Company Quick10K Filing
Quick10K
Dish DBS
10-Q 2019-06-30 Quarter: 2019-06-30
10-Q 2019-03-31 Quarter: 2019-03-31
10-K 2018-12-31 Annual: 2018-12-31
10-Q 2018-09-30 Quarter: 2018-09-30
10-Q 2018-06-30 Quarter: 2018-06-30
10-Q 2018-03-31 Quarter: 2018-03-31
10-K 2017-12-31 Annual: 2017-12-31
10-Q 2017-09-30 Quarter: 2017-09-30
10-Q 2017-06-30 Quarter: 2017-06-30
10-Q 2017-03-31 Quarter: 2017-03-31
10-K 2016-12-31 Annual: 2016-12-31
10-Q 2016-09-30 Quarter: 2016-09-30
10-Q 2016-06-30 Quarter: 2016-06-30
10-Q 2016-03-31 Quarter: 2016-03-31
10-K 2015-12-31 Annual: 2015-12-31
10-Q 2015-09-30 Quarter: 2015-09-30
10-Q 2015-06-30 Quarter: 2015-06-30
10-Q 2015-03-31 Quarter: 2015-03-31
10-K 2014-12-31 Annual: 2014-12-31
10-Q 2014-09-30 Quarter: 2014-09-30
10-Q 2014-06-30 Quarter: 2014-06-30
10-Q 2014-03-31 Quarter: 2014-03-31
10-K 2013-12-31 Annual: 2013-12-31
8-K 2019-07-02 Officers, Exhibits
8-K 2018-08-21 Officers
8-K 2018-06-07 Enter Agreement
8-K 2018-03-31 Enter Agreement, Leave Agreement, Other Events
ABQQ AB International Group 1,501
DBA Invesco DB Agriculture Fund 412
ISBA Isabella Bank 213
MOBQ Mobiquity Technologies 61
VYEY Victory Oilfield Tech 53
PRHR Petroshare 38
AREC American Resources 18
NWCN Network Cn 4
FASV Century Cobalt 3
DMCI Diamond Cartel 0
DDBS 2019-06-30
Part I - Financial Information
Item 1. Financial Statements
Item 2.Management's Narrative Analysis of Results of Operations
Item 4.Controls and Procedures
Part II - Other Information
Item 1.Legal Proceedings
Item 1A. Risk Factors
Item 1A, "Risk Factors," of Our Annual Report on Form 10-K for The Year Ended December 31, 2018 Include A Detailed Discussion of Our Risk Factors.
Item 6.Exhibits
EX-31.1 ddbs-20190630ex311488cdf.htm
EX-31.2 ddbs-20190630ex31284dbe7.htm
EX-32.1 ddbs-20190630ex321548432.htm
EX-32.2 ddbs-20190630ex322c43f6c.htm

Dish DBS Earnings 2019-06-30

DDBS 10Q Quarterly Report

Balance SheetIncome StatementCash Flow

P5YP1YP1YP2YP1YP1YP1YP2Yfalse--12-31Q220190001042642101510150.051250.051250.06750.06750.058750.058750.058750.058750.07750.07750.051250.051250.078750.078750.078750.078750P1YP12YP1YP12YP1YP1Y0001042642us-gaap:RetainedEarningsMember2019-06-300001042642us-gaap:AdditionalPaidInCapitalMember2019-06-300001042642us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-06-300001042642us-gaap:RetainedEarningsMember2019-03-310001042642us-gaap:NoncontrollingInterestMember2019-03-310001042642us-gaap:AdditionalPaidInCapitalMember2019-03-310001042642us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-03-3100010426422019-03-310001042642us-gaap:RetainedEarningsMember2018-12-310001042642us-gaap:NoncontrollingInterestMember2018-12-310001042642us-gaap:AdditionalPaidInCapitalMember2018-12-310001042642us-gaap:AccumulatedOtherComprehensiveIncomeMember2018-12-310001042642us-gaap:RetainedEarningsMember2018-06-300001042642us-gaap:NoncontrollingInterestMember2018-06-300001042642us-gaap:AdditionalPaidInCapitalMember2018-06-300001042642us-gaap:AccumulatedOtherComprehensiveIncomeMember2018-06-300001042642us-gaap:RetainedEarningsMember2018-03-310001042642us-gaap:NoncontrollingInterestMember2018-03-310001042642us-gaap:AdditionalPaidInCapitalMember2018-03-310001042642us-gaap:AccumulatedOtherComprehensiveIncomeMember2018-03-3100010426422018-03-310001042642us-gaap:RetainedEarningsMember2017-12-310001042642us-gaap:NoncontrollingInterestMember2017-12-310001042642us-gaap:AdditionalPaidInCapitalMember2017-12-310001042642us-gaap:AccumulatedOtherComprehensiveIncomeMember2017-12-310001042642ddbs:DishMexicoMember2019-01-012019-06-300001042642ddbs:SubscriberRelatedMember2019-04-012019-06-300001042642ddbs:SubscriberRelatedMember2019-01-012019-06-300001042642ddbs:SubscriberRelatedMember2018-04-012018-06-300001042642ddbs:SubscriberRelatedMember2018-01-012018-06-300001042642ddbs:UplinkServicesMemberddbs:DishMexicoMember2019-04-012019-06-300001042642ddbs:UplinkServicesMemberddbs:DishMexicoMember2019-01-012019-06-300001042642ddbs:UplinkServicesMemberddbs:DishMexicoMember2018-04-012018-06-300001042642ddbs:DigitalReceiversAndRelatedComponentsMemberddbs:DishMexicoMember2018-04-012018-06-300001042642ddbs:UplinkServicesMemberddbs:DishMexicoMember2018-01-012018-06-300001042642ddbs:DigitalReceiversAndRelatedComponentsMemberddbs:DishMexicoMember2018-01-012018-06-300001042642ddbs:PayTvVideoAndRelatedServicesMember2019-04-012019-06-300001042642ddbs:EquipmentSalesAndOtherMember2019-04-012019-06-300001042642ddbs:CanadaAndMexicoMember2019-04-012019-06-300001042642country:US2019-04-012019-06-300001042642ddbs:PayTvVideoAndRelatedServicesMember2019-01-012019-06-300001042642ddbs:EquipmentSalesAndOtherMember2019-01-012019-06-300001042642ddbs:CanadaAndMexicoMember2019-01-012019-06-300001042642country:US2019-01-012019-06-300001042642ddbs:PayTvVideoAndRelatedServicesMember2018-04-012018-06-300001042642ddbs:EquipmentSalesAndOtherMember2018-04-012018-06-300001042642ddbs:CanadaAndMexicoMember2018-04-012018-06-300001042642country:US2018-04-012018-06-300001042642ddbs:PayTvVideoAndRelatedServicesMember2018-01-012018-06-300001042642ddbs:EquipmentSalesAndOtherMember2018-01-012018-06-300001042642ddbs:CanadaAndMexicoMember2018-01-012018-06-300001042642country:US2018-01-012018-06-300001042642ddbs:NagraStarLLCMember2019-04-012019-06-300001042642ddbs:AdministrativeSupportServicesAgreementMember2019-04-012019-06-300001042642ddbs:NagraStarLLCMember2019-01-012019-06-300001042642ddbs:AdministrativeSupportServicesAgreementMember2019-01-012019-06-300001042642ddbs:NagraStarLLCMember2018-04-012018-06-300001042642ddbs:AdministrativeSupportServicesAgreementMember2018-04-012018-06-300001042642ddbs:NagraStarLLCMember2018-01-012018-06-300001042642ddbs:AdministrativeSupportServicesAgreementMember2018-01-012018-06-300001042642srt:MinimumMemberus-gaap:EquipmentLeasedToOtherPartyMember2019-01-012019-06-300001042642srt:MinimumMemberus-gaap:BuildingAndBuildingImprovementsMember2019-01-012019-06-300001042642srt:MinimumMemberddbs:SatellitesAcquiredUnderFinanceLeaseAgreementsMember2019-01-012019-06-300001042642srt:MinimumMemberddbs:FurnitureFixturesEquipmentAndOtherMember2019-01-012019-06-300001042642srt:MaximumMemberus-gaap:EquipmentLeasedToOtherPartyMember2019-01-012019-06-300001042642srt:MaximumMemberus-gaap:BuildingAndBuildingImprovementsMember2019-01-012019-06-300001042642srt:MaximumMemberddbs:SatellitesAcquiredUnderFinanceLeaseAgreementsMember2019-01-012019-06-300001042642srt:MaximumMemberddbs:FurnitureFixturesEquipmentAndOtherMember2019-01-012019-06-300001042642ddbs:EchoStarXVMember2019-01-012019-06-300001042642ddbs:EchostarXVIIIMember2019-01-012019-06-300001042642ddbs:AssetsUnderConstructionEchoStarXVIIIMember2019-01-012019-06-300001042642us-gaap:LandMember2019-06-300001042642us-gaap:EquipmentLeasedToOtherPartyMember2019-06-300001042642us-gaap:ConstructionInProgressMember2019-06-300001042642us-gaap:BuildingAndBuildingImprovementsMember2019-06-300001042642ddbs:SatellitesAcquiredUnderFinanceLeaseAgreementsMember2019-06-300001042642ddbs:FurnitureFixturesEquipmentAndOtherMember2019-06-300001042642ddbs:EchoStarXVMember2019-06-300001042642ddbs:EchostarXVIIIMember2019-06-300001042642us-gaap:LandMember2018-12-310001042642us-gaap:EquipmentLeasedToOtherPartyMember2018-12-310001042642us-gaap:ConstructionInProgressMember2018-12-310001042642us-gaap:BuildingAndBuildingImprovementsMember2018-12-310001042642ddbs:SatellitesAcquiredUnderFinanceLeaseAgreementsMember2018-12-310001042642ddbs:FurnitureFixturesEquipmentAndOtherMember2018-12-310001042642ddbs:EchoStarXVMember2018-12-3100010426422008-01-012018-12-3100010426422018-01-012018-12-3100010426422008-01-012019-06-3000010426422015-02-112015-02-120001042642us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-04-012019-06-300001042642us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-01-012019-03-310001042642us-gaap:AccumulatedOtherComprehensiveIncomeMember2018-04-012018-06-300001042642us-gaap:AccumulatedOtherComprehensiveIncomeMember2018-01-012018-03-310001042642us-gaap:VariableInterestEntityPrimaryBeneficiaryMember2019-06-300001042642us-gaap:VariableInterestEntityPrimaryBeneficiaryMember2018-12-310001042642us-gaap:RetainedEarningsMember2019-04-012019-06-300001042642us-gaap:RetainedEarningsMember2019-01-012019-03-310001042642us-gaap:RetainedEarningsMember2018-04-012018-06-300001042642ddbs:OtherDebtAndEquitySecuritiesMember2019-06-300001042642ddbs:OtherDebtAndEquitySecuritiesMember2018-12-310001042642srt:SubsidiariesMemberstpr:OHddbs:TelemarketingLitigationMember2019-01-012019-06-300001042642srt:SubsidiariesMemberstpr:CAddbs:TelemarketingLitigationMember2019-01-012019-06-300001042642ddbs:TurnerNetworkSalesInc.Member2017-10-062017-10-060001042642ddbs:OtherAccruedExpensesMember2017-05-222017-05-220001042642ddbs:VermontNationalTelephoneCompanyMembersrt:MinimumMemberddbs:Aws3AuctionMemberddbs:NorthstarWirelessOrNorthstarSpectrumMember2016-09-232016-09-230001042642ddbs:VermontNationalTelephoneCompanyMembersrt:MaximumMemberddbs:Aws3AuctionMemberddbs:NorthstarWirelessOrNorthstarSpectrumMember2016-09-232016-09-230001042642srt:SubsidiariesMemberddbs:TelemarketingLitigationMember2013-12-232013-12-230001042642ddbs:OtherAccruedExpensesMemberddbs:TelemarketingLitigationMember2019-06-300001042642ddbs:OtherAccruedExpensesMemberddbs:KrakauerActionMember2019-06-300001042642ddbs:OtherAccruedExpensesMemberddbs:TelemarketingLitigationMember2018-12-310001042642ddbs:OtherAccruedExpensesMemberddbs:KrakauerActionMember2018-12-310001042642ddbs:TelemarketingLitigationMember2017-06-050001042642ddbs:DishNetworkMember2019-05-142019-05-140001042642ddbs:TelemarketingLitigationMember2017-04-012017-06-300001042642ddbs:OtherAccruedExpensesMember2017-04-012017-06-300001042642ddbs:KrakauerActionMember2016-10-012016-12-310001042642ddbs:TelemarketingLitigationMember2016-01-012016-12-310001042642ddbs:TelemarketingLitigationMember2018-04-052018-04-050001042642srt:MinimumMember2019-06-300001042642srt:MaximumMember2019-06-300001042642ddbs:SatelliteTransponderGuaranteesMember2019-06-300001042642ddbs:NagrastarLlcMember2017-02-280001042642us-gaap:EquipmentLeasedToOtherPartyMember2019-04-012019-06-300001042642ddbs:SatellitesMember2019-04-012019-06-300001042642ddbs:BuildingFurnitureFixturesOtherEquipmentMember2019-04-012019-06-300001042642us-gaap:EquipmentLeasedToOtherPartyMember2019-01-012019-06-300001042642ddbs:SatellitesMember2019-01-012019-06-300001042642ddbs:BuildingFurnitureFixturesOtherEquipmentMember2019-01-012019-06-300001042642us-gaap:EquipmentLeasedToOtherPartyMember2018-04-012018-06-300001042642ddbs:SatellitesMember2018-04-012018-06-300001042642ddbs:BuildingFurnitureFixturesOtherEquipmentMember2018-04-012018-06-300001042642us-gaap:EquipmentLeasedToOtherPartyMember2018-01-012018-06-300001042642ddbs:SatellitesMember2018-01-012018-06-300001042642ddbs:BuildingFurnitureFixturesOtherEquipmentMember2018-01-012018-06-300001042642ddbs:SeniorNotes7.875PercentDue2019Member2019-06-300001042642ddbs:SeniorNotes7.75PercentDue2026Member2019-06-300001042642ddbs:SeniorNotes6.750PercentDue2021Member2019-06-300001042642ddbs:SeniorNotes5PercentDue2023Member2019-06-300001042642ddbs:SeniorNotes5.875PercentDue2024Member2019-06-300001042642ddbs:SeniorNotes5.875PercentDue2022Member2019-06-300001042642ddbs:SeniorNotes5.125PercentDue2020Member2019-06-300001042642ddbs:OtherNotesPayableMember2019-06-300001042642ddbs:SeniorNotes7.875PercentDue2019Member2018-12-310001042642ddbs:SeniorNotes7.75PercentDue2026Member2018-12-310001042642ddbs:SeniorNotes6.750PercentDue2021Member2018-12-310001042642ddbs:SeniorNotes5PercentDue2023Member2018-12-310001042642ddbs:SeniorNotes5.875PercentDue2024Member2018-12-310001042642ddbs:SeniorNotes5.875PercentDue2022Member2018-12-310001042642ddbs:SeniorNotes5.125PercentDue2020Member2018-12-310001042642ddbs:OtherNotesPayableMember2018-12-310001042642us-gaap:RetainedEarningsMember2018-01-012018-03-3100010426422018-06-3000010426422017-12-310001042642us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2019-06-300001042642us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2019-06-300001042642us-gaap:FairValueMeasurementsRecurringMember2019-06-300001042642us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2018-12-310001042642us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2018-12-310001042642us-gaap:FairValueMeasurementsRecurringMember2018-12-310001042642ddbs:NtmMemberus-gaap:SubsequentEventMember2019-07-262019-07-260001042642us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateDebtSecuritiesMember2019-06-300001042642us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CommercialPaperNotIncludedWithCashAndCashEquivalentsMember2019-06-300001042642us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberddbs:OtherDebtSecuritiesNonrestrictedAndRestrictedMember2019-06-300001042642us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USTreasuryAndGovernmentMember2019-06-300001042642us-gaap:FairValueMeasurementsRecurringMemberus-gaap:USTreasuryAndGovernmentMember2019-06-300001042642us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateDebtSecuritiesMember2019-06-300001042642us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CommercialPaperNotIncludedWithCashAndCashEquivalentsMember2019-06-300001042642us-gaap:FairValueMeasurementsRecurringMemberddbs:OtherDebtSecuritiesNonrestrictedAndRestrictedMember2019-06-300001042642us-gaap:CommercialPaperNotIncludedWithCashAndCashEquivalentsMember2019-06-300001042642ddbs:OtherDebtSecuritiesNonrestrictedAndRestrictedMember2019-06-300001042642us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateDebtSecuritiesMember2018-12-310001042642us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CommercialPaperNotIncludedWithCashAndCashEquivalentsMember2018-12-310001042642us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberddbs:OtherDebtSecuritiesNonrestrictedAndRestrictedMember2018-12-310001042642us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USTreasuryAndGovernmentMember2018-12-310001042642us-gaap:FairValueMeasurementsRecurringMemberus-gaap:USTreasuryAndGovernmentMember2018-12-310001042642us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateDebtSecuritiesMember2018-12-310001042642us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CommercialPaperNotIncludedWithCashAndCashEquivalentsMember2018-12-310001042642us-gaap:FairValueMeasurementsRecurringMemberddbs:OtherDebtSecuritiesNonrestrictedAndRestrictedMember2018-12-310001042642us-gaap:CommercialPaperNotIncludedWithCashAndCashEquivalentsMember2018-12-310001042642ddbs:OtherDebtSecuritiesNonrestrictedAndRestrictedMember2018-12-310001042642us-gaap:USTreasuryAndGovernmentMember2019-06-300001042642us-gaap:CorporateDebtSecuritiesMember2019-06-300001042642us-gaap:USTreasuryAndGovernmentMember2018-12-310001042642us-gaap:CorporateDebtSecuritiesMember2018-12-310001042642us-gaap:AdditionalPaidInCapitalMember2019-01-012019-03-310001042642us-gaap:AdditionalPaidInCapitalMember2018-04-012018-06-300001042642us-gaap:AdditionalPaidInCapitalMember2018-01-012018-03-310001042642us-gaap:EquipmentMember2019-06-300001042642ddbs:DishMexicoMember2019-06-300001042642ddbs:DishMexicoMember2018-12-310001042642ddbs:EchoStarMember2019-06-300001042642ddbs:EchoStarMember2018-12-3100010426422019-08-1200010426422017-06-052017-06-050001042642ddbs:EchostarXVIIISatelliteMember2019-04-012019-06-300001042642ddbs:EchostarXVIIISatelliteMember2019-01-012019-06-300001042642ddbs:EchostarXVIIISatelliteMember2018-04-012018-06-300001042642ddbs:EchostarXVIIISatelliteMember2018-01-012018-06-300001042642ddbs:EchoStarMemberddbs:DISHNimiq5AgreementMember2009-12-310001042642ddbs:EchoStarMemberddbs:QuetzSat1LeaseAgreementMember2013-01-012013-03-310001042642ddbs:EchoStarMemberddbs:TelesatTransponderAgreementMember2009-12-310001042642ddbs:EchoStarMemberddbs:QuetzSat1LeaseAgreementMember2008-12-310001042642ddbs:EchoStarMemberddbs:TelesatTransponderAgreementMember2009-01-012009-12-310001042642ddbs:EchoStarMemberddbs:QuetzSat1LeaseAgreementMember2008-01-012008-12-310001042642ddbs:EchoStarMemberddbs:CollocationAndAntennaSpaceAgreementsMember2017-03-012017-03-010001042642ddbs:OneHundredInvernessLeaseAgreementMember2017-03-012017-03-010001042642ddbs:EchoStarMemberddbs:TelemetryTrackingAndControlAgreementMember2012-01-012012-01-020001042642ddbs:EchoStarMemberddbs:EchoStarXVIMember2012-12-202012-12-210001042642ddbs:RoviLicenseAgreementMember2016-08-012016-08-160001042642ddbs:EchoStarMemberddbs:OneHundredThreeDegreeOrbitalLocationMember2012-05-012012-05-310001042642ddbs:EchoStarMemberddbs:DISHNimiq5AgreementMember2009-01-012009-12-310001042642us-gaap:MajorityShareholderMemberddbs:HughesNetworkSystemsMemberddbs:CollocationAndAntennaSpaceAgreementsMember2017-08-012017-08-310001042642us-gaap:MajorityShareholderMemberddbs:EchoStarMemberddbs:AmericanForkOccupancyLicenseAgreementMember2017-06-012017-06-300001042642ddbs:EchoStarXVIMember2012-12-202012-12-210001042642ddbs:DishNetworkMemberddbs:HughesNetworkSystemsMemberddbs:CollocationAndAntennaSpaceAgreementsMember2017-08-012017-08-310001042642us-gaap:MajorityShareholderMemberddbs:EchoStarMemberddbs:InvernessLeaseAgreementMember2017-03-012017-03-010001042642us-gaap:MajorityShareholderMemberddbs:EchoStarMemberddbs:ElPasoFeLeaseAgreementMember2012-01-012012-01-310001042642us-gaap:MajorityShareholderMemberddbs:EchoStarMemberddbs:GilbertLeaseAgreementMember2017-03-012017-03-010001042642us-gaap:MajorityShareholderMemberddbs:EchoStarMemberddbs:CheyenneLeaseAgreementMember2017-03-012017-03-010001042642ddbs:HughesBroadbandSalesAgencyAgreementMember2017-03-012017-03-310001042642us-gaap:MajorityShareholderMemberddbs:EchoStarMemberddbs:ProfessionalServicesAgreementMember2009-01-012009-12-310001042642ddbs:SantaFeLeaseAgreementMember2019-01-012019-06-300001042642ddbs:MeridianLeaseAgreementMember2019-01-012019-06-300001042642ddbs:EchoStarMemberddbs:EchoStarXVIMember2017-05-012017-05-310001042642ddbs:EchoStarMemberddbs:EchoStarXVIMember2016-07-012016-07-310001042642ddbs:EchoStarMemberddbs:EchoStarXVIMember2012-12-212012-12-210001042642us-gaap:MajorityShareholderMembersrt:MaximumMemberddbs:EchoStarMemberddbs:PatentCrossLicenseAgreementsMember2011-12-012011-12-310001042642us-gaap:MajorityShareholderMembersrt:MaximumMemberddbs:EchoStarMemberddbs:PatentCrossLicenseAgreementsMember2011-01-012011-12-310001042642ddbs:DishNetworkSpectrumInvestmentsMember2019-01-012019-06-300001042642srt:MinimumMemberddbs:DishNetworkSpectrumInvestmentsMember2019-01-012019-06-300001042642srt:MaximumMemberddbs:DishNetworkSpectrumInvestmentsMember2019-01-012019-06-300001042642ddbs:TelemarketingLitigationMember2019-01-012019-06-300001042642ddbs:TelemarketingLitigationMember2016-10-032016-10-030001042642ddbs:RoviLicenseAgreementMember2019-01-012019-06-300001042642ddbs:EchoStarXVIMember2019-01-012019-06-300001042642ddbs:SlingTvSubscribersMember2019-06-300001042642ddbs:PayTvSubscribersMember2019-06-300001042642ddbs:DishTvSubscribersMember2019-06-300001042642ddbs:PayTVSatellitesMember2019-06-300001042642ddbs:PayTVSatellitesMember2019-01-012019-06-300001042642ddbs:TelemetryTrackingAndControlAgreementMember2012-01-012012-01-020001042642us-gaap:NoncontrollingInterestMember2019-01-012019-03-3100010426422019-01-012019-03-310001042642us-gaap:NoncontrollingInterestMember2018-04-012018-06-300001042642us-gaap:NoncontrollingInterestMember2018-01-012018-03-3100010426422018-01-012018-03-3100010426422019-05-140001042642ddbs:VermontNationalTelephoneCompanyMemberddbs:Aws3AuctionMemberddbs:NorthstarWirelessOrNorthstarSpectrumMember2016-09-232016-09-230001042642srt:MaximumMemberddbs:TelemarketingLitigationMember2016-01-012016-12-310001042642srt:MaximumMemberddbs:TelemarketingLitigationMember2016-01-192016-02-110001042642ddbs:DoNotCallLitigationMember2019-01-012019-06-300001042642srt:MaximumMember2019-01-012019-06-300001042642srt:SubsidiariesMemberddbs:TelemarketingLitigationMember2019-01-012019-06-300001042642ddbs:EchoStarMember2019-04-012019-06-300001042642ddbs:EchoStarMember2019-01-012019-06-300001042642ddbs:EchoStarMember2018-04-012018-06-300001042642ddbs:EchoStarMember2018-01-012018-06-300001042642ddbs:TelemarketingLitigationMember2017-06-052017-06-050001042642srt:ScenarioPreviouslyReportedMemberus-gaap:AccountingStandardsUpdate201602Member2019-06-300001042642srt:RestatementAdjustmentMemberus-gaap:AccountingStandardsUpdate201602Member2019-06-3000010426422018-04-012018-06-300001042642ddbs:NagraStarLLCMember2019-06-300001042642ddbs:NagraStarLLCMember2018-12-3100010426422019-01-012019-06-3000010426422018-01-012018-06-300001042642ddbs:HughesBroadbandSalesAgencyAgreementMember2019-04-012019-06-300001042642ddbs:HughesBroadbandSalesAgencyAgreementMember2019-01-012019-06-300001042642ddbs:HughesBroadbandSalesAgencyAgreementMember2018-04-012018-06-300001042642ddbs:HughesBroadbandSalesAgencyAgreementMember2018-01-012018-06-300001042642ddbs:VermontNationalTelephoneCompanyMemberddbs:Aws3AuctionMemberddbs:NorthstarWirelessOrNorthstarSpectrumMember2016-09-2300010426422019-04-012019-05-140001042642us-gaap:NoncontrollingInterestMember2019-04-012019-06-300001042642us-gaap:AdditionalPaidInCapitalMember2019-04-012019-06-3000010426422019-04-012019-06-3000010426422019-06-3000010426422018-12-31iso4217:USDddbs:itemddbs:customerxbrli:purexbrli:sharesiso4217:USDxbrli:shares

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2019.

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM ______ TO______.

Commission File Number: 333-31929

DISH DBS Corporation

(Exact name of registrant as specified in its charter)

Colorado

84-1328967

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

9601 South Meridian Boulevard

Englewood, Colorado

80112

(Address of principal executive offices)

(Zip code)

(303) 723-1000

(Registrant’s telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act: None

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  No 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes  No 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  No

As of August 12, 2019, the registrant’s outstanding common stock consisted of 1,015 shares of common stock, $0.01 par value.

The registrant meets the conditions set forth in General Instruction (H)(1)(a) and (b) of Form 10-Q and is therefore filing this Form 10-Q with the reduced disclosure format.

Table of Contents

TABLE OF CONTENTS

PART I — FINANCIAL INFORMATION

Disclosure Regarding Forward-Looking Statements

i

Item 1.

Financial Statements

Condensed Consolidated Balance Sheets — June 30, 2019 and December 31, 2018 (Unaudited)

1

Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) For the Three and Six Months Ended June 30, 2019 and 2018 (Unaudited)

2

Condensed Consolidated Statements of Changes in Stockholder’s Equity (Deficit) For the Three and Six Months Ended June 30, 2019 and 2018 (Unaudited)

3

Condensed Consolidated Statements of Cash Flows For the Six Months Ended June 30, 2019 and 2018 (Unaudited)

4

Notes to Condensed Consolidated Financial Statements (Unaudited)

5

Item 2.

Management’s Narrative Analysis of Results of Operations

46

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

*

Item 4.

Controls and Procedures

64

PART II — OTHER INFORMATION

Item 1.

Legal Proceedings

65

Item 1A.

Risk Factors

65

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

*

Item 3.

Defaults Upon Senior Securities

*

Item 4.

Mine Safety Disclosures

None

Item 5.

Other Information

None

Item 6.

Exhibits

65

Signatures

66

*

This item has been omitted pursuant to the reduced disclosure format as set forth in General Instruction (H)(2) of Form 10-Q.

Table of Contents

PART I — FINANCIAL INFORMATION

DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS

Unless otherwise required by the context, in this report, the words “DISH DBS,” the “Company,” “we,” “our” and “us” refer to DISH DBS Corporation and its subsidiaries, “DISH Network” refers to DISH Network Corporation, our parent company, and its subsidiaries, including us, and “EchoStar” refers to EchoStar Corporation and its subsidiaries.

This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including, in particular, statements about our plans, objectives and strategies, growth opportunities in our industries and businesses, our expectations regarding future results, financial condition, liquidity and capital requirements, our estimates regarding the impact of regulatory developments and legal proceedings, and other trends and projections. Forward-looking statements are not historical facts and may be identified by words such as “future,” “anticipate,” “intend,” “plan,” “goal,” “seek,” “believe,” “estimate,” “expect,” “predict,” “will,” “would,” “could,” “can,” “may,” and similar terms. These forward-looking statements are based on information available to us as of the date of this Quarterly Report on Form 10-Q and represent management’s current views and assumptions. Forward-looking statements are not guarantees of future performance, events or results and involve known and unknown risks, uncertainties and other factors, which may be beyond our control. Accordingly, actual performance, events or results could differ materially from those expressed or implied in the forward-looking statements due to a number of factors, including, but not limited to, the following:

Competition and Economic Risks

As the pay-TV industry has matured and bundled offers combining video, broadband and/or wireless services have become more prevalent and competitive, we face intense and increasing competition from providers of video, broadband and/or wireless services, which may require us to further increase subscriber acquisition and retention spending or accept lower subscriber activations and higher subscriber churn.

Changing consumer behavior and competition from digital media companies that provide or facilitate the delivery of video content via the Internet may reduce our subscriber activations and may cause our subscribers to purchase fewer services from us or to cancel our services altogether, resulting in less revenue to us.

Economic weakness and uncertainty may adversely affect our ability to grow or maintain our business.

Our competitors may be able to leverage their relationships with programmers to reduce their programming costs and/or offer exclusive content that will place them at a competitive advantage to us.

Our over-the-top (“OTT”) Sling TV Internet-based services face certain risks, including, among others, significant competition.

If government regulations relating to the Internet change, we may need to alter the manner in which we conduct our Sling TV business, and/or incur greater operating expenses to comply with those regulations.

Changes in how network operators handle and charge for access to data that travels across their networks could adversely impact our business.

We face increasing competition from other distributors of unique programming services such as foreign language, sports programming and original content that may limit our ability to maintain subscribers that desire these unique programming services.

Operational and Service Delivery Risks

If our operational performance and customer satisfaction were to deteriorate, our subscriber activations and our subscriber churn rate may be negatively impacted, which could in turn adversely affect our revenue.

i

Table of Contents

If our subscriber activations continue to decrease, or if our subscriber churn rate, subscriber acquisition costs or retention costs increase, our financial performance will be adversely affected.

Programming expenses are increasing and may adversely affect our future financial condition and results of operations.

We depend on others to provide the programming that we offer to our subscribers and, if we fail to obtain or lose access to certain programming, our subscriber activations and our subscriber churn rate may be negatively impacted.

We may not be able to obtain necessary retransmission consent agreements at acceptable rates, or at all, from local network stations.

We may be required to make substantial additional investments to maintain competitive programming offerings.

Any failure or inadequacy of our information technology infrastructure and communications systems or those of third parties that we use in our operations, including, without limitation, those caused by cyber-attacks or other malicious activities, could disrupt or harm our business.

We currently depend on EchoStar to provide the vast majority of our satellite transponder capacity and other related services to us. Our business would be adversely affected if EchoStar ceases to provide these services to us and we are unable to obtain suitable replacement services from third parties.

Technology in the pay-TV industry changes rapidly, and our success may depend in part on our timely introduction and implementation of, and effective investment in, new competitive products and services and our failure to do so could cause our products and services to become obsolete and could negatively impact our business.

We rely on a single vendor or a limited number of vendors to provide certain key products or services to us such as information technology support, billing systems and security access devices, and the inability of these key vendors to meet our needs could have a material adverse effect on our business.

We rely on a few suppliers and in some cases a single supplier for many components of our new set-top boxes, and any reduction or interruption in supplies or significant increase in the price of supplies could have a negative impact on our business.

Our programming signals are subject to theft, and we are vulnerable to other forms of fraud that could require us to make significant expenditures to remedy.

We depend on independent third parties to solicit orders for our DISH TV services that represent a meaningful percentage of our total gross new DISH TV subscriber activations.

We have limited satellite capacity and failures or reduced capacity could adversely affect our DISH TV services.

Our owned and leased satellites are subject to construction, launch, operational and environmental risks that could limit our ability to utilize these satellites.

ii

Table of Contents

We generally do not carry commercial in-orbit insurance on any of the satellites that we use and could face significant impairment charges if any of our owned satellites fail.

We may have potential conflicts of interest with EchoStar due to our and DISH Network’s common ownership and management.

We rely on key personnel and the loss of their services may negatively affect our business.

Acquisition and Capital Structure Risks

Our parent, DISH Network, has made substantial investments to acquire certain wireless spectrum licenses and other related assets. In addition, DISH Network has made substantial non-controlling investments in the Northstar Entities and the SNR Entities related to AWS-3 wireless spectrum licenses.

Our parent, DISH Network, faces certain risks related to its non-controlling investments in the Northstar Entities and the SNR Entities.

To the extent that our parent, DISH Network, commercializes its wireless spectrum licenses, it will face certain risks entering and competing in the wireless services industry and operating a wireless services business.

We may pursue acquisitions and other strategic transactions to complement or expand our business that may not be successful, and we may lose up to the entire value of our investment in these acquisitions and transactions.

We may need additional capital, which may not be available on acceptable terms or at all, to continue investing in our business and to finance acquisitions and other strategic transactions.

We have substantial debt outstanding and may incur additional debt.

Our parent, DISH Network, is controlled by one principal stockholder who is also our Chairman.

Legal and Regulatory Risks

The rulings in the Telemarketing litigation requiring us to pay up to an aggregate amount of $341 million and imposing certain injunctive relief against us, if upheld, would have a material adverse effect on our cash, cash equivalents and marketable investment securities balances and our business operations.

Our business may be materially affected by the Tax Cuts and Jobs Act of 2017 (the “Tax Reform Act”). Negative or unexpected tax consequences could adversely affect our business, financial condition and results of operations.

Our business depends on certain intellectual property rights and on not infringing the intellectual property rights of others.

We are, and may become, party to various lawsuits which, if adversely decided, could have a significant adverse impact on our business, particularly lawsuits regarding intellectual property.

Our ability to distribute video content via the Internet, including our Sling TV services, involves regulatory risk.

iii

Table of Contents

Changes in the Cable Act of 1992 (“Cable Act”), and/or the rules of the Federal Communications Commission (“FCC”) that implement the Cable Act, may limit our ability to access programming from cable-affiliated programmers at nondiscriminatory rates.

The injunction against our retransmission of distant networks, which is currently waived, may be reinstated.

We are subject to significant regulatory oversight, and changes in applicable regulatory requirements, including any adoption or modification of laws or regulations relating to the Internet, could adversely affect our business.

Our DISH TV services depend on FCC licenses that can expire or be revoked or modified and applications for FCC licenses that may not be granted.

We are subject to digital high-definition (“HD”) “carry-one, carry-all” requirements that cause capacity constraints.

Our business, investor confidence in our financial results and DISH Network’s stock price may be adversely affected if our internal controls are not effective.

We may face other risks described from time to time in periodic and current reports we file with the Securities and Exchange Commission (“SEC”).

Other factors that could cause or contribute to such differences include, but are not limited to, those discussed under the caption “Risk Factors” in Part I, Item 1A of our most recent Annual Report on Form 10-K (the “10-K”) filed with the SEC, those discussed in “Management’s Narrative Analysis of Results of Operations” herein and in the 10-K and those discussed in other documents we file with the SEC. All cautionary statements made or referred to herein should be read as being applicable to all forward-looking statements wherever they appear. Investors should consider the risks and uncertainties described or referred to herein and should not place undue reliance on any forward-looking statements. The forward-looking statements speak only as of the date made, and we expressly disclaim any obligation to update these forward-looking statements.

iv

Table of Contents

Item 1. FINANCIAL STATEMENTS

DISH DBS CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in thousands, except share amounts)

(Unaudited)

As of

    

June 30,

    

December 31,

    

2019

2018

Assets

Current Assets:

Cash and cash equivalents

$

584,066

$

129,498

Marketable investment securities

249,624

149,740

Trade accounts receivable, net of allowance for doubtful accounts of $18,075 and $16,956, respectively

570,946

623,602

Inventory

331,103

290,697

Other current assets

294,557

234,054

Total current assets

2,030,296

1,427,591

Noncurrent Assets:

Restricted cash, cash equivalents and marketable investment securities

68,539

67,597

Property and equipment, net

1,632,497

1,377,949

FCC authorizations

611,794

637,346

Other investment securities

104,787

108,308

Operating lease assets

651,971

Other noncurrent assets, net

190,511

286,753

Total noncurrent assets

3,260,099

2,477,953

Total assets

$

5,290,395

$

3,905,544

Liabilities and Stockholder's Equity (Deficit)

Current Liabilities:

Trade accounts payable

$

320,259

$

217,268

Deferred revenue and other

658,482

644,920

Accrued programming

1,465,799

1,474,207

Accrued interest

223,681

222,996

Other accrued expenses

959,865

756,534

Current portion of long-term debt and finance lease obligations

2,415,786

1,338,527

Total current liabilities

6,043,872

4,654,452

Long-Term Obligations, Net of Current Portion:

Long-term debt and finance lease obligations, net of current portion

9,544,063

10,632,960

Deferred tax liabilities

450,021

461,452

Operating lease liabilities

436,574

Long-term deferred revenue and other long-term liabilities

204,842

198,840

Total long-term obligations, net of current portion

10,635,500

11,293,252

Total liabilities

16,679,372

15,947,704

Commitments and Contingencies (Note 9)

Stockholder’s Equity (Deficit):

Common stock, $.01 par value, 1,000,000 shares authorized, 1,015 shares issued and outstanding

Additional paid-in capital

1,442,337

1,152,369

Accumulated other comprehensive income (loss)

(2)

(376)

Accumulated earnings (deficit)

(12,831,312)

(13,194,440)

Total DISH DBS stockholder's equity (deficit)

(11,388,977)

(12,042,447)

Noncontrolling interests

287

Total stockholder’s equity (deficit)

(11,388,977)

(12,042,160)

Total liabilities and stockholder’s equity (deficit)

$

5,290,395

$

3,905,544

The accompanying notes are an integral part of these condensed consolidated financial statements.

1

Table of Contents

DISH DBS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

AND COMPREHENSIVE INCOME (LOSS)

(In thousands)

(Unaudited)

For the Three Months Ended

For the Six Months Ended

June 30,

June 30,

    

2019

    

2018

    

2019

    

2018

 

Revenue:

Subscriber-related revenue

$

3,117,066

$

3,352,354

$

6,215,002

$

6,699,951

Equipment sales and other revenue

49,533

40,953

89,597

76,578

Total revenue

3,166,599

3,393,307

6,304,599

6,776,529

Costs and Expenses (exclusive of depreciation shown separately below - Note 6):

Subscriber-related expenses

1,974,439

2,119,812

3,950,875

4,259,605

Satellite and transmission expenses

144,983

161,207

299,880

329,992

Cost of sales - equipment and other

49,603

35,697

89,944

66,006

Subscriber acquisition costs:

Cost of sales - subscriber promotion subsidies

3,007

9,108

9,524

25,038

Other subscriber acquisition costs

108,289

68,734

188,764

145,806

Subscriber acquisition advertising

126,782

105,420

233,689

208,429

Total subscriber acquisition costs

238,078

183,262

431,977

379,273

General and administrative expenses

187,930

183,594

374,507

345,278

Depreciation and amortization (Note 6)

135,600

160,233

290,715

338,752

Total costs and expenses

2,730,633

2,843,805

5,437,898

5,718,906

Operating income (loss)

435,966

549,502

866,701

1,057,623

Other Income (Expense):

Interest income

5,593

2,899

8,528

5,291

Interest expense, net of amounts capitalized

(194,857)

(194,777)

(390,502)

(401,872)

Other, net

3,131

21,415

4,564

(13,382)

Total other income (expense)

(186,133)

(170,463)

(377,410)

(409,963)

Income (loss) before income taxes

249,833

379,039

489,291

647,660

Income tax (provision) benefit, net

(64,465)

(91,497)

(126,287)

(156,310)

Net income (loss)

185,368

287,542

363,004

491,350

Less: Net income (loss) attributable to noncontrolling interests, net of tax

1,851

(124)

1,467

Net income (loss) attributable to DISH DBS

$

185,368

$

285,691

$

363,128

$

489,883

Comprehensive Income (Loss):

Net income (loss)

$

185,368

$

287,542

$

363,004

$

491,350

Other comprehensive income (loss):

Foreign currency translation adjustments

138

(657)

185

(257)

Unrealized holding gains (losses) on available-for-sale securities

102

65

254

90

Deferred income tax (expense) benefit, net

(27)

(4)

(65)

(43)

Total other comprehensive income (loss), net of tax

213

(596)

374

(210)

Comprehensive income (loss)

185,581

286,946

363,378

491,140

Less: Comprehensive income (loss) attributable to noncontrolling interests, net of tax

1,851

(124)

1,467

Comprehensive income (loss) attributable to DISH DBS

$

185,581

$

285,095

$

363,502

$

489,673

The accompanying notes are an integral part of these condensed consolidated financial statements.

2

Table of Contents

DISH DBS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN

STOCKHOLDER’S EQUITY (DEFICIT)

(In thousands)

(Unaudited)

Accumulated

Additional

Other

Accumulated

Common

Paid-In

Comprehensive

Earnings

Noncontrolling

    

Stock

    

Capital

    

Income (Loss)

    

(Deficit)

    

Interests

    

Total

Balance, December 31, 2017

$

$

1,116,848

$

935

$

(14,168,047)

$

3,601

$

(13,046,663)

Non-cash, stock-based compensation

9,041

9,041

Change in unrealized holding gains (losses) on available-for-sale securities, net

25

25

Deferred income tax (expense) benefit attributable to unrealized gains (losses) on available-for-sale securities

(39)

(39)

Foreign currency translation

400

400

ASU 2014-09 cumulative catch-up adjustment

2,320

2,320

Net income (loss) attributable to noncontrolling interests

(384)

(384)

Net income (loss) attributable to DISH DBS

204,192

204,192

Balance, March 31, 2018

$

$

1,125,889

$

1,321

$

(13,961,535)

$

3,217

$

(12,831,108)

Non-cash, stock-based compensation

9,664

9,664

Change in unrealized holding gains (losses) on available-for-sale securities, net

65

65

Deferred income tax (expense) benefit attributable to unrealized gains (losses) on available-for-sale securities

(4)

(4)

Foreign currency translation

(657)

(657)

Net income (loss) attributable to noncontrolling interests

1,851

1,851

Net income (loss) attributable to DISH DBS

285,691

285,691

Other

(192)

(192)

Balance, June 30, 2018

$

$

1,135,553

$

725

$

(13,675,844)

$

4,876

$

(12,534,690)

Balance, December 31, 2018

$

$

1,152,369

$

(376)

$

(13,194,440)

$

287

$

(12,042,160)

Non-cash, stock-based compensation

11,003

11,003

Change in unrealized holding gains (losses) on available-for-sale securities, net

152

152

Deferred income tax (expense) benefit attributable to unrealized gains (losses) on available-for-sale securities

(38)

(38)

Foreign currency translation

47

47

Net income (loss) attributable to noncontrolling interests

(124)

(124)

Net income (loss) attributable to DISH DBS

177,760

177,760

Balance, March 31, 2019

$

$

1,163,372

$

(215)

$

(13,016,680)

$

163

$

(11,853,360)

Non-cash, stock-based compensation

11,528

11,528

Change in unrealized holding gains (losses) on available-for-sale securities, net

102

102

Deferred income tax (expense) benefit attributable to unrealized gains (losses) on available-for-sale securities

(27)

(27)

Foreign currency translation

138

138

Satellite and Spectrum Transaction, net of deferred taxes

267,437

(163)

267,274

Net income (loss) attributable to DISH DBS

185,368

185,368

Balance, June 30, 2019

$

$

1,442,337

$

(2)

$

(12,831,312)

$

$

(11,388,977)

The accompanying notes are an integral part of these condensed consolidated financial statements.

3

Table of Contents

DISH DBS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

For the Six Months Ended

June 30,

2019

    

2018

Cash Flows From Operating Activities:

Net income (loss)

$

363,004

$

491,350

Adjustments to reconcile net income (loss) to net cash flows from operating activities:

Depreciation and amortization

290,715

338,752

Realized and unrealized losses (gains) on investments

(3,160)

17,443

Non-cash, stock-based compensation

22,531

18,705

Deferred tax expense (benefit)

(39,649)

(12,703)

Other, net

(30,509)

(66,827)

Changes in current assets and current liabilities, net

161,713

(126,440)

Net cash flows from operating activities

764,645

660,280

Cash Flows From Investing Activities:

(Purchases) Sales and maturities of marketable investment securities, net

(96,031)

98,085

Purchases of property and equipment

(183,776)

(157,593)

Other, net

17,432

5,543

Net cash flows from investing activities

(262,375)

(53,965)

Cash Flows From Financing Activities:

Redemption and repurchases of senior notes

(22,365)

(1,088,392)

Advances from affiliates

155,283

Repayment of long-term debt and finance lease obligations

(10,860)

(18,569)

Other, net

(400)

(2,760)

Net cash flows from financing activities

(33,625)

(954,438)

Net increase (decrease) in cash, cash equivalents, restricted cash and cash equivalents

468,645

(348,123)

Cash, cash equivalents, restricted cash and cash equivalents, beginning of period (Note 4)

130,076

365,066

Cash, cash equivalents, restricted cash and cash equivalents, end of period (Note 4)

$

598,721

$

16,943

The accompanying notes are an integral part of these condensed consolidated financial statements.

4

Table of Contents

DISH DBS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

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. Our subsidiaries operate one business segment.

Pay-TV

We offer pay-TV services under the DISH® brand and the Sling® brand (collectively “Pay-TV” services). The DISH branded pay-TV service consists of, among other things, FCC licenses authorizing us to use direct broadcast satellite (“DBS”) and Fixed Satellite Service (“FSS”) spectrum, our owned and leased satellites, receiver systems, broadcast operations, customer service facilities, a leased fiber optic network, Smart Home service and call center operations, and certain other assets utilized in our operations (“DISH TV”). We also design, develop and distribute receiver systems and provide digital broadcast operations, including satellite uplinking/downlinking, transmission and other services to third-party pay-TV providers. See Note 2 and Note 13 for further information. The Sling branded pay-TV services consist of, among other things, multichannel, live-linear streaming OTT Internet-based domestic, international and Latino video programming services (“Sling TV”). As of June 30, 2019, we had 12.032 million Pay-TV subscribers in the United States, including 9.560 million DISH TV subscribers and 2.472 million Sling TV subscribers.

2.

Summary of Significant Accounting Policies

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, 2018. Certain prior period amounts have been reclassified to conform to the current period presentation.

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 interests or redeemable noncontrolling interests. See below for further information. Non-consolidated 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, these equity securities are classified as either marketable investment securities or other investments and recorded at fair value with changes recognized in “Other, net” within “Other Income (Expense)” on our Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). All significant intercompany accounts and transactions have been eliminated in consolidation.

5

Table of Contents

DISH DBS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - Continued

(Unaudited)

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, relative standalone selling prices of performance obligations, leases, asset impairments, estimates of future cash flows used to evaluate impairments, useful lives of property, equipment and intangible assets, independent third-party retailer incentives, programming expenses and subscriber lives. Economic conditions may increase 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.

Marketable Investment Securities

Historically, we classified all marketable investment securities as available-for-sale, except for investments which were accounted for as trading securities, and adjusted the carrying amount of our available-for-sale securities to fair value and reported the related temporary unrealized gains and losses as a separate component of “Accumulated other comprehensive income (loss)” within “Total stockholder’s equity (deficit),” net of related deferred income tax on our Condensed Consolidated Balance Sheets. Our trading securities were carried at fair value, with changes in fair value recognized in “Other, net” within “Other Income (Expense)” on our Condensed Consolidated Statements of Operations and Comprehensive Income (Loss).

Subsequent to the adoption of ASU 2016-01 Recognition and Measurement of Financial Assets and Financial Liabilities (“ASU 2016-01”) during the first quarter 2018, all equity securities are carried at fair value, with changes in fair value recognized in “Other, net” within “Other Income (Expense)” on our Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). All debt securities are classified as available-for-sale. We adjust the carrying amount of our debt securities to fair value and report the related temporary unrealized gains and losses as a separate component of “Accumulated other comprehensive income (loss)” within “Total stockholder’s equity (deficit),” net of related deferred income tax on our Condensed Consolidated Balance Sheets.  Declines in the fair value of a marketable debt security which are determined to be “other-than-temporary” are recognized on our Condensed Consolidated Statements of Operations and Comprehensive Income (Loss), thus establishing a new cost basis for such investment.

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;
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; and quoted prices for identical or similar instruments in markets that are not active; 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.

6

Table of Contents

DISH DBS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - Continued

(Unaudited)

As of June 30, 2019 and December 31, 2018, the carrying amount 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 finance lease obligations”) was equal to or approximated 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 based on, among other things, available trade information, and/or 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 8 for the fair value of our long-term debt.

Revenue Recognition

Our revenue is primarily derived from Pay-TV programming services that we provide to our subscribers. We also generate revenue from equipment rental fees and other hardware related fees, including DVRs and fees from subscribers with multiple receivers; advertising services; fees earned from our Smart Home service operations; warranty services; and sales of digital receivers and related equipment to third-party pay-TV providers. See Note 11 for further information, including revenue disaggregated by major source.

Our residential video subscribers contract for individual services or combinations of services, as discussed above, the majority of which are generally distinct and are accounted for as separate performance obligations. We consider our installations for first time DISH TV subscribers to be a service. However, since we provide a significant integration service combining the installation with programming services, we have concluded that the installation is not distinct from programming and thus the installation and programming services are accounted for as a single performance obligation. We generally satisfy these performance obligations and recognize revenue as the services are provided, for example as the programming is broadcast to subscribers, as this best represents the transfer of control of the services to the subscriber.

In cases where a subscriber is charged certain nonrefundable upfront fees, those fees are generally considered to be material rights to the subscriber related to the subscriber’s option to renew without having to pay an additional fee upon renewal. These fees are deferred and recognized over the estimated period of time during which the fee remains material to the customer, which we estimate to be less than one year. Revenues arising from our Smart Home service operations that are separate from the initial installation, such as mounting a TV on a subscriber’s wall, are generally recognized when these services are performed.

For our residential video subscribers, we have concluded that the contract term under Accounting Standard Codification Topic 606, Revenue from Contracts with Customers (“ASC 606”), is one month and as a result the revenue recognized for these subscribers for a given month is equal to the amount billed in that month, except for certain nonrefundable upfront fees that are accounted for as material rights, as discussed above.

Revenues from our advertising services are typically recognized as the advertisements are broadcast. Sales of equipment to subscribers or other third parties are recognized when control is transferred under the contract. Revenue from our commercial video subscribers typically follows the residential model described above, with the exception that the contract term for most of our commercial subscribers exceeds one month and can be multiple years in length. However, commercial subscribers typically do not receive time-limited discounts or free service periods and accordingly, while they may have multiple performance obligations, revenue is equal to the amount billed in a given month.

7

Table of Contents

DISH DBS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - Continued

(Unaudited)

Contract Balances

The timing of revenue recognition generally differs from the timing of invoicing to customers. When revenue is recognized prior to invoicing, we record a receivable. When revenue is recognized subsequent to invoicing, we record deferred revenue. Our residential video subscribers are typically billed monthly, and the contract balances for those customers arise from the timing of the monthly billing cycle. We do not adjust the amount of consideration for financing impacts as we apply a practical expedient when we anticipate that the period between transfer of goods and services and eventual payment for those goods and services will be less than one year. See Note 12 for further information, including balance and activity detail about our allowance for doubtful accounts and deferred revenue related to contracts with subscribers.

Assets Recognized Related to the Costs to Obtain a Contract with a Subscriber

We recognize an asset for the incremental costs of obtaining a contract with a subscriber if we expect the benefit of those costs to be longer than one year.  We have determined that certain sales incentive programs, including those with our independent third-party retailers, meet the requirements to be capitalized, and payments made under these programs are capitalized and amortized to expense over the estimated subscriber life.  During the three months ended June 30, 2019 and 2018, we capitalized $55 million and $49 million, respectively, under these programs.  The amortization expense related to these programs was $17 million and $5 million, respectively, for the three months ended June 30, 2019 and 2018, respectively.  During the six months ended June 30, 2019 and 2018, we capitalized $92 million and $90 million, respectively, under these programs. The amortization expense related to these programs was $31 million and $8 million, respectively, for the six months ended June 30, 2019 and 2018, respectively. As of June 30, 2019 and December 31, 2018, we had a total of $230 million and $169 million capitalized on our Condensed Consolidated Balance Sheets.  These amounts are capitalized in “Other current assets” and “Other noncurrent assets, net” on our Condensed Consolidated Balance Sheets, and then amortized in “Other subscriber acquisition costs” on our Condensed Consolidated Statements of Operations and Comprehensive Income (Loss).

Leases

We enter into operating and finance leases for, among other things, satellites, office space, data centers, warehouses and distribution centers, vehicles used for installation and Smart Home Services, and other equipment. Our leases have remaining lease terms from one to 12 years, some of which include renewal options, and some of which include options to terminate the leases within one year.

We determine if an arrangement is a lease and classify that lease as either an operating or finance lease at inception. Operating leases are included in “Operating lease assets,” “Other accrued expenses” and “Operating lease liabilities” on our Condensed Consolidated Balance Sheets. Finance leases are included in “Property and equipment, net,” “Current portion of long-term debt and finance lease obligations” and “Long-term debt and finance lease obligations, net of current portion” on our Condensed Consolidated Balance Sheets.  Leases with an initial term of 12 months or less are not recorded on the balance sheet and we recognize lease expense for these leases on a straight-line basis over the lease term on our Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). See Note 7 for further information on our lease expenses.

8

Table of Contents

DISH DBS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - Continued

(Unaudited)

Right of use (“ROU”) assets represent our right to use an underlying asset for the lease term and lease liabilities represent the present value of our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. When our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The operating lease ROU asset also includes the impact of prepaid or deferred lease payments. The length of our lease term may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for operating lease payments is recognized on a straight-line basis over the lease term.

We lease certain assets from EchoStar, including, among other things, satellites, office space and data centers. See Note 13 for further information on our Related Party Transactions with EchoStar. On May 19, 2019, DISH Network entered into an agreement with EchoStar (the “Master Transaction Agreement”). Upon the closing of the Master Transaction Agreement, these satellites and satellite service agreements leased from EchoStar will be transferred to DISH Network. See Note 1 “Recent Developments” in the Notes to DISH Network’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2019 for further information on the Master Transaction Agreement.

We have lease agreements with lease and non-lease components, which are generally accounted for separately. Our variable lease payments are immaterial and our lease agreements do not contain any material residual value guarantees or material restrictive covenants.

For equipment leased to new and existing DISH TV subscribers we made an accounting policy election to combine the equipment with our programming services as a single performance obligation in accordance with the revenue recognition guidance as the programming services are the predominant component.

Impact of Adoption of ASU 2016-02

In February 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-02 Leases (“ASU 2016-02”) and has modified the standard thereafter. We adopted ASU 2016-02, as modified, on January 1, 2019 using the modified retrospective method. Under the modified retrospective method, we applied the new guidance to all leases that commenced before and were existing as of January 1, 2019.

The adoption of ASU 2016-02 had no impact on our Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) and cash flows from operating, investing and financing activities on our Condensed Consolidated Statements of Cash Flows.

9

Table of Contents

DISH DBS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - Continued

(Unaudited)

The adoption of ASU 2016-02 impacted our June 30, 2019 Condensed Consolidated Balance Sheets, including the reclassification of our deferred rent liabilities to an operating lease asset, as follows:

Condensed Consolidated Balance Sheets

DISH DBS (as would have been reported under previous standards)

    

Impact of adopting ASU 2016-02

DISH DBS (as currently reported)

(In thousands)

As of June 30, 2019

Operating lease assets

$

$

651,971

$

651,971

Total assets

$

4,638,424

$

651,971

$

5,290,395

Other accrued expenses

$

742,475

$

217,390

$

959,865

Operating lease liabilities

$

$