XM Radio 2001 Annual Report Download - page 54

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52 XM SATELLiTE RADiO 2 0 0 1 Annual Report
(13) Income Taxes
For the period from December 15, 1992 (date of inception) to October 8, 1999, the Company filed consolidated
federal and state tax returns with its majority stockholder Motient. The Company generated net operating losses
and other deferred tax benefits that were not utilized by Motient. As no formal tax sharing agreement has been
finalized, the Company was not compensated for the net operating losses. Had the Company filed on a stand-alone
basis for the three-year period ending December 31, 2001, the Company’s tax provision would be as follows:
Taxes on income included in the Statements of Operations consists of the following (in thousands):
December 3 1,
1999 20 00 20 01
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 3 1,
1999 20 00 20 01
Income (loss) before taxes on income,
as reported in the statements of income ..... $ (36,896 ) $ (51,873) $ (284,380)
Theoretical tax benefit on the above
amount at 35% ......................................... (12,545) (18,156) (99,533)
State tax, net of federal benefit ..................... 462 (2,588) (13,225)
Increase in taxes resulting from permanent
differences, net ......................................... 2,060 562 2,701
Adjustments arising from differences
in the basis of measurement for tax purposes
and financial reporting purposes and other ... 13,182 9 —
Change in valuation allowance ....................... (3,159) 20,173 11 0,057
Taxes on income for the reported year ........... $ — $ —$—
AMERiCA’S FiRST SATELLiTE RADiO SERViCE
81690_XM2001_AR_Financials 4/9/02 12:33 PM Page 34