v2.4.0.8

Investment Securities

12 Months Ended

Dec. 31, 2013

Investment Securities

Investment Securities

Note 5. Investment Securities

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

		As of December 31,
		2013			2012
		(In thousands)
Marketable investment securities—current:
Corporate bonds		$	833,791		$	654,096
VRDNs			34,705			66,145
Strategic equity securities			33,613			56,288
Other			84,424			39,422
​	​	​	​	​	​	​	​
Total marketable investment securities—current			986,533			815,951
Restricted marketable investment securities(1)			7,965			7,529
​	​	​	​	​	​	​	​
Total			994,498			823,480
​	​	​	​	​	​	​	​
Restricted cash and cash equivalents(1)			8,172			21,516
​	​	​	​	​	​	​	​
Other investments—noncurrent:
Cost method			25,977			27,711
Equity method			143,794			155,500
​	​	​	​	​	​	​	​
Total other investments—noncurrent			169,771			183,211
​	​	​	​	​	​	​	​
Total marketable investment securities, restricted cash and cash equivalents, and other investments		$	1,172,441		$	1,028,207
​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​

(1)

Restricted marketable investment securities and restricted cash and cash equivalents are included in "Restricted cash and marketable investment securities" in our 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.

Corporate bonds

Our corporate bond portfolio includes debt instruments issued by individual corporations, primarily in the industrial and financial services industries.

Variable rate demand notes ("VRDNs")

VRDNs are long-term floating rate 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 of investments in municipalities and corporations, which are backed by financial institutions or other highly rated companies 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.

Strategic Equity Securities

Our strategic investment portfolio consists of investments in shares of common stock of public companies, which are highly speculative and have experienced and continue to experience volatility. The value of our investment portfolio depends on the value of such shares of common stock. We did not receive any dividend income for the years ended December 31, 2013 and 2011. For the year ended December 31, 2012, we received $46.0 million in dividend income from one of our strategic investments.

Other

Our other current marketable investment securities portfolio includes investments in various debt instruments, including government bonds.

Restricted Cash and Marketable Investment Securities

As of December 31, 2013 and 2012, our restricted marketable investment securities, together with our restricted cash, included amounts required as collateral for our letters of credit or surety bonds.

Other Investments—Noncurrent

We have several strategic investments in certain equity securities that are accounted for using either the equity or the cost method of accounting. Our ability to realize value from our strategic investments in companies that are not publicly traded depends on the success of those companies' businesses and their ability to obtain sufficient capital 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.

As of December 31, 2013 and 2012, our equity method investments included $18.0 and $34.5 million, respectively, for our investment in DISH Digital Holding L.L.C. ("DISH Digital"), a joint venture between us and DISH Network. The carrying amount of our investment reflects the $44.7 million aggregate carrying amount of cash and certain noncash assets that we contributed to DISH Digital upon its formation on July 1, 2012 in exchange for a one-third equity interest in DISH Digital, less our equity in the net loss of DISH Digital of $16.5 million and $10.2 million for the years ended December 31, 2013 and 2012, respectively. See Note 19 for additional information about our investment in DISH Digital.

Unrealized Gains (Losses) on Marketable Investment Securities

The components of our available-for-sale investments are summarized in the table below.

					Unrealized
		Amortized Cost									Estimated Fair Value
					Gains			Losses
		(In thousands)
As of December 31, 2013
Debt securities:
Corporate bonds		$	833,888		$	227		$	(324	)	$	833,791
VRDNs			34,705			—			—			34,705
Other (including restricted)			92,876			14			(501	)		92,389
Equity securities—strategic			15,272			18,341			—			33,613
​	​	​	​	​	​	​	​	​	​	​	​	​	​
Total marketable investment securities		$	976,741		$	18,582		$	(825	)	$	994,498
​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​	​	​	​	​
As of December 31, 2012
Debt securities:
Corporate bonds		$	653,812		$	591		$	(307	)	$	654,096
VRDNs			66,145			—			—			66,145
Other (including restricted)			46,946			5			—			46,951
Equity securities—strategic			21,214			35,074			—			56,288
​	​	​	​	​	​	​	​	​	​	​	​	​	​
Total marketable investment securities		$	788,117		$	35,670		$	(307	)	$	823,480
​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​	​	​	​	​

As of December 31, 2013, restricted and non-restricted marketable investment securities included debt securities of $885.1 million with contractual maturities of one year or less and $75.8 million with contractual maturities greater than one year. We may realize proceeds from certain investments prior to their contractual maturity as a result of our ability to sell these securities prior to their contractual maturity.

Marketable Investment Securities in a Loss Position

The following table reflects the length of time that our available-for-sale securities have been in an unrealized loss position. We do not intend to sell these securities before they recover or mature, and it is more likely than not that we will hold these securities until they recover or mature. In addition, we are not aware of any specific factors indicating that the underlying issuers of these 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 securities are primarily related to temporary market fluctuations.

		As of December 31,
		2013						2012
		Fair Value			Unrealized Losses			Fair Value			Unrealized Losses
		(In thousands)
Less than 12 months		$	571,592		$	(825	)	$	275,587		$	(288	)
12 months or more			—			—			12,963			(19	)
​	​	​	​	​	​	​	​	​	​	​	​	​	​
Total		$	571,592		$	(825	)	$	288,550		$	(307	)
​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​	​	​	​	​

Realized Gains (Losses) on Marketable Investment Securities

We recognized gains from the sales of our available-for-sale marketable investment securities of $36.3 million, $175.2 million and $6.7 million for the years ended December 31, 2013, 2012 and 2011, respectively. We recognized minimal losses from the sales of our available-for-sale marketable investment securities for the years ended December 31, 2013, 2012 and 2011.

Proceeds from sales of our available-for-sale marketable investment securities totaled $177.5 million, $601.3 million and $1.54 billion for the years ended December 31, 2013, 2012 and 2011, respectively.

Fair Value Measurements

Our current marketable investment securities are measured at fair value on a recurring basis as summarized in the table below. As of December 31, 2013 and 2012, we did not have investments that were categorized within Level 3 of the fair value hierarchy.

		As of December 31,
		2013									2012
		Total			Level 1			Level 2			Total			Level 1			Level 2
		(In thousands)
Cash equivalents (including restricted)		$	548,714		$	49,338		$	499,376		$	533,943		$	23,621		$	510,322
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Debt securities:
Corporate bonds		$	833,791		$	—		$	833,791		$	654,096		$	—		$	654,096
VRDNs			34,705			—			34,705			66,145			—			66,145
Other (including restricted)			92,389			—			92,389			46,951			—			46,951
Equity securities—strategic			33,613			33,613			—			56,288			56,288			—
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Total marketable investment securities		$	994,498		$	33,613		$	960,885		$	823,480		$	56,288		$	767,192
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​

During 2011, we disposed of investments that were accounted for using the fair-value method and we reported net gains of $15.9 million in "Gains on investments accounted for at fair value, net" in our Consolidated Statements of Operations and Comprehensive Income (Loss) for the year ended December 31, 2011. In 2013 and 2012, we did not have any investments that were accounted for using the fair value method.

X

- Details

Name:	us-gaap_InvestmentsAbstract
Namespace Prefix:	us-gaap_
Data Type:	xbrli:stringItemType
Balance Type:	na
Period Type:	duration

X

- Definition

The entire disclosure for cash, cash equivalents, investments in debt and equity instruments (including cost and equity investees and related income statement amounts), equity and cost method investments, investments in joint ventures and any other investment.

+ References

No definition available.

+ Details

Name:	us-gaap_InvestmentsInDebtAndEquityInstrumentsCashAndCashEquivalentsUnrealizedAndRealizedGainsLossesTextBlock
Namespace Prefix:	us-gaap_
Data Type:	nonnum:textBlockItemType
Balance Type:	na
Period Type:	duration