Dish Network 2015 Annual Report Download - page 145

DISH NETWORK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
F-41
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
2002 due to the carryover of previously incurred NOLs. We are currently under a federal income tax examination
for fiscal years 2008 through 2012.
A reconciliation of the beginning and ending amount of unrecognized tax benefits included in “Long-term deferred
revenue, distribution and carriage payments and other long-term liabilities” on our Consolidated Balance Sheets was
as follows:
For the Years Ended December 31,
Unrecognized tax benefit 2015 2014 2013
(In thousands)
Balance as of beginning of period $ 207,675 $ 151,353 $ 328,951
Additions based on tax positions related to the current year 135,937 69,643 12,736
Additions based on tax positions related to prior years 22,483 55,761 66,307
Reductions based on tax positions related to prior years (22,697) (18,646) (104,796)
Reductions based on tax positions related to settlements with taxing authorities (2,648) (42,023) (139,022)
Reductions based on tax positions related to the lapse of the statute of limitations (4,817) (8,413) (12,823)
Balance as of end of period $ 335,933 $ 207,675 $ 151,353
We have $199 million in unrecognized tax benefits that, if recognized, could favorably affect our effective tax rate.
We do not expect any material portion of this amount to be paid or settled within the next twelve months. During
2012, as a result of the DBSD Transaction and TerreStar Transaction, we recognized the acquired assets and
assumed liabilities based on our estimates of fair value at their acquisition date, including $102 million in an
uncertain tax position in “Long-term deferred revenue, distribution and carriage payments and other long-term
liabilities” on our Consolidated Balance Sheets. Subsequently, during 2013, this uncertain tax position was resolved
and $102 million, reflected in the table above, was reversed and recorded as a decrease in “Income tax (provision)
benefit, net” on our Consolidated Statements of Operations and Comprehensive Income (Loss) for the year ended
December 31, 2013.
Accrued interest and penalties on uncertain tax positions are recorded as a component of “Interest expense, net of
amounts capitalized” and “Other, net,” respectively, on our Consolidated Statements of Operations and
Comprehensive Income (Loss). During the year ended December 31, 2015, we recorded $3 million in net interest
and penalty expense to earnings. During the year ended December 31, 2014, we recorded a credit of $3 million in
net interest and penalty expense to earnings. During the year ended December 31, 2013, we recorded $4 million in
net interest and penalty expense to earnings. Accrued interest and penalties were $15 million and $10 million at
December 31, 2015 and 2014, respectively. The above table excludes these amounts.
12. Stockholders’ Equity (Deficit)
Capital Stock and Additional Paid-In Capital
Our certificate of incorporation authorizes the following capital stock: (i) 1,600,000,000 shares of Class A common
stock, par value $0.01 per share; (ii) 800,000,000 shares of Class B common stock, par value $0.01 per share;
(iii) 800,000,000 shares of Class C common stock, par value $0.01 per share; and (iv) 20,000,000 shares of preferred
stock, par value $0.01 per share. As of December 31, 2015 and 2014, there were no outstanding shares of Class C
common stock or preferred stock.