Comcast 2008 Annual Report Download - page 67

Components of Net Deferred Tax Liability
December 31 (in millions) 2008 2007
Deferred Tax Assets:
Net operating loss carryforwards $ 220 $ 252
Differences between book and tax basis
of long-term debt 153 163
Nondeductible accruals and other 1,351 1,225
1,724 1,640
Deferred Tax Liabilities:
Differences between book and tax basis
of property and equipment and
intangible assets 27,354 25,935
Differences between book and tax basis
of investments 588 1,542
Differences between book and tax basis
of indexed debt securities 472 829
28,414 28,306
Net deferred tax liability $ 26,690 $ 26,666
Changes in net deferred income tax liabilities in 2008 that were not
recorded as deferred income tax expense relate to reductions in
deferred income tax liabilities of $79 million associated with
acquisition-related purchase price allocations, of $365 million
related to the settlement of an uncertain tax position of an
acquired entity and of $27 million associated with items included in
other comprehensive income (loss).
Net deferred tax assets included in current assets are primarily
related to our current investments and current liabilities. As of
December 31, 2008, we had federal net operating loss carryfor-
wards of $229 million and various state net operating loss
carryforwards that expire in periods through 2028. The determi-
nation of the state net operating loss carryforwards is dependent
on our subsidiaries’ taxable income or loss, apportionment
percentages, and state laws that can change from year to year
and impact the amount of such carryforwards.
In 2008, 2007 and 2006, income tax benefits attributable to share-
based compensation of approximately $28 million, $49 million and
$60 million, respectively, were allocated to stockholders’ equity.
Uncertain Tax Positions
We adopted FIN 48 on January 1, 2007, at which time we
recorded a cumulative effect adjustment increasing retained earn-
ings by $60 million. Our uncertain tax positions as of
December 31, 2008 totaled $1.45 billion, excluding the federal
benefits on state tax positions that have been recorded as
deferred income taxes. If we were to recognize the tax benefit for
such positions in the future, approximately $1.2 billion would
impact our effective tax rate with the remaining amount impacting
deferred income taxes.
Reconciliation of Unrecognized Tax Benefits
(in millions) 2008 2007
Balance as of January 1 $ 1,921 $ 2,099
Additions based on tax positions related to
the current year 55 65
Additions based on tax positions related to
prior years 30 18
Reductions for tax positions of prior years (411) (157)
Reductions due to expiration of statute of
limitations (3) (3)
Settlements with taxing authorities (142) (101)
Balance as of December 31 $ 1,450 $ 1,921
As of December 31, 2008 and 2007, we had accrued approx-
imately $787 million and $766 million, respectively, of interest
associated with our uncertain tax positions.
During 2008, we recognized approximately $411 million of income
taxbenefitsasaresultofthesettlement of an uncertain tax posi-
tion of an acquired entity. The tax position related to the
deductibility of certain costs incurred in connection with a business
acquisition. The primary impacts of the settlement were reductions
to our deferred income tax and other long-term liabilities of
approximately $542 million, a reduction to goodwill of approx-
imately $477 million and a reduction to income tax expense of
approximately $65 million.
We are litigating an uncertain tax position which is scheduled for
trial in October 2009. As a result, it is reasonably possible that our
uncertain tax positions could significantly change within the next
12 months. We are unable to estimate the range of possible
change.
During 2007, the Internal Revenue Service (“IRS”) completed its
examination of our income tax returns for the years 2000 through
2004. The IRS proposed certain adjustments that relate primarily
to certain financing transactions. We are currently disputing those
proposed adjustments, but if the adjustments are sustained, they
would not have a material impact on our effective tax rate. The IRS
is currently examining our 2005 and 2006 tax returns and various
states are currently conducting examinations of our income tax
returns for years through 2007. In addition, the statutes of limi-
tations could expire for certain of our tax returns over the next 12
months, which could result in decreases to our uncertain tax posi-
tions. These adjustments are not expected to have a material
impact on our effective tax rate.
65 Comcast 2008 Annual Report on Form 10-K