Cricket Wireless 2010 Annual Report Download - page 130

The components of the Company’s deferred tax assets (liabilities) are summarized as follows (in thousands):
2010 2009
As of December 31,
Deferred tax assets:
Net operating loss carryforwards .............................. $794,601 $ 559,912
Wireless licenses .......................................... 26,750 33,780
Capital loss carryforwards ................................... 3,045 1,510
Reserves and allowances . ................................... 12,329 16,006
Share-based compensation ................................... 38,086 31,053
Deferred charges .......................................... 46,329 39,583
Investments and deferred tax on unrealized losses ................. — 9,669
Intangible Assets .......................................... 10,982 —
Goodwill ............................................... 43,792 —
Other .................................................. 5,317 7,630
Gross deferred tax assets . . . ................................... 981,231 699,143
Deferred tax liabilities:
Intangible assets .......................................... — (12,903)
Property and equipment . . ................................... (265,737) (151,868)
Other .................................................. (5,032) (513)
Net deferred tax assets ....................................... 710,462 533,859
Valuation allowance ......................................... (708,479) (531,826)
Other deferred tax liabilities:
Wireless licenses .......................................... (279,327) (236,409)
Goodwill ............................................... — (13,540)
Investment in joint ventures .................................. (10,608) (6,398)
Net deferred tax liabilities . . ................................... $(287,952) $(254,314)
Deferred tax assets (liabilities) are reflected in the accompanying consolidated balance sheets as follows (in
thousands):
2010 2009
As of December 31,
Current deferred tax assets (included in other current assets) ........... $ 7,751 $ 5,198
Long-term deferred tax liabilities................................ (295,703) (259,512)
$(287,952) $(254,314)
Except with respect to the $2.0 million TMT credit outstanding as of December 31, 2010 and 2009, the
Company established a full valuation allowance against its net deferred tax assets due to the uncertainty surrounding
the realization of such assets. The valuation allowance is based on available evidence, including the Company’s
historical operating losses. Deferred tax liabilities associated with wireless licenses and investments in certain joint
ventures cannot be considered a source of taxable income to support the realization of deferred tax assets because
these deferred tax liabilities will not reverse until some indefinite future period. Since it has recorded a valuation
allowance against the majority of its deferred tax assets, the Company carries a net deferred tax liability on its
balance sheet. During the year ended December 31, 2010, the Company recorded a $176.7 million increase to its
valuation allowance, which primarily consisted of $152.2 million and $13.3 million related to the impact of 2010
124
LEAP WIRELESS INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)