Dish Network 2006 Annual Report Download - page 118

ECHOSTAR COMMUNICATIONS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued
F–33
Income (Loss), we recognized $55.2 million and $53.3 million in depreciation expense on satellites acquired under
capital lease agreements during the years ended December 31, 2006 and 2005, respectively. During 2004, we did
not recognize any depreciation on the satellites acquired under these capital leases.
Future minimum lease payments under these capital lease obligations, together with the present value of the net
minimum lease payments as of December 31, 2006 are as follows:
For the Year Ending December 31,
2007.................................................................................................................................................................... 86,351$
2008.................................................................................................................................................................... 86,351
2009.................................................................................................................................................................... 86,351
2010.................................................................................................................................................................... 86,351
2011.................................................................................................................................................................... 86,351
Thereafter........................................................................................................................................................... 254,374
Total minimum lease payments.......................................................................................................................... 686,129
Less: Amount representing lease of the orbital location and estimated executory costs (primarily
insurance and maintenance) including profit thereon, included in total minimum lease payments................... (120,660)
Net minimum lease payments............................................................................................................................. 565,469
Less: Amount representing interest.................................................................................................................... (160,527)
Present value of net minimum lease payments.................................................................................................... 404,942
Less: Current portion......................................................................................................................................... (34,701)
Long-term portion of capital lease obligations................................................................................................... 370,241$
Future maturities of our outstanding long-term debt, including the current portion, are summarized as follows:
Payments due by period
Total 2007 2008-2009 2010-2011 Thereafter
(In thousands)
Long-term debt obligations.................................. 6,525,000$ 1,000,000$ 1,000,000$ 1,525,000$ 3,000,000$
Capital lease obligations, mortgages
and other notes payable .................................. 442,321 38,469 87,053 105,593 211,206
Total .................................................................... 6,967,321$ 1,038,469$ 1,087,053$ 1,630,593$ 3,211,206$
6. Income Taxes
As of December 31, 2006, we had net operating loss carryforwards (“NOL’s”) for federal income tax purposes of
$1.641 billion and tax benefits related to credit carryforwards of $41.9 million. We have recorded in 2006, tax benefits
for state NOL carryforwards of $26.3 million. The NOL’s begin to expire in the year 2020 and credit carryforwards
will begin to expire in the year 2010.
Our income tax policy is to record the estimated future tax effects of temporary differences between the tax bases of
assets and liabilities and amounts reported in our Consolidated Balance Sheets, as well as probable operating loss, tax
credit and other carryforwards. We follow the guidelines set forth in SFAS 109 regarding the recoverability of any tax
assets recorded on the balance sheet and provide any necessary valuation allowances as required. In accordance with
SFAS 109, we periodically evaluate our need for a valuation allowance. Determining necessary valuation allowances
requires us to make assessments about historical financial information as well as the timing of future events, including
the probability of expected future taxable income and available tax planning opportunities. During the second quarter
of 2005, we concluded the recoverability of certain of our deferred tax assets was more likely than not and accordingly
reversed the portion of the valuation allowance which was no longer required. As of December 31, 2006, there remains
$4.0 million of valuation allowance which relates to deferred tax assets for credit carryforwards and state income tax
net operating losses which begin to expire in the year 2010.