Dish Network 2006 Annual Report Download - page 103

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ECHOSTAR COMMUNICATIONS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued
F–18
For the Years Ended December 31,
2006 2005 2004
(In thousands, except per share data)
Numerator:
Numerator for basic net income (loss) per share - Net income (loss).......................................... $ 608,272 $1,514,540 $ 214,769
Interest on dilutive subordinated convertible notes, net of related tax effect............................... 9,834 46,148 -
Numerator for diluted net income (loss) per common share........................................................ $ 618,106 $1,560,688 $ 214,769
Denominator:
Denominator for basic net income (loss) per common share –
weighted-average common shares outstanding......................................................................... 444,743 452,118 464,053
Dilutive impact of options outstanding........................................................................................ 677 1,648 3,545
Dilutive impact of subordinated notes convertible into common shares...................................... 7,265 30,365 -
Denominator for diluted net income (loss) per share –
weighted-average diluted common shares outstanding............................................................. 452,685 484,131 467,598
Net income (loss) per share:
Basic net income (loss)............................................................................................................. $ 1.37 $ 3.35 $ 0.46
Diluted net income (loss).......................................................................................................... $ 1.37 $ 3.22 $ 0.46
Shares of Class A common stock issuable upon conversion of:
5 3/4% Convertible Subordinated Notes due 2008................................................................... 23,100 23,100 23,100
3% Convertible Subordinated Note due 2010.......................................................................... 6,866 6,866 6,866
3% Convertible Subordinated Note due 2011.......................................................................... 399 399 399
As of December 31, 2006, 2005 and 2004 there were options to purchase 10.2 million, 10.4 million and 10.9 million
shares of Class A common stock outstanding, respectively, not included in the above denominator as their effect is
antidilutive.
Vesting of options and rights to acquire shares of our Class A common stock (“Restricted Performance Units”)
granted pursuant to our long term incentive plans is contingent upon meeting certain long-term goals which have not
yet been achieved. As a consequence, the following are not included in the diluted EPS calculation:
For the Years Ended December 31,
2006 2005 2004
(In thousands)
Performance based options....................... 11,007 11,229 6,994
Restricted Performance Units................... 725 545 -
New Accounting Pronouncements
In July 2006, the FASB issued Interpretation No. 48, “Accounting for Uncertainty in Income Taxes – An
Interpretation of FASB Statement No. 109” (“FIN 48”), which clarifies the accounting for uncertainty in income
taxes recognized in an enterprise’s financial statements in accordance with SFAS 109. FIN 48 also prescribes a
recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax
position taken or expected to be taken in a tax return. In addition, FIN 48 provides guidance on derecognition,
classification, interest and penalties, accounting in interim periods, disclosure and transition. The provisions of FIN
48, which are effective for fiscal years beginning after December 15, 2006, were adopted effective January 1, 2007.
We do not expect the adoption of FIN 48 to have a material impact on our consolidated financial position, results of
operations or effective tax rate.
In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements” (“SFAS 157”) which defines fair
value, establishes a framework for measuring fair value in accordance with generally accepted accounting principles
and expands disclosures about fair value measurements. This pronouncement applies to other accounting standards