Dish Network 2003 Annual Report Download - page 46

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Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS - Continued
41
The following table reconciles EBITDA to the accompanying financial statements:
For the Years Ended
December 31,
2002
2003 (As Restated) (1)
(In thousands)
EBITDA............................................................... 1,124,520$ (2,679)$
Less:
Interest expense, net .......................................... 487,432 369,976
Interest expense, merger related......................... - 33,323
Income tax provision (benefit), net..................... 14,376 73,098
Depreciation and amortization........................... 398,206 372,958
Net income (loss).................................................. 224,506$ (852,034)$
(1) We restated our 2002 consolidated financial statements to reverse an accrual of
approximately $30.2 million, on a pre-tax basis, related to the replacement of smart
cards in satellite receivers owned by us and leased to consumers. See Note 3 to the Notes
to the Consolidated Financial Statements in Item 15 of this Annual Report on Form 10-K.
EBITDA is not a measure determined in accordance with accounting principles generally accepted in the United
States, or GAAP, and should not be considered a substitute for operating income, net income or any other measure
determined in accordance with GAAP. EBITDA is used as a measurement of operating efficiency and overall
financial performance and we believe it to be a helpful measure for those evaluating companies in the multi-channel
video programming distribution industry. Conceptually, EBITDA measures the amount of income generated each
period that could be used to service debt, pay taxes and fund capital expenditures. EBITDA should not be considered
in isolation or as a substitute for measures of performance prepared in accordance with GAAP.
Net income (loss). “Net income” was $224.5 million during the year ended December 31, 2003, an increase of $1.077
billion compared to a “Net loss” of $852.0 million for the same period in 2002. The improvement was primarily
attributable to an increase in “Operating income” and an improvement in “Other income and expense”, the
components of which are discussed above. Our future net income (loss) results will be negatively impacted to the
extent we introduce more aggressive marketing promotions that materially increase our subscriber acquisition costs
since these subscriber acquisition costs are generally expensed as incurred.
Net income (loss) to common shareholders. “Net income to common shareholders” was $224.5 million during the
year ended December 31, 2003, an improvement of $639.1 million compared to “Net loss to common shareholders” of
$414.6 million for the same period in 2002. The improvement is primarily attributable to the improvement in “Net
loss”, discussed above. The improvement was partially offset by a $437.4 million gain on the redemption of Series D
convertible preferred stock from Vivendi during 2002.