Dish Network 2008 Annual Report Download - page 59

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Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS - Continued
49
Other, net. “Other, net” expense totaled $169 million during the year ended December 31, 2008, an increase of $113
million compared to the same period in 2007. This change primarily resulted from an increase of $191 million related
to impairments of marketable investment securities, partially offset by a gain of $53 million on the sale of a non-
marketable investment and a $33 million decline in unrealized losses and impairments on our other investment
securities.
Earnings before interest, taxes, depreciation and amortization. EBITDA was $2.888 billion during the year ended
December 31, 2008, an increase of $41 million or 1.4% compared to the same period in 2007. EBITDA for the year
ended December 31, 2008 was negatively impacted by changes in revenue and expenses discussed above, including the
$113 million increase in “Other” expense. The following table reconciles EBITDA to the accompanying financial
statements.
2008 2007
EBITDA............................................................... 2,887,697$ 2,847,010$
Less:
Interest expense, net .......................................... 318,661 267,447
Income tax provision (benefit), net..................... 665,859 494,099
Depreciation and amortization........................... 1,000,230 1,329,410
Net income (loss).................................................. 902,947$ 756,054$
For the Years Ended
December 31,
(In thousands)
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 pay-TV
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 (provision) benefit, net. Our income tax provision was $666 million during the year ended December
31, 2008, an increase of $172 million compared to the same period in 2007. The increase was primarily due to the
increase in “Income (loss) before income taxes” and in our effective tax rate during the period. The increase in our
effective tax rate was primarily due to the establishment of an $80 million valuation allowance against deferred tax
assets, which are capital in nature, related to the impairment of marketable and non-marketable investment securities
in 2008.
Net income (loss). Net income was $903 million during the year ended December 31, 2008, an increase of $147
million compared to $756 million in 2007. The increase was primarily attributable to the changes in revenue and
expenses discussed above.