DIRECTV 2004 Annual Report Download - page 92

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THE DIRECTV GROUP, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (continued)
The income tax benefit was different than the amount computed using the U.S. federal statutory income tax rate for the reasons
set forth in the following table:
2004
2003
2002
(Dollars in Millions)
Expected benefit at U.S. federal statutory income tax rate
$
(616.0
)
$
(167.2
)
$
(54.4
)
U.S. state and local income tax benefit
(57.5
)
(2.9
)
(2.4
)
Resolution of tax contingencies
(0.4
)
(48.0
)
(98.0
)
Tax basis differences attributable to divestitures
(8.9
)
—
—
Minority interests in partnership losses
4.6
—
—
Non-deductible goodwill and intangible assets
—
20.4
—
Foreign taxes, net of credits
(6.3
)
22.4
55.9
Extraterritorial income exclusion and foreign sales corporation tax benefit
(1.7
)
(2.8
)
(3.5
)
Change in valuation allowance
(14.6
)
62.3
58.6
Transaction costs and other
10.2
11.5
1.6
Total income tax benefit
$
(690.6
)
$
(104.3
)
$
(42.2
)
Temporary differences and carryforwards which gave rise to deferred tax assets and liabilities at December 31 were as follows:
2004
2003
Deferred
Tax
Assets
Deferred
Tax
Liabilities
Deferred
Tax
Assets
Deferred
Tax
Liabilities
(Dollars in Millions)
Accruals and advances
$
254.3
$
44.5
$
299.5
$
43.3
Prepaid expenses
—
36.1
—
225.3
State taxes
—
38.5
1.4
—
Gain on PanAmSat merger
—
—
—
171.6
Depreciation, amortization and asset impairment charges
390.3
—
—
360.2
Net operating loss and tax credit carryforwards
753.4
—
645.7
—
Programming contract liabilities
144.4
—
150.1
—
Unrealized gains on securities
—
14.5
—
177.7
Tax basis differences in investments and affiliates
28.9
423.5
78.1
323.5
Other
47.0
6.4
166.0
39.9
Subtotal
1,618.3
563.5
1,340.8
1,341.5
Valuation allowance
(214.6
)
—
(164.1
)
—
Total deferred taxes
$
1,403.7
$
563.5
$
1,176.7
$
1,341.5
Included in “Prepaid expenses and other” in the Consolidated Balance Sheets are $177.7 million and $51.8 million of current
deferred tax assets at December 31, 2004 and 2003, respectively, and included in “Investments and Other Assets” in the
Consolidated Balance Sheets is $662.5 million of non-current deferred tax assets at December 31, 2004.
We assessed the deferred tax assets for the respective periods for recoverability and, where applicable, we recorded a valuation
allowance to reduce the total deferred tax assets to an amount that will, more likely than not, be realized in the future.
83