Dish Network 2014 Annual Report Download - page 82

Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS - Continued
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2013. The increase in capitalized interest during 2013 resulted from the March 9, 2012 acquisition of DBSD North
America and TerreStar and development of this wireless spectrum.
Other, net. “Other, net” income totaled $385 million during the year ended December 31, 2013, an increase of $211
million compared to the same period in 2012. This change primarily resulted from net realized and/or unrealized gains
of $390 million on our marketable investment securities and derivative financial instruments during 2013 compared to
net gains of $122 million in 2012. In addition, the year ended December 31, 2012 was positively impacted by the non-
cash gain of $99 million related to the conversion of our DBSD North America 7.5% Convertible Senior Secured
Notes due 2009 in connection with the completion of the DBSD Transaction and negatively impact by $49 million in
impairment charges.
Adjusted earnings before interest, taxes, depreciation and amortization. Adjusted EBITDA was $2.805 billion
during the year ended December 31, 2013, an increase of $397 million or 16.5% compared to the same period in 2012.
Adjusted EBITDA for the year ended December 31, 2013 was negatively impacted by the $438 million impairment
charge for the T2 and D1 satellites during the second quarter 2013. The year ended December 31, 2012 was
negatively impacted by $730 million of “Litigation expense” related to the Voom Settlement Agreement. The
following table reconciles Adjusted EBITDA to the accompanying financial statements.
2013 2012
Adjusted EBITDA................................................................................................... 2,804,807$ 2,407,486$
Interest, net............................................................................................................ (596,120) (437,145)
Income tax (provision) benefit, net........................................................................ (299,826) (331,991)
Depreciation and amortization............................................................................... (1,054,026) (964,484)
Income (loss) from continuing operations attributable to DISH Network............... 854,835$ 673,866$
Plus: Income (loss) from discontinued operations, net of tax............................... (47,343) (37,179)
Net income (loss) attributable to DISH Network..................................................... 807,492$ 636,687$
For the Years Ended December 31,
(In thousands)
Adjusted EBITDA is not a measure determined in accordance with GAAP and should not be considered a substitute
for operating income, net income or any other measure determined in accordance with GAAP. Adjusted 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, Adjusted EBITDA measures the
amount of income from continuing operations generated each period that could be used to service debt, pay taxes
and fund capital expenditures. Adjusted 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 $300 million during the year ended December
31, 2013, a decrease of $32 million compared to the same period in 2012. The decrease in the provision was
primarily related to a decrease in our effective tax rate, partially offset by the increase in “Income (loss) before
income taxes.” Our effective tax rate was favorably impacted by the $102 million reversal of an uncertain tax
position that was resolved during the third quarter 2013.
Net income (loss) attributable to DISH Network. “Net income (loss) attributable to DISH Network” was $807
million during the year ended December 31, 2013, an increase of $170 million compared to $637 million for the
same period in 2012. This increase was primarily attributable to the changes in revenue and expenses discussed
above.