Dish Network 2011 Annual Report Download - page 68

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Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS - Continued
58
58
General and administrative expenses. “General and administrative expenses” totaled $1.234 billion during the year
ended December 31, 2011, a $609 million increase compared to the same period in 2010. This increase was primarily
due to an increase in personnel, building and maintenance and other administrative costs associated with our
Blockbuster operations which commenced April 26, 2011.
Litigation expense. “Litigation expense” totaled a negative $317 million during the year ended December 31, 2011,
a reduction in expense of $542 million compared to the same period in 2010. See Note 16 in the Notes to our
Consolidated Financial Statements in Item 15 of this Annual Report on Form 10-K for further discussion.
Depreciation and amortization. “Depreciation and amortization” expense totaled $922 million during the year ended
December 31, 2011, a $62 million or 6.3% decrease compared to the same period in 2010. This change in
“Depreciation and amortization” expense was primarily due to a decrease in depreciation on equipment leased to
subscribers principally related to less equipment capitalization during 2011 compared to the same period in 2010 and
less equipment write-offs from disconnecting subscribers. This decrease was partially offset by an increase in
depreciation on satellites as a result of EchoStar XIV and EchoStar XV being placed into service during the second and
third quarters 2010, respectively.
Interest expense, net of amounts capitalized. “Interest expense, net of amounts capitalized” totaled $558 million
during the year ended December 31, 2011, an increase of $103 million or 22.7% compared to the same period in 2010.
This change primarily resulted from an increase in interest expense related to the issuance of our 6 3/4% Senior
Notes due 2021 during the second quarter 2011 and a decrease in the amount of interest capitalized, partially offset
by a decrease in interest expense as a result of the repurchases and redemptions of our 6 3/8% Senior Notes due
2011.
Earnings before interest, taxes, depreciation and amortization. EBITDA was $3.857 billion during the year ended
December 31, 2011, an increase of $901 million or 30.5% compared to the same period in 2010. The following table
reconciles EBITDA to the accompanying financial statements.
2011 2010
EBITDA.................................................................. 3,856,542$ 2,955,786$
Interest expense, net............................................... (523,556) (429,619)
Income tax (provision) benefit, net........................ (895,006) (557,473)
Depreciation and amortization............................... (922,073) (983,965)
Net income (loss) attributable to DISH Network..... 1,515,907$ 984,729$
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 (“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 $895 million during the year ended December
31, 2011, an increase of $338 million compared to the same period in 2010. The increase in the provision was
primarily related to the increase in “Income (loss) before income taxes.”
Net income (loss) attributable to DISH Network. “Net income (loss) attributable to DISH Network” was $1.516
billion during the year ended December 31, 2011, an increase of $531 million compared to $985 million for the
same period in 2010. The increase was primarily attributable to the changes in revenue and expenses discussed
above.