XM Radio 2000 Annual Report Download - page 45

RADiO TO THE POWER OF X
XM SATELLiTE RADiO 2000 Annual Report
Taxes on income included in the statements of operations consists of the following (in thousands):
December 31,
1998 1999 2000
Current taxes:
Federal............................................................................ $ —$ —$ —
State .............................................................................. —— —
Total current taxes .......................................................... —— —
Deferred taxes: ....................................................................
Federal............................................................................ —— —
State .............................................................................. —— —
Total deferred taxes ........................................................ —— —
Total tax expense (benefit) ................................................ $ —$ —$ —
A reconciliation of the statutory tax expense, assuming all income is taxed at the statutory rate applicable to the
income and the actual tax expense is as follows (in thousands):
December 31,
1998 1999 2000
Income (loss) before taxes on income,
as reported in the statements of income .................................... $ (16,167) $ (36,896) $ (51,873)
Theoretical tax benefit on the above amount at 35% ........................ $ (5,497) $ (12,545) $ (18,156)
State tax, net of federal benefit ...................................................... (1,059) 462 (2,588)
Increase in taxes resulting from permanent differences, net .............. 30 2,060 562
Adjustments arising from differences in the basis of measurement
for tax purposes and financial reporting purposes and other .......... (706) 13,182 9
Change in valuation allowance ........................................................ 7,232 (3,159) 20,173
Taxes on income for the reported year ............................................ $ — $ — $ —
At December 31, 1998, 1999 and 2000, deferred income tax consists of future tax assets/(liabilities)
attributable to the following (in thousands):
December 31,
1998 1999 2000
Deferred tax assets:
Net operating loss/other tax attribute carryovers .......................... $ 518 $ 2,490 $ 14,716
Start-up costs ............................................................................ 7,460 17,765 40,033
Gross total deferred tax assets .............................................. 7,978 20,255 54,749
Valuation allowance for deferred tax assets ...................................... (7,978) (4,819) (24,992)
Net deferred assets .................................................................... —15,436 29,757
Deferred tax liabilities ....................................................................
Fixed assets .............................................................................. —(51) (15,500)
FCC license .............................................................................. — (10,160) (9,735)
Other intangible assets .............................................................. —(5,225) (4,522)
Net deferred tax liabilities...................................................... —(15,436) (29,757)
Deferred income tax, net ...................................................... $ — $ — $ —
At December 31, 2000, the Company had accumulated net operating losses of $35,892,000 for Federal
income tax purposes that are available to offset future regular taxable income. These operating loss carryforwards
expire between the years 2012 and 2020. Utilization of these net operating losses may be subject to limitations
in the event of significant changes in the stock ownership of the Company.
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