Dish Network 2008 Annual Report Download - page 119

DISH NETWORK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
F-37
The temporary differences, which give rise to deferred tax assets and liabilities as of December 31, 2008
and 2007, are as follows:
2008 2007
Deferred tax assets:
NOL, credit and other carryforwards .......................................... 7,583$ 196,465$
Unrealized losses on investments ............................................... 108,500 68,602
Accrued expenses ....................................................................... 46,383 68,602
Stock compensation .................................................................... 7,475 10,429
Deferred revenue......................................................................... 59,088 79,189
State taxes net of federal effect.................................................... 5,974 -
Fixed assets and other.................................................................. 88,390 5,876
Other ........................................................................................... 11,316 13,079
Total deferred tax assets ............................................................. 334,709 442,242
Valuation allowance ................................................................... (124,098) -
Deferred tax asset after valuation allowance .............................. 210,611 442,242
Deferred tax liabilities:
Equity method investments ........................................................ - (13,119)
Depreciation and amortization .................................................... (359,831) (439,687)
State taxes net of federal effect.................................................... - (14,060)
Other ........................................................................................... - (19,056)
Total deferred tax liabilities ........................................................ (359,831) (485,922)
Net deferred tax asset (liability) ................................................. (149,220)$ (43,680)$
Current portion of net deferred tax asset (liability) ..................... 86,331$ 342,813$
Noncurrent portion of net deferred tax asset (liability) ............... (235,551) (386,493)
Total net deferred tax asset (liability) ......................................... (149,220)$ (43,680)$
As of December 31,
(In thousands)
Accounting for Uncertainty in Income Taxes
In addition to filing federal income tax returns, we and one or more of our subsidiaries file income tax
returns in all states that impose an income tax and a small number of foreign jurisdictions where we have
immaterial operations. We are subject to U.S. federal, state and local income tax examinations by tax
authorities for the years beginning in 1996 due to the carryover of previously incurred net operating losses.
As of December 31, 2008, no taxing authority has proposed any significant adjustments to our tax
positions. We have no significant current tax examinations in process.
A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in
thousands):
Balance as of January 1, 2008.............................................................. $ 20,160
Additions based on tax positions related to the current year................ 37,583
Reductions based on tax positions related to the current year.............. (36,785)
Additions for tax positions of prior years............................................. 212,402
Balance as of December 31, 2008........................................................ 233,360$
We have $233 million in unrecognized tax benefits that, if recognized, could favorably affect our effective
tax rate. Of this amount, it is reasonably possible that $106 million may be paid or effectively settled
within the next twelve months, depending on the resolution of a change in accounting method filed with
the Internal Revenue Service.
Accrued interest and penalties on uncertain tax positions are recorded as a component of “Other, net” on
our Consolidated Statements of Operations and Comprehensive Income (Loss). During the year ended