injunction that could cause us to materially modify certain features that we currently offer to consumers. We cannot predict with any degree of certainty the outcome of the suit or determine the extent of any potential liability or damages. Ronald A. Katz Technology Licensing, L.P. During 2007, Ronald A. Katz Technology Licensing, L.P. (“Katz”) filed a patent infringement action against our wholly-owned subsidiary DISH Network L.L.C., in the United States District Court for the Northern District of California. The suit originally alleged infringement of 19 patents owned by Katz. The patents relate to interactive voice response, or IVR, technology. The case has been transferred and consolidated for pretrial purposes in the United States District Court for the Central District of California by order of the Judicial Panel on Multidistrict Litigation. Only four patents remain in the case against us, of which all are expired and two are subject to granted reexamination proceedings before the United States Patent and Trademark Office. We and Katz entered into a settlement agreement effective October 8, 2014, under which Katz agreed to dismiss the action against us with prejudice. Technology Development and Licensing L.L.C. On January 22, 2009, Technology Development and Licensing L.L.C. (“TDL”) filed suit against DISH Network and EchoStar, in the United States District Court for the Northern District of Illinois, alleging infringement of United States Patent No. Re. 35,952, which relates to certain favorite channel features. TDL is an entity that seeks to license an acquired patent portfolio without itself practicing any of the claims recited therein. The case has been stayed since July 2009 pending two reexamination petitions before the United States Patent and Trademark Office. We intend to vigorously defend this case. In the event that a court ultimately determines that we infringe the asserted patent, we may be subject to substantial damages, which may include treble damages, and/or an injunction that could cause us to materially modify certain features that we currently offer to consumers. We cannot predict with any degree of certainty the outcome of the suit or determine the extent of any potential liability or damages. TQ Beta LLC On June 30, 2014, TQ Beta LLC (“TQ Beta”) filed a complaint against us; our wholly-owned subsidiary DISH Network L.L.C; DISH Network; EchoStar; and EchoStar’s subsidiaries EchoStar Technologies L.L.C., Hughes Satellite Systems Corporation, and Sling Media Inc., in the United States District Court for the District of Delaware. The Complaint alleges infringement of United States Patent No. 7,203,456 (the “456 patent”), which is entitled “Method and Apparatus for Time and Space Domain Shifting of Broadcast Signals.” TQ Beta alleges that our Hopper set-top boxes, ViP 722 and ViP 722k DVR devices, as well as our DISH Anywhere service and DISH Anywhere mobile application, infringe the 456 patent. TQ Beta is an entity that seeks to license an acquired patent portfolio without itself practicing any of the claims recited therein. We intend to vigorously defend this case. In the event that a court ultimately determines that we infringe the asserted patent, we may be subject to substantial damages, which may include treble damages, and/or an injunction that could require us to materially modify certain features that we currently offer to consumers. We cannot predict with any degree of certainty the outcome of the suit or determine the extent of any potential liability or damages. Waste Disposal Inquiry The California Attorney General and the Alameda County (California) District Attorney are investigating whether certain of our waste disposal policies, procedures and practices are in violation of the California Business and Professions Code and the California Health and Safety Code. We expect that these entities will seek injunctive and monetary relief. The investigation appears to be part of a broader effort to investigate waste handling and disposal processes of a number of industries. While we are unable to predict the outcome of this investigation, we do not believe that the outcome will have a material effect on our results of operations, financial condition or cash flows. Other In addition to the above actions, we are subject to various other legal proceedings and claims which arise in the ordinary course of business, including, among other things, disputes with programmers regarding fees. In our opinion, the amount of ultimate liability with respect to any of these actions is unlikely to materially affect our financial condition, results of operations or liquidity, though the outcomes could be material to our operating results for any particular period, depending, in part, upon the operating results for such period.

Related Party Transactions

9 Months Ended

Sep. 30, 2014

Related Party Transactions

Related Party Transactions

10. Related Party Transactions

Related Party Transactions with DISH Network

On October 14, 2014, we paid a dividend of $1.5 billion to DOC in connection with, among other things, DISH Network’s general corporate purposes.

On May 2, 2014, DISH Network contributed its equity interest in DISH Digital to us. We recorded all of the assets and liabilities at historical cost and the difference was recorded as a deemed distribution in “Stockholder’s equity (deficit)” on our Condensed Consolidated Balance Sheets. As a result, all operating activities of DISH Digital are included in our financial results beginning May 2, 2014.

On March 28, 2014, we paid a dividend of $650 million to DOC in connection with, among other things, the funding of certain payments by DISH Network related to its winning bid for all 176 wireless spectrum licenses in the recent H Block auction. See Note 8 for further information.

Blockbuster. On April 26, 2011, DISH Network completed the acquisition of most of the assets of Blockbuster, Inc. During the three and nine months ended September 30, 2013, we recorded $3 million and $11 million, respectively, of “Subscriber-related expenses” on our Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) for Blockbuster services provided to our subscribers related to certain of our promotions. As of December 31, 2013, Blockbuster had ceased material operations. As a result, during the three and nine months ended September 30, 2014, we did not record any expense related to these services.

Advertising Sales. We provide advertising services to DISH Network’s broadband business. During the three months ended September 30, 2014 and 2013, we recorded revenue associated with these services of $5 million and $5 million, respectively, in “Subscriber-related revenue” on our Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). During the nine months ended September 30, 2014 and 2013, we recorded revenue associated with these services of $14 million and $11 million, respectively.

Blockbuster, Broadband, Wireless and Other Operations. We provide certain administrative support such as legal, information systems, marketing, human resources, accounting and finance services to DISH Network’s Blockbuster, Broadband, Wireless and other operations. In addition, we provide call center, installation and other services to DISH Network for its Broadband business. During the three months ended September 30, 2014 and 2013, the costs associated with these services were $3 million and $3 million, respectively. During the nine months ended September 30, 2014 and 2013, the costs associated with these services were $8 million and $7 million, respectively.

Related Party Transactions with EchoStar

Following the Spin-off, DISH Network and EchoStar have operated as separate publicly-traded companies, and, except for the Satellite and Tracking Stock Transaction described in Note 4 and below, neither entity has any ownership interest in the other. However, a substantial majority of the voting power of the shares of both companies is owned beneficially by Charles W. Ergen, our Chairman, and by certain trusts established by Mr. Ergen for the benefit of his family.

EchoStar is our primary supplier of set-top boxes and digital broadcast operations and a supplier of a majority of our transponder capacity. Generally, the amounts we pay EchoStar for products and services are based on pricing equal to EchoStar’s cost plus a fixed margin (unless noted differently below), which will vary depending on the nature of the products and services provided.

In connection with and following the Spin-off, we and EchoStar have entered into certain agreements pursuant to which we obtain certain products, services and rights from EchoStar, EchoStar obtains certain products, services and rights from us, and we and EchoStar have indemnified each other against certain liabilities arising from our respective businesses. We also may enter into additional agreements with EchoStar in the future. The following is a summary of the terms of our principal agreements with EchoStar that may have an impact on our financial condition and results of operations.

“Equipment sales, services and other revenue — EchoStar”

Remanufactured Receiver Agreement. We entered into a remanufactured receiver agreement with EchoStar pursuant to which EchoStar has the right, but not the obligation, to purchase remanufactured receivers and accessories from us at cost plus a fixed margin, which varies depending on the nature of the equipment purchased. In November 2014, we and EchoStar extended this agreement until December 31, 2015. EchoStar may terminate the remanufactured receiver agreement for any reason upon at least 60 days notice to us. We may also terminate this agreement if certain entities acquire us.

Professional Services Agreement. Prior to 2010, in connection with the Spin-off, DISH Network entered into various agreements with EchoStar including the Transition Services Agreement, Satellite Procurement Agreement and Services Agreement, which all expired on January 1, 2010 and were replaced by a Professional Services Agreement. During 2009, DISH Network and EchoStar agreed that EchoStar shall continue to have the right, but not the obligation, to receive the following services from DISH Network, among others, certain of which were previously provided under the Transition Services Agreement: information technology, travel and event coordination, internal audit, legal, accounting and tax, benefits administration, program acquisition services and other support services. Additionally, DISH Network and EchoStar agreed that DISH Network shall continue to have the right, but not the obligation, to engage EchoStar to manage the process of procuring new satellite capacity for DISH Network (previously provided under the Satellite Procurement Agreement) and receive logistics, procurement and quality assurance services from EchoStar (previously provided under the Services Agreement) and other support services. The Professional Services Agreement automatically renewed on January 1, 2014 for an additional one-year period until January 1, 2015 and renews automatically for successive one-year periods thereafter, unless terminated earlier by either party upon at least 60 days notice. However, either party may terminate the Professional Services Agreement in part with respect to any particular service it receives for any reason upon at least 30 days notice.

Management Services Agreement. In connection with the Spin-off, DISH Network entered into a Management Services Agreement with EchoStar pursuant to which DISH Network has made certain of its officers available to provide services (which were primarily legal and accounting services) to EchoStar. Effective June 15, 2013, the Management Services Agreement was terminated by EchoStar. EchoStar made payments to DISH Network based upon an allocable portion of the personnel costs and expenses incurred by DISH Network with respect to any such officers (taking into account wages and fringe benefits). These allocations were based upon the estimated percentages of time spent by DISH Network’s executive officers performing services for EchoStar under the Management Services Agreement. EchoStar also reimbursed DISH Network for direct out-of-pocket costs incurred by DISH Network for management services provided to EchoStar. DISH Network and EchoStar evaluated all charges for reasonableness at least annually and made any adjustments to these charges as DISH Network and EchoStar mutually agreed upon.

Satellite Capacity Leased to EchoStar. Since the Spin-off, we have entered into certain satellite capacity agreements pursuant to which EchoStar leases certain satellite capacity on certain satellites owned by us. The fees for the services provided under these satellite capacity agreements depend, among other things, upon the orbital location of the applicable satellite, the number of transponders that are leased on the applicable satellite and the length of the lease. The term of each lease is set forth below:

· EchoStar XV. During May 2013, we began leasing satellite capacity to EchoStar on EchoStar XV and relocated the satellite for testing at EchoStar’s Brazilian authorization at the 45 degree orbital location. Effective March 1, 2014, this lease converted to a month-to-month lease. Both parties have the right to terminate this lease with 30 days notice. Upon termination, EchoStar is responsible, among other things, for relocating this satellite from the 45 degree orbital location back to the 61.5 degree orbital location.

Real Estate Lease Agreements. Since the Spin-off, DISH Network has entered into lease agreements pursuant to which DISH Network leases certain real estate to EchoStar. The rent on a per square foot basis for each of the leases is comparable to per square foot rental rates of similar commercial property in the same geographic areas, and EchoStar is responsible for its portion of the taxes, insurance, utilities and maintenance of the premises. The term of each lease is set forth below:

· El Paso Lease Agreement. During 2012, DISH Network leased certain space at 1285 Joe Battle Blvd. El Paso, Texas to EchoStar for a period ending on August 1, 2015, which also provides EchoStar with renewal options for four consecutive three-year terms.

· American Fork Occupancy License Agreement. During 2013, DISH Network subleased certain space at 796 East Utah Valley Drive, American Fork, Utah to EchoStar for a period ending on July 31, 2017.

“Satellite and transmission expenses”

During the three months ended September 30, 2014 and 2013, we incurred $169 million and $130 million, respectively, for satellite and transmission expenses from EchoStar. These amounts are recorded in “Satellite and transmission expenses” on our Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). During the nine months ended September 30, 2014 and 2013, we incurred $476 million and $365 million, respectively, for these satellite and transmission expenses. The agreements pertaining to these expenses are discussed below.

Broadcast Agreement. Effective January 1, 2012, we and EchoStar entered into a broadcast agreement (the “2012 Broadcast Agreement”) pursuant to which EchoStar provides broadcast services to us, including teleport services such as transmission and downlinking, channel origination services, and channel management services, for the period from January 1, 2012 to December 31, 2016. The fees for services provided under the 2012 Broadcast Agreement are calculated at either: (a) EchoStar’s cost of providing the relevant service plus a fixed dollar fee, which is subject to certain adjustments; or (b) EchoStar’s cost of providing the relevant service plus a fixed margin, which will depend on the nature of the services provided. We have the ability to terminate channel origination services and channel management services for any reason and without any liability upon at least 60 days notice to EchoStar. If we terminate the teleport services provided under the 2012 Broadcast Agreement for a reason other than EchoStar’s breach, we are generally obligated to reimburse EchoStar for any direct costs EchoStar incurs related to any such termination that it cannot reasonably mitigate.

Broadcast Agreement for Certain Sports Related Programming. During May 2010, we and EchoStar entered into a broadcast agreement pursuant to which EchoStar provides certain broadcast services to us in connection with our carriage of certain sports related programming. The term of this agreement is for ten years. If we terminate this agreement for a reason other than EchoStar’s breach, we are generally obligated to reimburse EchoStar for any direct costs EchoStar incurs related to any such termination that it cannot reasonably mitigate. The fees for the broadcast services provided under this agreement depend, among other things, upon the cost to develop and provide such services.

Satellite Capacity Leased from EchoStar. Since the Spin-off, we have entered into certain satellite capacity agreements pursuant to which we lease certain satellite capacity on certain satellites owned or leased by EchoStar. The fees for the services provided under these satellite capacity agreements depend, among other things, upon the orbital location of the applicable satellite, the number of transponders that are leased on the applicable satellite and the length of the lease. The term of each lease is set forth below:

· EchoStar I, VII, X, XI and XIV. On March 1, 2014, we began leasing certain capacity from EchoStar on the EchoStar I, VII, X, XI and XIV satellites. The term of each satellite capacity agreement generally terminates upon the earlier of: (i) the end-of-life of the satellite; (ii) the date the satellite fails; or (iii) a certain date, which depends upon, among other things, the estimated useful life of the satellite. We generally have the option to renew each satellite capacity agreement on a year-to-year basis through the end of the respective satellite’s life. There can be no assurance that any options to renew such agreements will be exercised.

· EchoStar VIII. During May 2013, we began leasing capacity from EchoStar on EchoStar VIII as an in-orbit spare. Effective March 1, 2014, this lease converted to a month-to-month lease. Both parties have the right to terminate this lease with 30 days notice.

· EchoStar IX. We lease certain satellite capacity from EchoStar on EchoStar IX. Subject to availability, we generally have the right to continue to lease satellite capacity from EchoStar on EchoStar IX on a month-to-month basis.

· EchoStar XII. The lease for EchoStar XII generally terminates upon the earlier of: (i) the end-of-life or replacement of the satellite (unless we determine to renew on a year-to-year basis); (ii) the date the satellite fails; (iii) the date the transponders on which service is being provided fails; or (iv) a certain date, which depends upon, among other things, the estimated useful life of the satellite, whether the replacement satellite fails at launch or in orbit prior to being placed into service and the exercise of certain renewal options. We generally have the option to renew the lease on a year-to-year basis through the end of the satellite’s life. There can be no assurance that any options to renew this agreement will be exercised.

· EchoStar XVI. During December 2009, we entered into a transponder service agreement with EchoStar to lease all of the capacity on EchoStar XVI, a DBS satellite, after its service commencement date. EchoStar XVI was launched during November 2012 to replace EchoStar XV at the 61.5 degree orbital location and is currently in service. Under the original transponder service agreement, the initial term generally expired upon the earlier of: (i) the end-of-life or replacement of the satellite; (ii) the date the satellite failed; (iii) the date the transponder(s) on which service was being provided under the agreement failed; or (iv) ten years following the actual service commencement date. Prior to expiration of the initial term, we also had the option to renew on a year-to-year basis through the end-of-life of the satellite. Effective December 21, 2012, we and EchoStar amended the transponder service agreement to, among other things, change the initial term to generally expire upon the earlier of: (i) the end-of-life or replacement of the satellite; (ii) the date the satellite fails; (iii) the date the transponder(s) on which service is being provided under the agreement fails; or (iv) four years following the actual service commencement date. Prior to expiration of the initial term, we have the option to renew for an additional six-year period. Prior to expiration of the initial term, EchoStar also has the right, upon certain conditions, to renew for an additional six-year period. If either we or EchoStar exercise our respective six-year renewal options, then we have the option to renew for an additional five-year period prior to expiration of the then-current term. There can be no assurance that any options to renew this agreement will be exercised.

Nimiq 5 Agreement. During 2009, EchoStar entered into a fifteen-year satellite service agreement with Telesat Canada (“Telesat”) to receive service on all 32 DBS transponders on the Nimiq 5 satellite at the 72.7 degree orbital location (the “Telesat Transponder Agreement”). During 2009, EchoStar also entered into a satellite service agreement (the “DISH Nimiq 5 Agreement”) with us, pursuant to which we currently receive service from EchoStar on all 32 of the DBS transponders covered by the Telesat Transponder Agreement. DISH Network has also guaranteed certain obligations of EchoStar under the Telesat Transponder Agreement. See discussion under “Guarantees” in Note 8.

Under the terms of the DISH Nimiq 5 Agreement, we make certain monthly payments to EchoStar that commenced in September 2009 when the Nimiq 5 satellite was placed into service and continue through the service term. Unless earlier terminated under the terms and conditions of the DISH Nimiq 5 Agreement, the service term will expire ten years following the date the Nimiq 5 satellite was placed into service. Upon expiration of the initial term, we have the option to renew the DISH Nimiq 5 Agreement on a year-to-year basis through the end-of-life of the Nimiq 5 satellite. Upon in-orbit failure or end-of-life of the Nimiq 5 satellite, and in certain other circumstances, we have certain rights to receive service from EchoStar on a replacement satellite. There can be no assurance that any options to renew the DISH Nimiq 5 Agreement will be exercised or that we will exercise our option to receive service on a replacement satellite.

QuetzSat-1 Lease Agreement. During 2008, EchoStar entered into a ten-year satellite service agreement with SES Latin America S.A. (“SES”), which provides, among other things, for the provision by SES to EchoStar of service on 32 DBS transponders on the QuetzSat-1 satellite. During 2008, EchoStar also entered into a transponder service agreement (“QuetzSat-1 Transponder Agreement”) with us pursuant to which we receive service from EchoStar on 24 DBS transponders. QuetzSat-1 was launched on September 29, 2011 and was placed into service during the fourth quarter 2011 at the 67.1 degree orbital location while we and EchoStar explored alternative uses for the QuetzSat-1 satellite. In the interim, EchoStar provided us with alternate capacity at the 77 degree orbital location. During the third quarter 2012, we and EchoStar entered into an agreement pursuant to which we sublease five DBS transponders back to EchoStar. During January 2013, QuetzSat-1 was moved to the 77 degree orbital location and we commenced commercial operations at that location in February 2013.

Unless earlier terminated under the terms and conditions of the QuetzSat-1 Transponder Agreement, the initial service term will expire in November 2021. Upon expiration of the initial term, we have the option to renew the QuetzSat-1 Transponder Agreement on a year-to-year basis through the end-of-life of the QuetzSat-1 satellite. Upon an in-orbit failure or end-of-life of the QuetzSat-1 satellite, and in certain other circumstances, we have certain rights to receive service from EchoStar on a replacement satellite. There can be no assurance that any options to renew the QuetzSat-1 Transponder Agreement will be exercised or that we will exercise our option to receive service on a replacement satellite.

103 Degree Orbital Location/SES-3. During May 2012, EchoStar entered into a spectrum development agreement (the “103 Spectrum Development Agreement”) with Ciel Satellite Holdings Inc. (“Ciel”) to develop certain spectrum rights at the 103 degree orbital location (the “103 Spectrum Rights”). During June 2013, we and EchoStar entered into a spectrum development agreement (the “DISH 103 Spectrum Development Agreement”) pursuant to which we may use and develop the 103 Spectrum Rights. Unless earlier terminated under the terms and conditions of the DISH 103 Spectrum Development Agreement, the term generally will continue for the duration of the 103 Spectrum Rights.

In connection with the 103 Spectrum Development Agreement, during May 2012, EchoStar also entered into a ten-year service agreement with Ciel pursuant to which EchoStar leases certain satellite capacity from Ciel on the SES-3 satellite at the 103 degree orbital location (the “103 Service Agreement”). During June 2013, we and EchoStar entered into an agreement pursuant to which we lease certain satellite capacity from EchoStar on the SES-3 satellite (the “DISH 103 Service Agreement”). Under the terms of the DISH 103 Service Agreement, we make certain monthly payments to EchoStar through the service term. Unless earlier terminated under the terms and conditions of the DISH 103 Service Agreement, the initial service term will expire on the earlier of: (i) the date the SES-3 satellite fails; (ii) the date the transponder(s) on which service was being provided under the agreement fails; or (iii) ten years following the actual service commencement date. Upon in-orbit failure or end-of-life of the SES-3 satellite, and in certain other circumstances, we have certain rights to receive service from EchoStar on a replacement satellite. There can be no assurance that we will exercise our option to receive service on a replacement satellite.

TT&C Agreement. Effective January 1, 2012, we entered into a telemetry, tracking and control (“TT&C”) agreement pursuant to which we receive TT&C services from EchoStar for a period ending on December 31, 2016 (the “2012 TT&C Agreement”). The fees for services provided under the 2012 TT&C Agreement are calculated at either: (i) a fixed fee; or (ii) cost plus a fixed margin, which will vary depending on the nature of the services provided. We are able to terminate the 2012 TT&C Agreement for any reason upon 60 days notice.

As part of the Satellite and Tracking Stock Transaction, on February 20, 2014, we amended the 2012 TT&C Agreement to cease the provision of TT&C services from EchoStar for the EchoStar I, EchoStar VII, EchoStar X, EchoStar XI and EchoStar XIV satellites. As of March 1, 2014, EchoStar is providing us TT&C services for the EchoStar XV satellite.

“General and administrative expenses”

During the three months ended September 30, 2014 and 2013, we incurred $25 million and $17 million, respectively, for general and administrative expenses from EchoStar. These amounts are recorded in “General and administrative expenses” on our Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). During the nine months ended September 30, 2014 and 2013, we incurred $74 million and $50 million, respectively, for these general and administrative expenses. The agreements pertaining to these expenses are discussed below. In addition, the expenses incurred pursuant to the Commercial Agreement discussed in “DISH Digital” under “Other Agreements — EchoStar” below, are also included in these amounts.

Product Support Agreement. In connection with the Spin-off, we entered into a product support agreement pursuant to which we have the right, but not the obligation, to receive product support from EchoStar (including certain engineering and technical support services) for all set-top boxes and related accessories that EchoStar has previously sold and in the future may sell to us. The fees for the services provided under the product support agreement are calculated at cost plus a fixed margin, which varies depending on the nature of the services provided. The term of the product support agreement is the economic life of such receivers and related accessories, unless terminated earlier. We may terminate the product support agreement for any reason upon at least 60 days notice. In the event of an early termination of this agreement, we are entitled to a refund of any unearned fees paid to EchoStar for the services.

Real Estate Lease Agreements. We have entered into lease agreements pursuant to which we lease certain real estate from EchoStar. The rent on a per square foot basis for each of the leases is comparable to per square foot rental rates of similar commercial property in the same geographic area, and EchoStar is responsible for its portion of the taxes, insurance, utilities and maintenance of the premises. The term of each lease is set forth below:

· Inverness Lease Agreement. The lease for certain space at 90 Inverness Circle East in Englewood, Colorado is for a period ending on December 31, 2016. This agreement can be terminated by either party upon six months prior notice.

· Meridian Lease Agreement. The lease for all of 9601 S. Meridian Blvd. in Englewood, Colorado is for a period ending on December 31, 2016.

· Santa Fe Lease Agreement. The lease for all of 5701 S. Santa Fe Dr. in Littleton, Colorado is for a period ending on December 31, 2016, with a renewal option for one additional year.

· EchoStar Data Networks Sublease Agreement. The sublease for certain space at 211 Perimeter Center in Atlanta, Georgia is for a period ending on October 31, 2016.

· Gilbert Lease Agreement. The lease for certain space at 801 N. DISH Dr. in Gilbert, Arizona terminated on May 31, 2014.

· Cheyenne Lease Agreement. The lease for certain space at 530 EchoStar Drive in Cheyenne, Wyoming is for a period ending on December 31, 2031.

DISHOnline.com Services Agreement. Effective January 1, 2010, we entered into a two-year agreement with EchoStar pursuant to which we receive certain services associated with an online video portal. The fees for the services provided under this services agreement depend, among other things, upon the cost to develop and operate such services. We have the option to renew this agreement for successive one year terms and the agreement may be terminated for any reason upon at least 120 days notice to EchoStar. In November 2014, we exercised our right to renew this agreement for a one-year period ending on December 31, 2015.

DISH Remote Access Services Agreement. Effective February 23, 2010, we entered into an agreement with EchoStar pursuant to which we receive, among other things, certain remote DVR management services. The fees for the services provided under this services agreement depend, among other things, upon the cost to develop and operate such services. This agreement has a term of five years with automatic renewal for successive one year terms. This agreement may be terminated for any reason upon at least 120 days notice to EchoStar.

SlingService Services Agreement. Effective February 23, 2010, we entered into an agreement with EchoStar pursuant to which we receive certain services related to placeshifting. The fees for the services provided under this services agreement depend, among other things, upon the cost to develop and operate such services. This agreement has a term of five years with automatic renewal for successive one year terms. This agreement may be terminated for any reason upon at least 120 days notice to EchoStar.

Application Development Agreement. During the fourth quarter 2012, we and EchoStar entered into a set-top box application development agreement (the “Application Development Agreement”) pursuant to which EchoStar provides us with certain services relating to the development of web-based applications for set-top boxes for a period ending on February 1, 2015. The Application Development Agreement renews automatically for successive one-year periods thereafter, unless terminated earlier by us or EchoStar at any time upon at least 90 days notice. The fees for services provided under the Application Development Agreement are calculated at EchoStar’s cost of providing the relevant service plus a fixed margin, which will depend on the nature of the services provided.

XiP Encryption Agreement. During the third quarter 2012, we entered into an encryption agreement with EchoStar for our whole-home HD DVR line of set-top boxes (the “XiP Encryption Agreement”) pursuant to which EchoStar provides certain security measures on our whole-home HD DVR line of set-top boxes to encrypt the content delivered to the set-top box via a smart card and secure the content between set-top boxes. The term of the XiP Encryption Agreement is for a period until December 31, 2014. Under the XiP Encryption Agreement, we have the option, but not the obligation, to extend the XiP Encryption Agreement for one additional year upon 180 days notice prior to the end of the term. On May 5, 2014, we provided EchoStar notice to extend the XiP Encryption Agreement for one additional year until December 31, 2015. We and EchoStar each have the right to terminate the XiP Encryption Agreement for any reason upon at least 30 days notice and 180 days notice, respectively. The fees for the services provided under the XiP Encryption Agreement are calculated on a monthly basis based on the number of receivers utilizing such security measures each month.

Other Agreements — EchoStar

Receiver Agreement. EchoStar is currently our primary supplier of set-top box receivers. Effective January 1, 2012, we and EchoStar entered into a receiver agreement (the “2012 Receiver Agreement”) pursuant to which we have the right, but not the obligation, to purchase digital set-top boxes, related accessories, and other equipment from EchoStar for the period from January 1, 2012 to December 31, 2014. We have an option, but not the obligation, to extend the 2012 Receiver Agreement for one additional year upon 180 days notice prior to the end of the term. On May 5, 2014, we provided EchoStar notice to extend the 2012 Receiver Agreement for one additional year until December 31, 2015. The 2012 Receiver Agreement allows us to purchase digital set-top boxes, related accessories and other equipment from EchoStar either: (i) at a cost (decreasing as EchoStar reduces costs and increasing as costs increase) plus a dollar mark-up which will depend upon the cost of the product subject to a collar on EchoStar’s mark-up; or (ii) at cost plus a fixed margin, which will depend on the nature of the equipment purchased. Under the 2012 Receiver Agreement, EchoStar’s margins will be increased if they are able to reduce the costs of their digital set-top boxes and their margins will be reduced if these costs increase. EchoStar provides us with standard manufacturer warranties for the goods sold under the 2012 Receiver Agreement. Additionally, the 2012 Receiver Agreement includes an indemnification provision, whereby the parties indemnify each other for certain intellectual property matters. We are able to terminate the 2012 Receiver Agreement for any reason upon at least 60 days notice to EchoStar. EchoStar is able to terminate the 2012 Receiver Agreement if certain entities acquire us.

For the three months ended September 30, 2014 and 2013, we purchased set-top boxes and other equipment from EchoStar of $293 million and $341 million, respectively. For the nine months ended September 30, 2014 and 2013, we purchased set-top boxes and other equipment from EchoStar of $883 million and $947 million, respectively. Included in these amounts are purchases of certain broadband equipment from EchoStar under the 2012 Receiver Agreement. These amounts are initially included in “Inventory” and are subsequently capitalized as “Property and equipment, net” on our Condensed Consolidated Balance Sheets or expensed as “Subscriber acquisition costs” on our Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) when the equipment is deployed.

Tax Sharing Agreement. In connection with the Spin-off, DISH Network entered into a tax sharing agreement with EchoStar which governs our respective rights, responsibilities and obligations after the Spin-off with respect to taxes for the periods ending on or before the Spin-off. Generally, all pre-Spin-off taxes, including any taxes that are incurred as a result of restructuring activities undertaken to implement the Spin-off, are borne by DISH Network, and DISH Network will indemnify EchoStar for such taxes. However, DISH Network is not liable for and will not indemnify EchoStar for any taxes that are incurred as a result of the Spin-off or certain related transactions failing to qualify as tax-free distributions pursuant to any provision of Section 355 or Section 361 of the Internal Revenue Code of 1986, as amended (the “Code”) because of: (i) a direct or indirect acquisition of any of EchoStar’s stock, stock options or assets; (ii) any action that EchoStar takes or fails to take; or (iii) any action that EchoStar takes that is inconsistent with the information and representations furnished to the Internal Revenue Service (“IRS”) in connection with the request for the private letter ruling, or to counsel in connection with any opinion being delivered by counsel with respect to the Spin-off or certain related transactions. In such case, EchoStar is solely liable for, and will indemnify DISH Network for, any resulting taxes, as well as any losses, claims and expenses. The tax sharing agreement will only terminate after the later of the full period of all applicable statutes of limitations, including extensions, or once all rights and obligations are fully effectuated or performed.

In light of the tax sharing agreement, among other things, and in connection with DISH Network’s consolidated federal income tax returns for certain tax years prior to and for the year of the Spin-off, during the third quarter 2013, DISH Network and EchoStar agreed upon a supplemental allocation of the tax benefits arising from certain tax items resolved in the course of the IRS’ examination of these consolidated tax returns. As a result, DISH Network agreed to pay EchoStar $83 million of the tax benefit DISH Network received or will receive. Any payment to EchoStar, including accrued interest, will be made at such time as EchoStar would have otherwise been able to realize such tax benefit. In addition, during the third quarter 2013, DISH Network and EchoStar agreed upon a tax sharing arrangement for filing certain combined state income tax returns and a method of allocating the respective tax liabilities between DISH Network and EchoStar for such combined returns, through the taxable period ending on December 31, 2017.

RUS Implementation Agreement. In September 2010, DISH Broadband L.L.C. (“DISH Broadband”), our wholly-owned subsidiary, was selected by the Rural Utilities Service (“RUS”) of the United States Department of Agriculture to receive up to approximately $14 million in broadband stimulus grant funds (the “Grant Funds”). Effective November 2011, DISH Broadband and HNS entered into a RUS Implementation Agreement (the “RUS Agreement”) pursuant to which HNS provides certain portions of the equipment and broadband service used to implement our RUS program. The RUS Agreement expired during June 2013, when the Grant Funds were exhausted. During the nine months ended September 30, 2013, we expensed $3 million under the RUS Agreement, which is included in “Cost of sales — equipment, services and other” on our Condensed Consolidated Statements of Operations and Comprehensive Income (Loss).

TiVo. On April 29, 2011, DISH Network and EchoStar entered into a settlement agreement with TiVo, Inc. (“TiVo”). The settlement resolved all pending litigation between DISH Network and EchoStar, on the one hand, and TiVo, on the other hand, including litigation relating to alleged patent infringement involving certain DISH digital video recorders, or DVRs.

Under the settlement agreement, all pending litigation was dismissed with prejudice and all injunctions that permanently restrain, enjoin or compel any action by DISH Network or EchoStar were dissolved. DISH Network and EchoStar are jointly responsible for making payments to TiVo in the aggregate amount of $500 million, including an initial payment of $300 million and the remaining $200 million in six equal annual installments between 2012 and 2017. Pursuant to the terms and conditions of the agreements entered into in connection with the Spin-off of EchoStar from DISH Network, DISH Network made the initial payment to TiVo in May 2011, except for the contribution from EchoStar totaling approximately $10 million, representing an allocation of liability relating to EchoStar’s sales of DVR-enabled receivers to an international customer. Future payments will be allocated between DISH Network and EchoStar based on historical sales of certain licensed products, with DISH Network being responsible for 95% of each annual payment.

Patent Cross-License Agreements. During December 2011, DISH Network and EchoStar entered into separate patent cross-license agreements with the same third-party whereby: (i) EchoStar and such third-party licensed their respective patents to each other subject to certain conditions; and (ii) DISH Network and such third-party licensed their respective patents to each other subject to certain conditions (each, a “Cross-License Agreement”). Each Cross License Agreement covers patents acquired by the respective party prior to January 1, 2017 and aggregate payments under both Cross-License Agreements total less than $10 million. Each Cross License Agreement also contains an option to extend each Cross-License Agreement to include patents acquired by the respective party prior to January 1, 2022. If both options are exercised, the aggregate additional payments to such third-party would total less than $3 million. However, DISH Network and EchoStar may elect to extend their respective Cross-License Agreement independently of each other. Since the aggregate payments under both Cross-License Agreements were based on the combined annual revenues of DISH Network and EchoStar, DISH Network and EchoStar agreed to allocate their respective payments to such third-party based on their respective percentage of combined total revenue.

DISH Digital. On May 2, 2014, DISH Network contributed its equity interest in DISH Digital to us. See “Related Party Transactions with DISH Network” within the related party section previously discussed. Effective July 1, 2012, DISH Network and EchoStar formed DISH Digital, which was owned two-thirds by DISH Network and one-third by EchoStar and was consolidated into DISH Network’s financial statements beginning July 1, 2012. DISH Digital was formed to develop and commercialize certain advanced technologies. At that time, DISH Network, EchoStar and DISH Digital entered into the following agreements with respect to DISH Digital: (i) a contribution agreement pursuant to which DISH Network and EchoStar contributed certain assets in exchange for its respective ownership interests in DISH Digital; (ii) a limited liability company operating agreement (the “Operating Agreement”), which provides for the governance of DISH Digital; and (iii) a commercial agreement (the “Commercial Agreement”) pursuant to which, among other things, DISH Digital has: (a) certain rights and corresponding obligations with respect to its business; and (b) the right, but not the obligation, to receive certain services from DISH Network and EchoStar, respectively. Since this was a formation of an entity under common control and a step-up in basis was not allowed, each party’s contributions were recorded at historical book value for accounting purposes. DISH Network consolidated DISH Digital with EchoStar’s ownership position recorded as non-controlling interest.

Effective August 1, 2014, EchoStar and DISH Digital entered into the Exchange Agreement pursuant to which, among other things, DISH Digital distributed certain assets to EchoStar and EchoStar reduced its interest in DISH Digital to a ten percent non-voting interest. We now have a ninety percent equity interest and a 100% voting interest in DISH Digital. In addition, we, EchoStar and DISH Digital amended and restated the Operating Agreement, primarily to reflect the changes implemented by the Exchange Agreement. Finally, we, EchoStar and DISH Digital amended and restated the Commercial Agreement, pursuant to which, among other things, DISH Digital: (1) continues to have certain rights and corresponding obligations with respect to its business; (2) continues to have the right, but not the obligation, to receive certain services from us and EchoStar; and (3) has a license from EchoStar to use certain of the assets distributed to EchoStar as part of the Exchange Agreement.

Since the Exchange Agreement is among entities under common control, we recorded the difference between the historical cost basis of the assets transferred to EchoStar and our historical cost basis in EchoStar’s one-third noncontrolling interest in DISH Digital as a $6 million, net of deferred taxes, capital distribution in “Additional paid-in capital” on our Condensed Consolidated Balance Sheet. In addition, we recorded the initial fair value of EchoStar’s ten percent non-voting interest as a $14 million, net of deferred taxes, deemed distribution in “Additional paid-in capital” on our Condensed Consolidated Balance Sheet. All services provided to DISH Digital by EchoStar under the Commercial Agreement are recorded in “General and administrative expenses” on our Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). See “General and administrative expenses” within the related party section previously discussed.

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 the Satellite and Tracking Stock Transaction with EchoStar pursuant to which, among other things: (i) on March 1, 2014, we transferred to EchoStar and HSSC the Transferred Satellites, including related in-orbit incentive obligations and cash interest payments of approximately $59 million and approximately $11 million in cash in exchange for the Tracking Stock; and (ii) beginning on March 1, 2014, we lease back certain satellite capacity on the Transferred Satellites. The Satellite and Tracking Stock Transaction is further described below:

· Transaction Agreement. On February 20, 2014, DOLLC, DNLLC and EchoStar XI Holding L.L.C., all indirect wholly-owned subsidiaries of us, entered into the Transaction Agreement with EchoStar, HSSC and Alpha Company LLC, a wholly-owned subsidiary of EchoStar, pursuant to which, on March 1, 2014, we, among other things, transferred to EchoStar and HSSC the Transferred Satellites in exchange for the Tracking Stock. The Tracking Stock generally tracks the Hughes Retail Group. The shares of the Tracking Stock issued to us represent an aggregate 80% economic interest in the Hughes Retail Group. Since the Satellite and Tracking Stock Transaction is among entities under common control, we recorded the Tracking Stock at EchoStar and HSSC’s historical cost basis for these instruments of $229 million and $87 million, respectively. The difference between the historical cost basis of the Tracking Stock received and the net carrying value of the Transferred Satellites of $356 million (including debt obligations, net of deferred taxes), plus the $11 million in cash, resulted in a $51 million capital transaction recorded in “Additional paid-in capital” on our Condensed Consolidated Balance Sheet. Although our investment in the Tracking Stock represents an aggregate 80% economic interest in the Hughes Retail Group, we have no operational control or significant influence over the Hughes Retail Group business, and currently there is no public market for the Tracking Stock. As such, the Tracking Stock is accounted for under the cost method of accounting. The Transaction Agreement includes, among other things, customary mutual provisions for representations, warranties and indemnification.

· Satellite Capacity Leased from EchoStar. On February 20, 2014, we entered into satellite capacity agreements with certain subsidiaries of EchoStar pursuant to which, beginning March 1, 2014, we, among other things, lease certain satellite capacity on the Transferred Satellites. See further discussion under “Satellite and transmission expenses — Satellite Capacity Leased from EchoStar.”

· Investor Rights Agreement. On February 20, 2014, EchoStar, HSSC, DOLLC and DNLLC (DOLLC and DNLLC, collectively referred to as the “DISH Investors”) also entered into the Investor Rights Agreement with respect to the Tracking Stock. The Investor Rights Agreement provides, among other things, certain information and consultation rights for the DISH Investors; certain transfer restrictions on the Tracking Stock and certain rights and obligations to offer and sell under certain circumstances (including a prohibition on transfers of the Tracking Stock for one year, with continuing transfer restrictions (including a right of first offer in favor of EchoStar) thereafter, an obligation to sell the Tracking Stock to EchoStar in connection with a change of control of DISH Network and a right to require EchoStar to repurchase the Tracking Stock in connection with a change of control of EchoStar, in each case subject to certain terms and conditions); certain registration rights; certain obligations to provide conversion and exchange rights of the Tracking Stock under certain circumstances; and certain protective covenants afforded to holders of the Tracking Stock. The Investor Rights Agreement generally will terminate as to the DISH Investors at such time as the DISH Investors no longer hold any shares of the HSSC-issued Tracking Stock and any registrable securities under the Investor Rights Agreement.

Other Agreements

In November 2009, Mr. Roger Lynch became employed by both DISH Network and EchoStar as an 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. These expenses are recorded in “Subscriber-related expenses” on our Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). We record all payables in “Trade accounts payable — other” or “Other accrued expenses” on our Condensed Consolidated Balance Sheets.

The table below summarizes our transactions with NagraStar.

	For the Three Months				For the Nine Months
	Ended September 30,				Ended September 30,
	2014		2013		2014		2013
	(In thousands)
Purchases (including fees):
Purchases from NagraStar	$	20,914	$	22,563	$	60,964	$	69,129

	As of
	September 30,		December 31,
	2014		2013
	(In thousands)
Amounts Payable and Commitments:
Amounts payable to NagraStar	$	13,924	$	20,954
Commitments to NagraStar	$	7,749	$	2,463

- Definition

The entire disclosure for related party transactions. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates.

+ References + Details

Summary of Significant Accounting Policies (Policies)	9 Months Ended
Summary of Significant Accounting Policies (Policies)	Sep. 30, 2014
Summary of Significant Accounting Policies
Basis of Presentation	*Basis of Presentation* The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and with the instructions to Form 10-Q and Article 10 of Regulation S-X for interim financial information. Accordingly, these statements do not include all of the information and notes required for complete financial statements prepared under GAAP. In our opinion, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Our results of operations for the interim periods presented are not necessarily indicative of the results that may be expected for the full year. For further information, refer to the Consolidated Financial Statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2013. Certain prior period amounts have been reclassified to conform to the current period presentation.
Principles of Consolidation	*Principles of Consolidation* We consolidate all majority owned subsidiaries, investments in entities in which we have controlling influence and variable interest entities where we have been determined to be the primary beneficiary. Minority interests are recorded as noncontrolling interest or redeemable non-controlling interest. See below for further discussion. Non-majority owned investments are accounted for using the equity method when we have the ability to significantly influence the operating decisions of the investee. When we do not have the ability to significantly influence the operating decisions of an investee, the cost method is used. All significant intercompany accounts and transactions have been eliminated in consolidation.
Redeemable Noncontrolling Interests	Redeemable Noncontrolling Interests. DISH Digital Holding L.L.C. (“DISH Digital”) has been consolidated into our financial statements since May 2, 2014. Effective August 1, 2014, EchoStar Corporation (“EchoStar”) and DISH Digital entered into an exchange agreement (the “Exchange Agreement”) pursuant to which, among other things, DISH Digital distributed certain assets to EchoStar and EchoStar reduced its interest in DISH Digital to a ten percent non-voting interest. EchoStar’s ten percent non-voting interest is redeemable, subject to certain conditions, at fair value within sixty days following the fifth anniversary of the Exchange Agreement. This interest is considered temporary equity and is recorded as “Redeemable noncontrolling interest” in the mezzanine section of our Condensed Consolidated Balance Sheets. Since any redemption of EchoStar’s ten percent non-voting interest would occur at fair value, the “Redeemable noncontrolling interest” was initially accounted for at fair value, which established a minimum threshold value for this interest. Redemption of the interest is contingent on a certain performance goal being achieved by DISH Digital, which is not yet probable of being achieved. At such time that we determine the performance goal to be probable, the value of the “Redeemable noncontrolling interest” will be adjusted for any change in redemption value above the minimum threshold, with the offset recorded in “Additional paid-in capital” on our Condensed Consolidated Balance Sheets. In addition, the operating results of DISH Digital attributable to EchoStar are recorded as “Redeemable noncontrolling interest” in our Condensed Consolidated Balance Sheets effective August 1, 2014. See Note 10 for further discussion on DISH Digital and the Exchange Agreement.
Use of Estimates	*Use of Estimates* The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expense for each reporting period. Estimates are used in accounting for, among other things, allowances for doubtful accounts, self-insurance obligations, deferred taxes and related valuation allowances, uncertain tax positions, loss contingencies, fair value of financial instruments, fair value of options granted under our stock-based compensation plans, fair value of assets and liabilities acquired in business combinations, fair value of multi-element arrangements, capital leases, asset impairments, estimates of future cash flows used to evaluate impairments, useful lives of property, equipment and intangible assets, retailer incentives, programming expenses, subscriber lives and royalty obligations. Sustained economic weakness has increased the inherent uncertainty in the estimates and assumptions indicated above. Actual results may differ from previously estimated amounts, and such differences may be material to our Condensed Consolidated Financial Statements. Estimates and assumptions are reviewed periodically, and the effects of revisions are reflected prospectively in the period they occur.
Fair Value Measurements	*Fair Value Measurements* We determine fair value based on the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants. Market or observable inputs are the preferred source of values, followed by unobservable inputs or assumptions based on hypothetical transactions in the absence of market inputs. We apply the following hierarchy in determining fair value: · Level 1, defined as observable inputs being quoted prices in active markets for identical assets, including U.S. treasury notes; · Level 2, defined as observable inputs other than quoted prices included in Level 1, including quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which significant inputs and significant value drivers are observable in active markets; and · Level 3, defined as unobservable inputs for which little or no market data exists, consistent with reasonably available assumptions made by other participants therefore requiring assumptions based on the best information available. As of September 30, 2014 and December 31, 2013, the carrying value for cash and cash equivalents, trade accounts receivable (net of allowance for doubtful accounts) and current liabilities (excluding the “Current portion of long-term debt and capital lease obligations”) is equal to or approximates fair value due to their short-term nature or proximity to current market rates. See Note 4 for the fair value of our marketable investment securities. Fair values for our publicly traded debt securities are based on quoted market prices, when available. The fair values of private debt are estimated based on an analysis in which we evaluate market conditions, related securities, various public and private offerings, and other publicly available information. In performing this analysis, we make various assumptions regarding, among other things, credit spreads, and the impact of these factors on the value of the debt securities. See Note 7 for the fair value of our long-term debt.
New Accounting Pronouncements	*New Accounting Pronouncements* Revenue from Contracts with Customers. On May 28, 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update 2014-09 (“ASU 2014-09”), Revenue from Contracts with Customers. This converged standard on revenue recognition was issued jointly with the International Accounting Standards Board (“IASB”) to improve financial reporting by creating common revenue recognition guidance for GAAP and International Financial Reporting Standards (“IFRS”). ASU 2014-09 provides a framework for revenue recognition that replaces most existing GAAP revenue recognition guidance when it becomes effective. ASU 2014-09 will become effective for us on January 1, 2017. We are evaluating the effect that ASU 2014-09 will have on our consolidated financial statements and related disclosures. We have not yet selected a transition method nor have we determined the effect of the standard on our ongoing financial reporting.

Marketable Investment Securities, Restricted Cash and Cash Equivalents, and Other Investment Securities (Tables)

9 Months Ended

Sep. 30, 2014

Marketable Investment Securities, Restricted Cash and Cash Equivalents, and Other Investment Securities

Schedule of marketable investment securities, restricted cash and cash equivalents, and other investment securities

	As of
	September 30,		December 31,
	2014		2013
	(In thousands)
Marketable investment securities:
Current marketable investment securities - VRDNs	$	20,538	$	105,854
Current marketable investment securities - other	3,728,301		4,011,472
Total current marketable investment securities	3,748,839		4,117,326
Restricted marketable investment securities (1)	74,194		63,902
Total marketable investment securities	3,823,033		4,181,228

Restricted cash and cash equivalents (1)	6,490		18,878

Other investment securities:
Investment in EchoStar preferred tracking stock - cost method (2)	228,795		—
Investment in HSSC preferred tracking stock - cost method (2)	87,409		—
Other investment securities - cost method (2)	13,546		5,396
Total marketable investment securities and restricted cash and cash equivalents	$	4,159,273	$	4,205,502

(2) Other investment securities are included in “Other noncurrent assets, net” on our Condensed Consolidated Balance Sheets.

Schedule of unrealized gain (loss) on marketable investment securities

	As of September 30, 2014									As of December 31, 2013
	Marketable									Marketable
	Investment		Unrealized							Investment		Unrealized
	Securities		Gains		Losses			Net		Securities		Gains		Losses			Net
	(In thousands)
Debt securities:
VRDNs	$	20,538	$	—	$	—		$	—	$	105,854	$	—	$	—		$	—
Other (including restricted)	3,759,837		6,767		(1,263		)	5,504		4,048,851		5,447		(3,355		)	2,092
Equity securities:
Other	42,658		29,421		—			29,421		26,523		13,286		—			13,286
Total	$	3,823,033	$	36,188	$	(1,263	)	$	34,925	$	4,181,228	$	18,733	$	(3,355	)	$	15,378

Schedule of available-for-sale securities in continuous unrealized loss position by length of time and their fair value

	As of
	September 30, 2014					December 31, 2013
	Fair		Unrealized			Fair		Unrealized
	Value		Loss			Value		Loss
	(In thousands)
Debt Securities:
Less than 12 months	$	1,858,459	$	(1,243	)	$	2,002,239	$	(2,820	)
12 months or more	168,734		(20		)	38,043		(535		)
Total	$	2,027,193	$	(1,263	)	$	2,040,282	$	(3,355	)

Schedule of investments measured at fair value on a recurring basis

	As of
	September 30, 2014								December 31, 2013
	Total		Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3
	(In thousands)
Cash Equivalents (including restricted)	$	4,183,698	$	67,535	$	4,116,163	$	—	$	3,743,328	$	275,277	$	3,468,051	$	—

Debt securities:
VRDNs	$	20,538	$	—	$	20,538	$	—	$	105,854	$	—	$	105,854	$	—
Other (including restricted)	3,759,837		—		3,759,837		—		4,048,851		—		4,048,851		—

Equity securities	42,658		42,658		—		—		26,523		26,523		—		—

Total	$	3,823,033	$	42,658	$	3,780,375	$	—	$	4,181,228	$	26,523	$	4,154,705	$	—

Property and Equipment and FCC Authorizations (Tables)

9 Months Ended

Sep. 30, 2014

Property and Equipment and FCC Authorizations

Schedule of property and equipment

	Depreciable	As of
	Life	September 30,			December 31,
	(In Years)	2014			2013
		(In thousands)
Equipment leased to customers	2-5	$	3,526,090		$	3,496,994
EchoStar I (1)	12	—			201,607
EchoStar VII (1)	15	—			177,000
EchoStar X (1)	15	—			177,192
EchoStar XI (1)	15	—			200,198
EchoStar XIV (1)	15	—			316,541
EchoStar XV	15	277,658			277,658
Satellites acquired under capital lease agreements	10-15	499,819			499,819
Furniture, fixtures, equipment and other	1-10	661,321			600,439
Buildings and improvements	1-40	83,258			80,439
Land	—	5,504			5,504
Construction in progress	—	19,006			39,043
Total property and equipment		5,072,656			6,072,434
Accumulated depreciation (1)		(2,591,343		)	(3,093,111		)
Property and equipment, net		$	2,481,313		$	2,979,323

Schedule of depreciation and amortization expense

	For the Three Months				For the Nine Months
	Ended September 30,				Ended September 30,
	2014		2013		2014		2013
	(In thousands)
Equipment leased to customers	$	208,208	$	188,524	$	607,584	$	538,457
Satellites	15,261		27,171		53,723		81,512
Buildings, furniture, fixtures, equipment and other	22,671		14,054		58,181		43,441
Total depreciation and amortization	$	246,140	$	229,749	$	719,488	$	663,410

Schedule of pay-TV satellite fleet

		Degree	Estimated
	Launch	Orbital	Useful Life
Satellites	Date	Location	(Years)
Owned:
EchoStar XV (1)	July 2010	45	15

Leased from EchoStar (1):
EchoStar I (2)(3)	December 1995	77	NA
EchoStar VII (2)(3)	February 2002	119	NA
EchoStar VIII	August 2002	77	NA
EchoStar IX	August 2003	121	NA
EchoStar X (2)(3)	February 2006	110	NA
EchoStar XI (2)(3)	July 2008	110	NA
EchoStar XII (2)	July 2003	61.5	NA
EchoStar XIV (2)(3)	March 2010	119	NA
EchoStar XVI	November 2012	61.5	NA
Nimiq 5	September 2009	72.7	NA
QuetzSat-1	September 2011	77	NA

Leased from Other Third Party:
Anik F3	April 2007	118.7	NA
Ciel II	December 2008	129	NA

Under Construction:
EchoStar XVIII	2015	110	15

(1) See Note 10 for further discussion of our Related Party Transactions with EchoStar.

(2) We generally have the option to renew each lease on a year-to-year basis through the end of the respective satellite’s useful life.

Long-Term Debt (Tables)

9 Months Ended

Sep. 30, 2014

Long-Term Debt

Schedule of carrying and fair values of the entity's debt facilities

	As of
	September 30, 2014					December 31, 2013
	Carrying					Carrying
	Value			Fair Value		Value			Fair Value
	(In thousands)
6 5/8% Senior Notes due 2014 (1)	$	900,000		$	900,000	$	1,000,000		$	1,040,200
7 3/4% Senior Notes due 2015 (2)	650,001			673,564		750,000			813,750
7 1/8% Senior Notes due 2016	1,500,000			1,591,875		1,500,000			1,657,500
4 5/8% Senior Notes due 2017	900,000			918,099		900,000			946,962
4 1/4% Senior Notes due 2018	1,200,000			1,207,200		1,200,000			1,221,792
7 7/8% Senior Notes due 2019	1,400,000			1,589,000		1,400,000			1,603,000
5 1/8% Senior Notes due 2020	1,100,000			1,127,500		1,100,000			1,104,950
6 3/4% Senior Notes due 2021	2,000,000			2,146,260		2,000,000			2,122,500
5 7/8% Senior Notes due 2022	2,000,000			2,040,000		2,000,000			1,997,500
5 % Senior Notes due 2023	1,500,000			1,447,500		1,500,000			1,458,090
Mortgages and other notes payable (3)	14,892			14,892		59,313			59,313
Subtotal	13,164,893			$	13,655,890	13,409,313			$	14,025,557
Unamortized discounts, net	(16,142		)			(19,198		)
Capital lease obligations (4)	201,867			NA		219,902			NA
Total long-term debt and capital lease obligations (including current portion)	$	13,350,618				$	13,610,017

(1) During the nine months ended September 30, 2014, we repurchased $100 million of our 6 5/8% Senior Notes due 2014 in open market trades. The remaining balance of $900 million was redeemed on October 1, 2014 and is included in “Current portion of long-term debt and capital lease obligations” on our Condensed Consolidated Balance Sheets as of September 30, 2014.

(2) During the nine months ended September 30, 2014, we repurchased $100 million of our 7 3/4% Senior Notes due 2015 in open market trades. The remaining balance of $650 million matures on May 31, 2015 and is included in “Current portion of long-term debt and capital lease obligations” on our Condensed Consolidated Balance Sheets as of September 30, 2014.

(3) On February 20, 2014, we entered into the Satellite and Tracking Stock Transaction, which resulted in a decrease in “Mortgages and other notes payable” of $44 million related to the in-orbit incentive obligations associated with the Transferred Satellites. See Note 4 and Note 10 for further discussion.

(4) Disclosure regarding fair value of capital leases is not required.

- Definition

Tabular disclosure of long-debt instruments or arrangements, including identification, terms, features, collateral requirements and other information necessary to a fair presentation. These are debt arrangements that originally required repayment more than twelve months after issuance or greater than the normal operating cycle of the entity, if longer.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02.22)
-URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21475-112644

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 470
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=6479336&loc=d3e64711-112823

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08.(e),(f))
-URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 835
-SubTopic 30
-Section 55
-Paragraph 8
-URI http://asc.fasb.org/extlink&oid=34725769&loc=d3e28878-108400

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 8
-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21538-112644

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 6
-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21506-112644

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 835
-SubTopic 30
-Section 45
-Paragraph 1A
-URI http://asc.fasb.org/extlink&oid=6451184&loc=d3e28541-108399

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 835
-SubTopic 30
-Section 45
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6451184&loc=d3e28551-108399

Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 7
-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21521-112644

Reference 11: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 02
-Paragraph 22
-Article 5

+ Details

Marketable Investment Securities, Restricted Cash and Cash Equivalents, and Other Investment Securities (Details 3) - USD ($) $ in Thousands	Sep. 30, 2014	Dec. 31, 2013
Accumulated net unrealized gains (losses)
Accumulated net unrealized gains, before tax, in accumulated other comprehensive income (loss)	$ 34,925	$ 15,378
Accumulated net unrealized gains, net of tax, in accumulated other comprehensive income (loss)	25,000	11,000
Components of available-for-sale investments
Debt securities	3,748,839	4,117,326
Total marketable investment securities	3,823,033	4,181,228
Unrealized Gains (Losses) on Marketable Investment Securities
Unrealized Gains	36,188	18,733
Unrealized Losses	(1,263)	(3,355)
Unrealized Gains Losses, Net	34,925	15,378
Contractual maturities of restricted and non-restricted marketable investment securities
Debt securities with contractual maturities within one year	2,487,000
Debt securities with contractual maturities extending longer than one year through and including five years	1,270,000
Debt securities with contractual maturities longer than ten years	23,000
VRDNs
Components of available-for-sale investments
Debt securities	20,538	105,854
Other (including restricted)
Accumulated net unrealized gains (losses)
Accumulated net unrealized gains, before tax, in accumulated other comprehensive income (loss)	5,504	2,092
Components of available-for-sale investments
Debt security	3,759,837	4,048,851
Unrealized Gains (Losses) on Marketable Investment Securities
Unrealized Gains	6,767	5,447
Unrealized Losses	(1,263)	(3,355)
Unrealized Gains Losses, Net	5,504	2,092
Equity securities
Accumulated net unrealized gains (losses)
Accumulated net unrealized gains, before tax, in accumulated other comprehensive income (loss)	29,421	13,286
Components of available-for-sale investments
Equity securities	42,658	26,523
Unrealized Gains (Losses) on Marketable Investment Securities
Unrealized Gains	29,421	13,286
Unrealized Gains Losses, Net	$ 29,421	$ 13,286

Commitments and Contingencies (Details) $ in Thousands							1 Months Ended	9 Months Ended	12 Months Ended
Commitments and Contingencies (Details) $ in Thousands	Oct. 30, 2014 USD ($) item	Mar. 28, 2014 USD ($) item	Dec. 20, 2013	Dec. 17, 2013 USD ($)	Oct. 29, 2013	Mar. 09, 2012 USD ($)	May 31, 2014 USD ($)	Sep. 30, 2014 USD ($)	Dec. 31, 2008 USD ($)	Feb. 27, 2014 USD ($) item
Spectrum Investments
Dividend paid to DOC								$ 650,000
Dish Network
Spectrum Investments
Payment to acquire certain 700 MHz wireless licenses									$ 712,000
700 MHz Interim Build-Out Requirement (as a percent)								35.00%
700 MHz Final Build-Out Requirement (as a percent)								70.00%
Modified 700 MHz Interim Build-Out Requirement (as a percent)					40.00%
Modified 700 MHz Final Build-Out Requirement (as a percent)					70.00%
Accelerated period to meet Modified 700 MHz Build-Out Requirement on failure to meet Modified 700 MHz Interim Build-Out Requirement								1 year
Number of wireless spectrum licenses \| item		176
Dividend paid to DOC		$ 650,000
Dish Network \| Wireless Spectrum
Spectrum Investments
Accelerated period to meet Final Build-Out Requirement on failure to meet Interim Build-Out Requirement								1 year
Extension term of AWS-4 Final Build-Out Requirement			1 year
Number of wireless spectrum licenses \| item										176
Aggregate bid price										$ 1,564,000
Payment to meet H Block auction requirements				$ 328,000
Remaining balance amount due of H Block spectrum licenses				$ 1,236,000
H Block Interim Build-Out Requirement (as a percent)								40.00%
H Block Final Build-Out Requirement (as a percent)								75.00%
Accelerated period to meet Build-Out Requirement on failure								2 years
Dish Network \| Wireless Spectrum \| Subsequent event
Spectrum Investments
Number of other applicants qualified to participate in the AWS-3 auction \| item	69
Aggregate reserve price for licenses in the 1695-1710 MHz band	$ 580,000
Aggregate reserve price for paired licenses in the 1755-1780/2155-2180 MHz bands	$ 10,066,000
Dish Network \| Wireless Spectrum \| UTAM, Inc.
Spectrum Investments
Payment for clearance costs associated with the lower H Block spectrum							$ 13,000
Dish Network \| Wireless Spectrum \| Sprint
Spectrum Investments
Payment for clearance costs associated with the upper H Block spectrum							$ 95,000
Dish Network \| DBSD North America and TerreStar Transactions \| Wireless Spectrum
Spectrum Investments
Purchase price						$ 2,860,000
AWS-4 Interim Build-Out Requirement (as a percent)								40.00%
AWS-4 Final Build-Out Requirement (as a percent)								70.00%
Dish Network \| Networks Inc. Terrestal
Spectrum Investments
Percentage of equity acquired						100.00%

Commitments and Contingencies (Details 2) $ in Thousands							1 Months Ended			3 Months Ended			9 Months Ended		12 Months Ended
Commitments and Contingencies (Details 2) $ in Thousands	Jul. 25, 2014 item	Jul. 08, 2014 USD ($)	Dec. 23, 2013 USD ($)	Sep. 09, 2013 item	Oct. 11, 2012 USD ($)	Mar. 31, 2012 USD ($)	May 31, 2012	Jul. 31, 2009 item	Apr. 30, 2009 USD ($)	Sep. 30, 2014 USD ($) patent	Sep. 30, 2013 USD ($)	Mar. 31, 2013 USD ($)	Sep. 30, 2014 USD ($) item patent	Sep. 30, 2013 USD ($)	Dec. 31, 2012 USD ($)	Dec. 31, 2011 USD ($)	Dec. 31, 2008 USD ($)	Dec. 31, 2007 patent	Jun. 21, 2011 USD ($)	Dec. 31, 2010 USD ($)	Mar. 15, 2010 USD ($)
Loss contingencies
General and administrative expenses										$ 189,961	$ 172,100		$ 547,926	$ 502,974
Garnet Digital
Loss contingencies
Number of companies against whom similar complaints brought \| item				15
LightSquared transaction shareholder derivative actions
Loss contingencies
Number of shareholders who filed lawsuits \| item													5
Katz Communications-Patent infringement
Loss Contingency Terms
Number of patents the suit alleges infringement of \| patent																		19
Number of patents remain in the lawsuit \| patent										4			4
Number of reexamination petitions pending before patent and trademark office \| item													2
Satellite lease guarantees
Loss contingencies
Guarantees for payments										$ 10,000			$ 10,000
Guarantee term													P5M
Satellite transponder guarantees
Loss contingencies
Guarantees for payments										$ 327,000			$ 327,000
ESPN-Affiliation agreements
Loss contingencies
Claim amount									$ 30,000								$ 35,000
Court ruling																			$ 66,000		$ 66,000
Litigation accrual															$ 71,000					$ 42,000
Attorneys' fees					$ 5,000							$ 71,000				$ 24,000
General and administrative expenses															$ 5,000
Payment of accrued interest												$ 12,000
Technology Development Licensing
Loss Contingency Terms
Number of reexamination petitions pending before patent and trademark office \| item								2
Hopper litigation \| Maximum
Loss contingencies
Number of days to store HD primetime programs recordings							8 days
Norman IP Holdings
Loss contingencies
Minimum number of autonomous streamlined signal processors \| item													1
Personalized Media Communications, Inc. \| Minimum
Loss contingencies
Claim amount						$ 500,000
Personalized Media Communications, Inc. \| Maximum
Loss contingencies
Claim amount						$ 650,000
Do Not Call Litigation
Loss contingencies
Period of injunctive relief sought from placing any outbound telemarketing calls to market or promote its goods or services													5 years
Do Not Call Litigation \| DISH Network L.L.C.
Loss contingencies
Claim amount			$ 270,000
Lightsquared Harbinger Capital Partners LLC
Loss contingencies
Business days allowed to terminate existing agreements													3 days
Number of claims asserted by Jacksonville PFPF \| item	5
Lightsquared Harbinger Capital Partners LLC \| Mr. Ergen
Loss contingencies
Number of claims asserted by Jacksonville PFPF \| item	3
Lightsquared Harbinger Capital Partners LLC \| Director Defendants
Loss contingencies
Number of claims asserted by Jacksonville PFPF \| item	1
Lightsquared Harbinger Capital Partners LLC \| Minimum
Loss contingencies
Claim amount		$ 500,000

Related Party Transactions (Details 5) $ in Thousands				1 Months Ended		3 Months Ended		9 Months Ended
Related Party Transactions (Details 5) $ in Thousands	Aug. 01, 2014 USD ($)	Jul. 01, 2012	Apr. 29, 2011 USD ($) item	Jan. 31, 2012	Dec. 31, 2011 USD ($)	Sep. 30, 2014 USD ($)	Sep. 30, 2013 USD ($)	Sep. 30, 2014 USD ($)	Sep. 30, 2013 USD ($)	Sep. 30, 2010 USD ($)
Related Party Transactions
Cost of sales - equipment, services and other						$ 24,240	$ 24,073	$ 80,451	$ 64,789
DISH Digital Holding LLC
Related Party Transactions
Ownership percentage	90.00%	67.00%
Related party ownership interest in subsidiary (as a percent)	10.00%	33.00%
Voting interest (as a percent)	100.00%
Capital distribution, net of deferred taxes	$ 6,000
Deemed distribution, net of deferred taxes	$ 14,000
Exchange Agreement \| DISH Digital Holding LLC
Related Party Transactions
Non-voting interest (as a percent)	10.00%
EchoStar \| TiVo v. Dish Network and EchoStar Corporation
Related Party Transactions
Settlement amount			$ 500,000
Initial settlement amount paid			300,000
Aggregate of six annual installment amounts between 2012 and 2017, net of contribution from related party			$ 200,000
Litigation settlement number of annual installments \| item			6
Contribution from related party			$ 10,000
Percentage of litigation settlement amount to be made by related party annually			95.00%
EchoStar \| Receiver Agreement
Related Party Transactions
Notice period to exercise option to extend agreement								1 year
Notice period required to extend the agreement term				180 days
Minimum notice period for termination of agreement								60 days
Purchased set-top boxes and other equipment from EchoStar						293,000	341,000	$ 883,000	947,000
EchoStar \| Tax Sharing Agreement \| Dish Network
Related Party Transactions
Net amount of the allocated tax attributes payable							$ 83,000		83,000
EchoStar \| RUS Implementation Agreement
Related Party Transactions
Maximum grants receivable										$ 14,000
Cost of sales - equipment, services and other									$ 3,000
EchoStar \| Patent Cross-License Agreements \| Dish Network \| Maximum
Related Party Transactions
Payments to third party by related party					$ 10,000
Payments to third party by related party under extension option						$ 3,000		$ 3,000

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2014	Dec. 31, 2013
Current Assets:
Allowance for doubtful accounts on trade accounts receivable - other	$ 20,010	$ 15,981
Allowance for doubtful accounts on trade accounts receivable - EchoStar	$ 0	$ 0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized	1,000,000	1,000,000
Common stock, shares issued	1,015	1,015
Common stock, shares outstanding	1,015	1,015

Organization and Business Activities	9 Months Ended
Organization and Business Activities	Sep. 30, 2014
Organization and Business Activities
Organization and Business Activities	1. Organization and Business Activities *Principal Business* DISH DBS Corporation (which together with its subsidiaries is referred to as “DISH DBS,” the “Company,” “we,” “us” and/or “our” unless otherwise required by the context) is a holding company and an indirect, wholly-owned subsidiary of DISH Network Corporation (“DISH Network”). DISH DBS was formed under Colorado law in January 1996 and its common stock is held by DISH Orbital Corporation (“DOC”), a direct subsidiary of DISH Network. We operate the DISH® branded pay-TV service (“DISH”), which had 14.041 million subscribers in the United States as of September 30, 2014. The DISH branded pay-TV service consists of, among other things, Federal Communications Commission (“FCC”) licenses authorizing us to use direct broadcast satellite (“DBS”) and Fixed Satellite Service (“FSS”) spectrum, our owned and leased satellites, receiver systems, third-party broadcast operations, customer service facilities, a leased fiber network, in-home service and call center operations, and certain other assets utilized in our operations.

Financial Information for Subsidiary Guarantors	9 Months Ended
Financial Information for Subsidiary Guarantors	Sep. 30, 2014
Financial Information for Subsidiary Guarantors
Financial Information for Subsidiary Guarantors	9. Financial Information for Subsidiary Guarantors Our senior notes are fully, unconditionally and jointly and severally guaranteed by all of our subsidiaries other than minor subsidiaries and the stand-alone entity DISH DBS has no independent assets or operations. Therefore, supplemental financial information on a condensed consolidating basis of the guarantor subsidiaries is not required. There are no restrictions on our ability to obtain cash dividends or other distributions of funds from the guarantor subsidiaries, except those imposed by applicable law.

Organization and Business Activities (Details) item in Thousands	Sep. 30, 2014 item
Organization and Business Activities
Number of subscribers	14,041

Supplemental Data - Statements of Cash Flows (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013
Supplemental Disclosure of Cash Flow Information:
Cash paid for interest	$ 652,150	$ 662,264
Cash received for interest	26,242	26,771
Cash paid for income taxes	4,355	751
Cash paid for income taxes to DISH Network	322,632	274,894
Satellites and other assets financed under capital lease obligations	3,462	$ 904
Satellite and Tracking Stock Transaction \| EchoStar
Satellite and Tracking Stock Transaction with EchoStar:
Transfer of property and equipment, net	432,080
Investment in EchoStar and HSSC preferred tracking stock - cost method	316,204
Transfer of liabilities and other	44,540
Capital distribution to EchoStar	51,466
Deferred taxes for capital distribution to EchoStar	31,274
DISH Digital Exchange Transaction \| EchoStar
Satellite and Tracking Stock Transaction with EchoStar:
Transfer of property and equipment, net	8,978
Transfer of investments and intangibles, net	25,097
Capital distribution to EchoStar	5,845
Deferred taxes for capital distribution to EchoStar	3,542
Deemed distribution to EchoStar- initial fair value of redeemable noncontrolling interest, net of deferred taxes of $8,491	14,009
Deferred taxes for deemed distribution to EchoStar- initial fair value of redeemable noncontrolling interest	$ 8,491

Summary of Significant Accounting Policies (Details) - DISH Digital Holding LLC - Exchange Agreement	9 Months Ended
	Sep. 30, 2014	Aug. 01, 2014
Redeemable Noncontrolling Interests
Non-voting interest (as a percent)		10.00%
Maximum
Redeemable Noncontrolling Interests
Period following the fifth anniversary of exchange agreement within which non-voting interest is redeemable at fair value	60 days

Marketable Investment Securities, Restricted Cash and Cash Equivalents, and Other Investment Securities (Details 2) $ in Thousands		9 Months Ended
	Feb. 20, 2014 USD ($) item shares	Sep. 30, 2014 USD ($)
Transaction Agreement \| DISH Investors
Other investment securities:
Percentage of economic interest in the Hughes Retail Group	80.00%
EchoStar and HSSC \| Transaction Agreement
Other investment securities:
Number of owned satellites transferred and leased back \| item	5
Obligations and interest payments transferred	$ 59,000
Cash in exchange for shares of series of preferred tracking stock issued	11,000
Capital transaction	356,000
Capital transaction recorded in additional paid-in capital	$ 51,000
EchoStar and HSSC \| Investor Rights Agreement \| DISH Investors
Other investment securities:
Tracking stock prohibited transfer period	1 year
EchoStar \| Transaction Agreement
Other investment securities:
Obligations and interest payments transferred		$ 44,540
Historical cost of tracking stock		316,204
Capital transaction recorded in additional paid-in capital		$ 51,466
EchoStar \| Transaction Agreement \| DISH Investors
Other investment securities:
Preferred tracking stock issued by related party \| shares	6,290,499
Historical cost of tracking stock	$ 229,000
HSSC \| Transaction Agreement \| DISH Investors
Other investment securities:
Preferred tracking stock issued by related party \| shares	81.128
Historical cost of tracking stock	$ 87,000

Marketable Investment Securities, Restricted Cash and Cash Equivalents, and Other Investment Securities (Details 4) - USD ($) $ in Thousands	Sep. 30, 2014	Dec. 31, 2013
Fair value of marketable investment securities in a loss position
Total	$ 2,027,193	$ 2,040,282
Unrealized loss on marketable investment securities in a loss position
Total	(1,263)	(3,355)
Debt Securities
Fair value of marketable investment securities in a loss position
Less than 12 months	1,858,459	2,002,239
12 months or more	168,734	38,043
Unrealized loss on marketable investment securities in a loss position
Less than 12 months	(1,243)	(2,820)
12 months or more	$ (20)	$ (535)

Marketable Investment Securities, Restricted Cash and Cash Equivalents, and Other Investment Securities (Details 5) - USD ($) $ in Thousands	Sep. 30, 2014	Dec. 31, 2013
Fair value of marketable securities
Debt securities	$ 3,748,839	$ 4,117,326
Total marketable investment securities	3,823,033	4,181,228
Transfer of investments from Level 1 to Level 2	0
Transfer of investments from Level 2 to Level 1	0
VRDNs
Fair value of marketable securities
Debt securities	20,538	105,854
Other (including restricted)
Fair value of marketable securities
Debt security	3,759,837	4,048,851
Equity securities
Fair value of marketable securities
Equity securities	42,658	26,523
Fair value measurements on recurring basis \| Total
Fair value of marketable securities
Cash equivalents (including restricted)	4,183,698	3,743,328
Total marketable investment securities	3,823,033	4,181,228
Fair value measurements on recurring basis \| Total \| VRDNs
Fair value of marketable securities
Debt securities	20,538	105,854
Fair value measurements on recurring basis \| Total \| Other (including restricted)
Fair value of marketable securities
Debt security	3,759,837	4,048,851
Fair value measurements on recurring basis \| Total \| Equity securities
Fair value of marketable securities
Equity securities	42,658	26,523
Fair value measurements on recurring basis \| Level 1
Fair value of marketable securities
Cash equivalents (including restricted)	67,535	275,277
Total marketable investment securities	42,658	26,523
Fair value measurements on recurring basis \| Level 1 \| Equity securities
Fair value of marketable securities
Equity securities	42,658	26,523
Fair value measurements on recurring basis \| Level 2
Fair value of marketable securities
Cash equivalents (including restricted)	4,116,163	3,468,051
Total marketable investment securities	3,780,375	4,154,705
Fair value measurements on recurring basis \| Level 2 \| VRDNs
Fair value of marketable securities
Debt securities	20,538	105,854
Fair value measurements on recurring basis \| Level 2 \| Other (including restricted)
Fair value of marketable securities
Debt security	$ 3,759,837	$ 4,048,851

Inventory (Details) - USD ($) $ in Thousands	Sep. 30, 2014	Dec. 31, 2013
Inventory
Finished goods	$ 280,369	$ 299,975
Raw materials	159,210	102,563
Work-in-process	88,237	110,108
Total inventory	$ 527,816	$ 512,646

Property and Equipment and FCC Authorizations (Details 2) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2014 USD ($) item	Sep. 30, 2013 USD ($)	Sep. 30, 2014 USD ($) item	Sep. 30, 2013 USD ($)
Depreciation and amortization expense
Depreciation and amortization expense \| $	$ 246,140	$ 229,749	$ 719,488	$ 663,410
Equipment leased to customers
Depreciation and amortization expense
Depreciation and amortization expense \| $	208,208	188,524	607,584	538,457
Satellites
Depreciation and amortization expense
Depreciation and amortization expense \| $	15,261	27,171	53,723	81,512
Buildings, furniture, fixtures, equipment and other
Depreciation and amortization expense
Depreciation and amortization expense \| $	$ 22,671	$ 14,054	$ 58,181	$ 43,441
Pay-TV Satellites
Depreciation and amortization expense
Number of satellites utilized in geostationary orbit approximately 22,300 miles above the equator \| item			14
Owned Satellites \| item	1		1
Number of satellites utilized under operating lease \| item			11
Number of satellites utilized under capital lease \| item			2

Property and Equipment and FCC Authorizations (Details 3) $ in Millions	9 Months Ended
	Sep. 30, 2014 USD ($) item
Property and Equipment and FCC Authorizations
Number of geographical license areas	214
MVDDS Licenses
Property and Equipment and FCC Authorizations
Number of geographical license areas	82
Additional license term	4 years
Maximum \| MVDDS Licenses
Property and Equipment and FCC Authorizations
Amount of carrying value to be written-off on termination of license \| $	$ 24
EchoStar XV
Property and Equipment and FCC Authorizations
Estimate Useful life of assets	15 years
EchoStar XVIII
Property and Equipment and FCC Authorizations
Estimate Useful life of assets	15 years

Long-Term Debt (Details) - USD ($) $ in Thousands	Oct. 01, 2014	Feb. 20, 2014	Sep. 30, 2014	Dec. 31, 2013
Long-term debt
Carrying Value			$ 13,164,893	$ 13,409,313
Fair Value			13,655,890	14,025,557
Unamortized discounts, net			(16,142)	(19,198)
Capital lease obligations			201,867	219,902
Total long-term debt and capital lease obligations (including current portion)			13,350,618	13,610,017
6 5/8% Senior Notes due 2014
Long-term debt
Carrying Value			900,000	1,000,000
Fair Value			$ 900,000	$ 1,040,200
Interest rate (as a percent)			6.625%	6.625%
Debt repurchased			$ 100,000
6 5/8% Senior Notes due 2014 \| Subsequent event
Long-term debt
Principal balance of debt redeemed	$ 900,000
7 3/4% Senior Notes due 2015
Long-term debt
Carrying Value			650,001	$ 750,000
Fair Value			$ 673,564	$ 813,750
Interest rate (as a percent)			7.75%	7.75%
Debt repurchased			$ 100,000
Principal balance reclassified to current portion of long-term debt and capital lease obligations			650,000
7 1/8% Senior Notes due 2016
Long-term debt
Carrying Value			1,500,000	$ 1,500,000
Fair Value			$ 1,591,875	$ 1,657,500
Interest rate (as a percent)			7.125%	7.125%
4 5/8% Senior Notes due 2017
Long-term debt
Carrying Value			$ 900,000	$ 900,000
Fair Value			$ 918,099	$ 946,962
Interest rate (as a percent)			4.625%	4.625%
4 1/4% Senior Notes due 2018
Long-term debt
Carrying Value			$ 1,200,000	$ 1,200,000
Fair Value			$ 1,207,200	$ 1,221,792
Interest rate (as a percent)			4.25%	4.25%
7 7/8% Senior Notes due 2019
Long-term debt
Carrying Value			$ 1,400,000	$ 1,400,000
Fair Value			$ 1,589,000	$ 1,603,000
Interest rate (as a percent)			7.875%	7.875%
5 1/8% Senior Notes due 2020
Long-term debt
Carrying Value			$ 1,100,000	$ 1,100,000
Fair Value			$ 1,127,500	$ 1,104,950
Interest rate (as a percent)			5.125%	5.125%
6 3/4% Senior Notes due 2021
Long-term debt
Carrying Value			$ 2,000,000	$ 2,000,000
Fair Value			$ 2,146,260	$ 2,122,500
Interest rate (as a percent)			6.75%	6.75%
5 7/8% Senior Notes due 2022
Long-term debt
Carrying Value			$ 2,000,000	$ 2,000,000
Fair Value			$ 2,040,000	$ 1,997,500
Interest rate (as a percent)			5.875%	5.875%
5% Senior Notes due 2023
Long-term debt
Carrying Value			$ 1,500,000	$ 1,500,000
Fair Value			$ 1,447,500	$ 1,458,090
Interest rate (as a percent)			5.00%	5.00%
Mortgages and other notes payable
Long-term debt
Carrying Value			$ 14,892	$ 59,313
Fair Value			$ 14,892	$ 59,313
Mortgages and other notes payable \| Transaction Agreement
Long-term debt
Decrease in mortgages and other notes payable		$ 44,000

Related Party Transactions (Details) $ in Thousands			3 Months Ended		9 Months Ended
Related Party Transactions (Details) $ in Thousands	Oct. 14, 2014 USD ($)	Mar. 28, 2014 USD ($) item	Sep. 30, 2014 USD ($)	Sep. 30, 2013 USD ($)	Sep. 30, 2014 USD ($)	Sep. 30, 2013 USD ($)
Related Party Transactions with DISH Network
Dividend paid to DOC					$ 650,000
Subscriber-related expenses			$ 2,072,891	$ 1,938,142	6,131,068	$ 5,718,781
Subscriber-related revenue			3,553,828	3,408,510	10,582,989	10,131,098
Expenses associated with services			3,000	3,000	8,000	7,000
Dish Network
Related Party Transactions with DISH Network
Dividend paid to DOC		$ 650,000
Number of wireless spectrum licenses \| item		176
Subscriber-related revenue			$ 5,000	5,000	$ 14,000	11,000
Dish Network \| Subsequent event
Related Party Transactions with DISH Network
Dividend paid to DOC	$ 1,500,000
Blockbuster, Inc.
Related Party Transactions with DISH Network
Subscriber-related expenses				$ 3,000		$ 11,000

Related Party Transactions (Details 2) - EchoStar $ in Millions		1 Months Ended	3 Months Ended		9 Months Ended		12 Months Ended
	Jan. 02, 2014	May 31, 2013	Sep. 30, 2014 USD ($)	Sep. 30, 2013 USD ($)	Sep. 30, 2014 USD ($)	Sep. 30, 2013 USD ($)	Dec. 31, 2012 item
Related Party Transactions
Satellite and transmission expenses \| $			$ 169	$ 130	$ 476	$ 365
Remanufactured Receiver Agreement \| Minimum
Related Party Transactions
Minimum required notice period for termination of agreement by related party					60 days
Professional Services Agreement \| Dish Network
Related Party Transactions
Agreement term	1 year
Automatic renewal period					1 year
Minimum notice period for termination of agreement					60 days
Minimum notice period for termination of a specific service					30 days
EchoStar XV
Related Party Transactions
Notice period for termination of agreement		30 days
El Paso Lease Agreement \| Dish Network
Related Party Transactions
Number of consecutive three year renewal options \| item							4
Term of renewal option							3 years

Related Party Transactions (Details 3) $ in Millions			1 Months Ended			3 Months Ended			9 Months Ended		12 Months Ended
Related Party Transactions (Details 3) $ in Millions	Dec. 21, 2012	Jan. 02, 2012	May 31, 2013	May 31, 2012	May 31, 2010	Sep. 30, 2014 USD ($)	Sep. 30, 2013 USD ($)	Sep. 30, 2012 transponder	Sep. 30, 2014 USD ($)	Sep. 30, 2013 USD ($)	Dec. 31, 2009 transponder	Dec. 31, 2008 transponder
EchoStar XVI
Related Party Transactions
Notice period to exercise option to extend agreement									6 years
EchoStar
Related Party Transactions
General and administrative expenses \| $						$ 25	$ 17		$ 74	$ 50
EchoStar \| Prior Broadcast Agreement \| Minimum
Related Party Transactions
Required notice period for termination by the reporting entity		60 days
EchoStar \| Certain Sports Related Programming Broadcast Agreement
Related Party Transactions
Agreement term					10 years
EchoStar \| EchoStar VIII
Related Party Transactions
Notice period for termination of agreement			30 days
EchoStar \| EchoStar XVI
Related Party Transactions
Agreement term from commencement of service date	4 years										10 years
Notice period to exercise option to extend agreement									6 years
Additional term of renewal option									5 years
EchoStar \| DISH Nimiq 5 Agreement
Related Party Transactions
Agreement term											10 years
Agreement term with third party											15 years
Number of DBS transponders available to receive services											32
Number of DBS transponders currently used											32
EchoStar \| QuetzSat-1 Lease Agreement
Related Party Transactions
Agreement term with third party												10 years
Number of DBS transponders currently used												32
Number of DBS transponders expected to receive services												24
Number of transponders subleased								5
EchoStar \| 103 degree orbital location member
Related Party Transactions
Agreement term				10 years
EchoStar \| TT&C Agreement
Related Party Transactions
Required notice period for termination by the reporting entity									60 days

Related Party Transactions (Details 4) - EchoStar			9 Months Ended
Related Party Transactions (Details 4) - EchoStar	Feb. 23, 2010	Jan. 02, 2010	Sep. 30, 2014
Product Support Agreement \| Minimum
Related Party Transactions
Required notice period for termination by the reporting entity			60 days
Inverness Lease Agreement
Related Party Transactions
Required notice period for termination of agreement			6 months
Santa Fe Lease Agreement
Related Party Transactions
Notice period to exercise option to extend agreement			1 year
DISH Online.com Services Agreement
Related Party Transactions
Term of renewal option exercised			1 year
Agreement term		2 years
DISH Online.com Services Agreement \| Minimum
Related Party Transactions
Required notice period for termination by the reporting entity			120 days
DISH Remote Access Services Agreement
Related Party Transactions
Agreement term	5 years
Automatic renewal period			1 year
DISH Remote Access Services Agreement \| Minimum
Related Party Transactions
Required notice period for termination by the reporting entity			120 days
Sling Service Services Agreement
Related Party Transactions
Agreement term	5 years
Automatic renewal period			1 year
Sling Service Services Agreement \| Minimum
Related Party Transactions
Required notice period for termination by the reporting entity			120 days
Application Development Agreement
Related Party Transactions
Minimum notice period for termination of agreement			90 days
Automatic renewal period			1 year
XiP Encryption Agreement
Related Party Transactions
Notice period to exercise option to extend agreement			1 year
Minimum notice period for termination of agreement			30 days
Notice period required to extend the agreement term			180 days
XiP Encryption Agreement \| Minimum
Related Party Transactions
Required notice period for termination of agreement			180 days