Cincinnati Bell 2009 Annual Report Download - page 155
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Except for indemnification amounts recorded in relation to the sale of its national broadband business in 2003,
the Company has not recorded a liability for these indemnities, commitments, and other guarantees in the
Consolidated Balance Sheets.
12. Income Taxes
Income tax expense consists of the following:
Year Ended December 31,
(dollars in millions) 2009 2008 2007
Current:
Federal ................................................... $ 2.5 $ 3.5 $ 3.0
State and local ............................................. 1.5 2.8 2.4
Total current .............................................. 4.0 6.3 5.4
Investment tax credits ......................................... (0.3) (0.4) (0.4)
Deferred:
Federal ................................................... 59.8 64.7 48.7
State and local ............................................. 6.9 70.1 13.7
Total deferred ............................................. 66.7 134.8 62.4
Valuation allowance .......................................... (5.7) (67.1) (10.7)
Total ...................................................... $64.7 $ 73.6 $ 56.7
The following is a reconciliation of the statutory federal income tax rate with the effective tax rate for each
year:
Year Ended December 31,
2009 2008 2007
U.S. federal statutory rate ....................................... 35.0% 35.0% 35.0%
State and local income taxes, net of federal income tax ............... 1.3 3.3 4.5
Change in valuation allowance, net of federal income tax .............. (2.4) (24.7) (5.3)
Expiring state net operating loss ................................. 2.3 24.1 —
Nondeductible interest expense .................................. 3.8 3.7 6.5
Other differences, net .......................................... 1.9 0.4 3.0
Effective tax rate ............................................. 41.9% 41.8% 43.7%
Income tax recognized by the Company in the income statement, other comprehensive income, and retained
earnings consists of the following:
Year Ended December 31,
(dollars in millions) 2009 2008 2007
Income tax provision (benefit) related to:
Continuing operations .................................. $64.7 $ 73.6 $56.7
Other comprehensive income (loss) ....................... 24.2 (36.2) 34.1
Excess tax benefits or stock option exercises ................ — 0.4 (0.5)
Implementation of ASC 740 ............................. — — 5.1
85
Form 10-K