Comcast 2009 Annual Report Download - page 74

Table of Contents
65
Comcast 2009 Annual Report on Form 10-
K
Components of Net Deferred Tax Liability
Changes in net deferred income tax liabilities in 2009 that
were not recorded as deferred income tax expense are
related to increases of approximately $37 million associated
with items included in other comprehensive income (loss).
Our net deferred tax liability includes approximately $23
billion related to franchise rights that will remain unchanged
unless we recognize an impairment or dispose of a franchise.
Net deferred tax assets included in current assets are
primarily related to our current investments and current
liabilities. As of December 31, 2009, we had federal net
operating loss carryforwards of $185 million and various state
net operating loss carryforwards that expire in periods
through 2029. The determination 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. We recognize a valuation allowance if
we determine it is more likely than not that some portion, or
all, of a deferred tax asset will not be realized. As of
December 31, 2009 and 2008, our valuation allowance was
related primarily to state net operating loss carryforwards. In
2009, 2008 and 2007, income tax benefits attributable to
share-based compensation of approximately $14 million, $28
million, and $49 million, respectively, were allocated to
shareholders’ equity.
Uncertain Tax Positions
On January 1, 2007, we recorded a cumulative effect
adjustment related to the adoption of new accounting
guidance related to uncertain tax positions that increased
retained earnings by $60 million. Our uncertain tax positions
as of December 31, 2009
December 31 (in millions)
2009
2008
Deferred Tax Assets:
Net operating loss
carryforwards
$
375
$
445
Differences between book and
tax basis of long
-
term debt
137
153
Nondeductible accruals and
other
1,188
1,351
Less: Valuation allowance
(214
)
(225
)
1,486
1,724
Deferred Tax Liabilities:
Differences between book and
tax basis of property and
equipment and intangible
assets
27,870
27,354
Differences between book and
tax basis of investments
662
588
Differences between book and
tax basis of indexed debt
securities
514
472
29,046
28,414
Net deferred tax liability
$
27,560
$
26,690
totaled $1.185 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 $941 million would
impact our effective tax rate with the remaining amount
increasing our deferred income tax liability.
Reconciliation of Unrecognized Tax Benefits
As of December 31, 2009 and 2008, we had accrued
approximately $519 million and $787 million, respectively, of
interest associated with our uncertain tax positions.
During 2009, we recognized approximately $566 million of
income tax benefits primarily due to the recognition of tax
benefits associated with uncertain tax positions and related
interest, and certain subsidiary reorganizations. The primary
impacts of these adjustments were reductions to our deferred
income tax and other long-term liabilities. During 2008, we
recognized approximately $411 million of income tax benefits
as a result of the settlement of an uncertain tax position 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 approximately $477 million and a reduction to
income tax expense of approximately $65 million.
The Internal Revenue Service (“IRS”) and various states are
currently examining our 2007 and 2008 tax returns. During
2009, the IRS completed its examination of our income tax
returns for 2005 and 2006. During 2007, the 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.
(in millions)
2009
2008
2007
Balance as of
January 1
$
1,450
$
1,921
$
2,099
Additions based on
tax positions
related to the
current year
57
55
65
Additions based on
tax positions
related to prior
years
—
30
18
Reductions for tax
positions of prior
years
(257
)
(411
)
(157
)
Reductions due to
expiration of statute
of limitations
—
(
3
)
(3
)
Settlements with
taxing authorities
(65
)
(142
)
(101
)
Balance as of
December 31
$
1,185
$
1,450
$
1,921