XM Radio 2001 Annual Report Download - page 55

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XM SATELLiTE RADiO 2 001 Annual Report
At December 31, 1999, 2000 and 2001, deferred income tax consists of future tax assets/ (liabilities) attributable
to the following (in thousands):
December 3 1,
1999 20 00 20 01
Deferred tax assets:
Net operating loss/ other tax attribute
carryovers ............................................. $ 2,490 $ 14,71 6 $ 60 ,369
Start-up costs ........................................... 17,765 40 ,033 99,822
Other deferred tax assets ......................... — — 18,886
Gross total deferred tax assets ............... 20 ,255 54,749 179,077
Valuation allowance for deferred tax assets ... (4,81 9) (24,992) (135,049)
Net deferred assets ............................... 15,436 29,757 44,028
Deferred tax liabilities:
Fixed assets ............................................. (51) (15,500) (29,437)
DARS license............................................. (10,160) (9,735) (9,67 0)
Other intangible assets ............................. (5,225) (4,522) (4,921)
Net deferred tax liabilities ....................... (15,436) (29,757) (44,028)
Deferred income tax, net ....................... $ — $ — $ —
At December 31, 2001, the Company had accumulated net operating losses of $150,884,000 for Federal income
tax purposes that are available to offset future regular taxable income. These operating loss carryforwards
expire between the years 2012 and 2021. Utilization of these net operating losses are subject to limitations
because there have been significant changes in the stock ownership of the Company. In assessing the realizability
of deferred tax assets, management considers whether it is more likely than not that some portion or all of the
deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the
generation of future taxable income during the periods in which those temporary differences become deductible.
Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax
planning strategies in making this assessment.
(14) Supplemental Cash Flows Disclosures
The Company paid $0, $11,198,000, and $9,1 74,000 for interest (net of amounts capitalized) during 1999,
2000, and 2001, respectively. Additionally, the Company incurred the following non-cash financing and investing
activities (in thousands):
December 3 1,
1999 20 00 20 01
Increase in DARS license, goodwill and intangibles ...... $ 51,624 $ —$—
Liabilities exchanged for new convertible note to
related parties ...................................................... 8 1,676 — —
Non-cash capitalized interest ....................................... 15,162 16,302 4,571
Accrued system milestone payments ........................... 15 ,500 30 ,192 37,775
Systems under construction placed into service .......... — — 1,000,228
Property acquired through capital leases ..................... 470 1,688 6,177
Conversion of debt to equity ....................................... 353,315 — 50,992
Use of deposit/ escrow for terrestrial repeater
contracts ............................................................ — 3,422 80,4 31
Interest converted into principal note balance............... 4,601 — —
Accrued expenses transferred to loan balance ............. 7,405 — —
FiNANCiALS 2001
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