Dish Network 2000 Annual Report Download - page 73

ECHOSTAR COMMUNICATIONS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued
F–22
The temporary differences, which give rise to deferred tax assets and liabilities as of December 31, 1999
and 2000, are as follows (in thousands):
December 31,
1999 2000
Current deferred tax assets:
Accrued royalties ................................................................................. $ 30,018 $ 36,425
Inventory reserves and cost methods...................................................... 1,380 3,974
Accrued expenses................................................................................. 29,846 40,685
Allowance for doubtful accounts ........................................................... 5,636 12,533
Reserve for warranty costs .................................................................... 78 79
Total current deferred tax assets................................................................ 66,958 93,696
Current deferred tax liabilities:
Other................................................................................................... (68) (40)
Total current deferred tax liabilities........................................................... (68) (40)
Gross current deferred tax assets ............................................................... 66,890 93,656
Valuation allowance................................................................................. (55,162) (79,023)
Net current deferred tax assets .................................................................. 11,728 14,633
Noncurrent deferred tax assets:
General business and foreign tax credits................................................. 2,504 2,504
Net operating loss carryforwards ........................................................... 528,961 771,748
Incentive plan stock compensation......................................................... 22,600 38,841
Other................................................................................................... 9,553 23,802
Total noncurrent deferred tax assets .......................................................... 563,618 836,895
Noncurrent deferred tax liabilities:
Depreciation ........................................................................................ (43,459) (77,452)
Other................................................................................................... (425) (1,108)
Total noncurrent deferred tax liabilities ..................................................... (43,884) (78,560)
Gross deferred tax assets .......................................................................... 519,734 758,335
Valuation allowance................................................................................. (464,327) (705,833)
Net noncurrent deferred tax assets............................................................. 55,407 52,502
Net deferred tax assets.............................................................................. $ 67,135 $ 67,135
6. Stockholders’ Equity (Deficit)
Common Stock
The Class A, Class B and Class C common stock are equivalent in all respects except voting rights.
Holders of Class A and Class C common stock are entitled to one vote per share and holders of Class B common
stock are entitled to ten votes per share. Each share of Class B and Class C common stock is convertible, at the
option of the holder, into one share of Class A common stock. Upon a change in control of ECC, each holder of
outstanding shares of Class C common stock is entitled to ten votes for each share of Class C common stock held.
ECC’s principal stockholder owns all outstanding Class B common stock and all other stockholders own Class A
common stock. There are no shares of Class C common stock outstanding.
Series C Cumulative Convertible Preferred Stock
In November 1997, EchoStar issued 2.3 million shares of 6 3/4% Series C Cumulative Convertible
Preferred Stock (the “Series C Preferred Stock”) which resulted in net proceeds to EchoStar of approximately $97
million. Simultaneous with the issuance of the Series C Preferred Stock, the purchasers of the Series C Preferred
Stock placed approximately $15 million into an account (the “Deposit Account”). EchoStar recorded proceeds from
the issuance of the Series C Preferred Stock net of the amount placed in the Deposit Account. As of November 2,
1999, proceeds from the issuance of the Series C Preferred Stock were accreted to the face amount of $115 million.