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How US Tax Reform Benefited Dish Network’s Income in 4Q17

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Tax reform benefit on Dish’s income

In 4Q17, Dish Network (DISH) earned net income of ~$1.4 billion. This net income included a one-time income tax gain of $1.2 billion associated with the tax provisions resulting from the Tax Cuts and Jobs Act.

According to this tax reform bill, the corporate tax structure has been reduced to 21.0% from the existing 35.0%. Accordingly, the company will consider the federal statutory tax rate of 21.0% going forward.

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Changes in tax structure

The new tax rate will be 8.0–15.5% on income repatriated to the US, instead of the current 35.0%. The reduction in tax rates has benefited numerous telecom and media companies that have invested their cash overseas. 

These companies can bring their holdings back for investment in the US. The change in the tax structure is expected to help boost the US economy, raise wages, and add jobs.

Telecom behemoth AT&T (T) announced that it plans to expand its US investments by $1.0 billion in 2018. The company also rewarded its employees with a special bonus of $1,000 following the announcement of the tax structure revision. 

Verizon (VZ), Comcast (CMCSA), and Disney (DIS) realized tax gains of about $16.8 billion, $12.7 billion, and $1.6 billion, respectively, on net income for the quarter ended December 2017.

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