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Dish announces 3rd 2012 quarter results


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#1 OFFLINE   RAD

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Posted 06 November 2012 - 12:26 PM

From http://dish.client.s...eleaseID=718899

ENGLEWOOD, Colo.--(BUSINESS WIRE)-- DISH Network Corporation (NASDAQ: DISH) today reported revenue totaling $3.52 billion for the quarter ended Sept. 30, 2012 compared with $3.60 billion for the corresponding period in 2011.

Net loss attributable to DISH Network totaled $158 million for the quarter ending Sept. 30, 2012, compared with the $319 million in net income from the same period last year. DISH's recent settlement of the Voom litigation negatively impacted net income by $453 million, adjusted for an estimated tax rate of approximately 38 percent.

Except for this one-time event, DISH's third quarter net income would have totaled $295 million, an 8 percent decline versus third quarter 2011 net income of $319 million.

Additional contributors to year-over-year net income decline included higher subscriber-related expenses from higher programming costs and increased subscriber acquisition costs associated with our 12.7 percent increase in gross subscriber additions.

Diluted loss per share was $0.35 for the third quarter, compared with diluted earnings per share of $0.71 during the same period in 2011. DISH Network's net subscribers decreased by approximately 19,000 during the third quarter compared to a net subscriber loss of about 111,000 subscribers a year prior. The company ended third quarter with approximately 14.042 million subscribers.


Since the Voom settlement didn't occur until October what caused the $453 million impact which they say was due to the Voom litigation? Did they decided to write off some amount on the 3rd quarter books or was this just due to loss of customers due to the AMC networks loss and the money spent on Roku boxes and Amazon subscriptions?

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#2 OFFLINE   Stewart Vernon

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Posted 06 November 2012 - 04:41 PM

Two possible answers:

1. They probably were always writing off some court costs, whatever the lawyers were being paid and such, as they went along anyway. So that might be some of it.

2. Once the case was settled, they probably could do creative accounting to put that debt whenever they wanted. They could amortize it over several quarters... or throw it into an old quarter so it is already accounted for... since most of the settlement would have been for past debt anyway, it makes sense to throw it in the most recent closed quarter and be done with it going forward.

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#3 OFFLINE   fudpucker

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Posted 06 November 2012 - 08:17 PM

It is odd. My understanding is that you can't just move an upcoming debt to a period before it incurred (you can find ways to push it the other direction) especially after a lot of the laws such as Sorbanes-Oxley (sp). So no idea how they have in this past quarter.

#4 OFFLINE   James Long

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Posted 06 November 2012 - 08:31 PM

They can correct past quarters ... and since 3Q had not been reported yet it seems to be as good as place as any to place the debt from the settlement.

#5 OFFLINE   Stewart Vernon

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Posted 06 November 2012 - 09:07 PM

The argument could also be made that Dish had been putting money aside for an expected settlement for a while... and wasn't this an appeal anyway? Or was this the original trial? I lost track.

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#6 OFFLINE   James Long

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Posted 06 November 2012 - 09:13 PM

The argument could also be made that Dish had been putting money aside for an expected settlement for a while... and wasn't this an appeal anyway? Or was this the original trial? I lost track.

This was the original trial on the Voom issue. DISH lost some earlier rulings in the trial but had not yet lost the major claim put forth by Voom.

#7 OFFLINE   Stewart Vernon

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Posted 06 November 2012 - 10:53 PM

Thanks... it went on for so long I had genuinely forgotten if this was the original trial still or an appeal of an earlier verdict.

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#8 OFFLINE   Nick

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Posted 07 November 2012 - 08:49 AM

The argument could also be made that Dish had been putting money aside for an expected settlement for a while... and wasn't this an appeal anyway? Or was this the original trial? I lost track.

If I recall my college 'principals of accounting' courses correctly, if a future loss is anticipated, it is standard accounting practice for a company to set up a reserve for that loss at the time the loss is recognized. That, typically, puts the hit in a fiscal quarter that preceeds the quarter in which the loss is actually paid out, particularly when litigation is involved.

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#9 OFFLINE   Stewart Vernon

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Posted 07 November 2012 - 03:37 PM

If I recall my college 'principals of accounting' courses correctly, if a future loss is anticipated, it is standard accounting practice for a company to set up a reserve for that loss at the time the loss is recognized. That, typically, puts the hit in a fiscal quarter that preceeds the quarter in which the loss is actually paid out, particularly when litigation is involved.


Thanks... that is kind of what I was thinking... You figure you're going to pay something, so you start setting aside funds for that purpose... so even though you haven't paid out yet, you have separated that cash from your normal funds... so then whenever you actually get the judgment for the payout, you can essentially back-date to an earlier quarter and go ahead and take the hit since you had sort-of been paying for it.

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