Dish Network 2007 Annual Report Download - page 57

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Table of Contents
The following table reconciles EBITDA to the accompanying financial statements:
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.
Income tax benefit (provision), net.
Our income tax provision was $314.7 million during the year ended December 31, 2006 compared to a
benefit of $507.4 million during 2005. The income tax benefit for the year ended December 31, 2005 included credits of $592.8 million and
$322.0 million to our provision for income taxes resulting from the reversal and current year activity, respectively, of our recorded valuation
allowance. The year ended December 31, 2006 includes a credit of $13.5 million related to the recognition of state net operating loss
carryforwards (“NOLs”) for prior periods. In addition, the year ended December 31, 2006, includes a credit of $8.3 million related to amended
state filings. During 2007, we expect our income tax provision to reflect statutory Federal and state tax rates.
Net income (loss).
Net income was $608.3 million during the year ended December 31, 2006, a decrease of $906.3 million compared to
$1.515 billion in 2005. Net income for the year ended December 31, 2005 was favorably impacted by the $914.8 million reversal of our
recorded valuation allowance for deferred tax assets and the $134.0 million “Gain on insurance settlement.” Net income for the year ended
December 31, 2006 was unfavorably impacted by the Tivo litigation charge discussed above.
49
Item 7.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS —
Continued
For the Years Ended
December 31,
2006
2005
(In thousands)
EBITDA
$
2,369,058
$
2,142,990
Less:
Interest expense, net
331,749
330,326
Income tax provision (benefit), net
314,743
(507,449
)
Depreciation and amortization
1,114,294
805,573
Net income (loss)
$
608,272
$
1,514,540
For the Years
Ended December 31,
2006
2005
(In thousands)
Adjusted income tax benefit (provision), net
$
(338,514
)
$
(378,687
)
Less:
Valuation allowance reversal
—
(
592,804
)
Current year valuation allowance activity
(7,324
)
(321,982
)
Deferred tax asset for filed returns
5,319
28,650
Prior period adjustments to state NOLs
(13,461
)
—
Amended state filings
(8,305
)
—
Income tax benefit (provision), net
$
(314,743
)
$
507,449