Frontier Communications 2008 Annual Report Download - page 82
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(18) Income Taxes:
The following is a reconciliation of the provision for income taxes for continuing operations computed at
Federal statutory rates to the effective rates for the years ended December 31, 2008, 2007 and 2006:
2008 2007 2006
Consolidated tax provision at federal statutory rate . ..................... 35.0% 35.0% 35.0%
State income tax provisions, net of federal income tax benefit ........... 2.8% 1.8% 2.1%
Tax reserve adjustment ................................................ (1.4)% 1.0% 0.2%
All other, net.......................................................... 0.4% (0.4)% (2.4)%
36.8% 37.4% 34.9%
The components of the net deferred income tax liability (asset) at December 31 are as follows:
($ in thousands) 2008 2007
Deferred income tax liabilities:
Property, plant and equipment basis differences ......................... $642,598 $624,426
Intangibles............................................................ 248,520 275,102
Other, net ............................................................ 15,946 10,431
907,064 909,959
Deferred income tax assets:
SFAS No. 158 pension/OPEB liability ................................. 146,997 58,587
Tax operating loss carryforward. . ...................................... 72,434 83,203
Alternative minimum tax credit carryforward ........................... — 26,658
Employee benefits .................................................... 62,482 68,791
State tax liability...................................................... 7,483 10,361
Accrued expenses ..................................................... 19,726 14,818
Bad debts. ............................................................ 12,026 4,971
Other, net ............................................................ 14,550 12,700
335,698 280,089
Less: Valuation allowance........................................... (67,331) (59,566)
Net deferred income tax asset . . . ...................................... 268,367 220,523
Net deferred income tax liability .................................... $638,697 $689,436
Deferred tax assets and liabilities are reflected in the following
captions on the consolidated balance sheet:
Deferred income taxes .............................................. $670,489 $711,645
Other current assets . . ............................................... (31,792) (22,209)
Net deferred income tax liability . . . ............................. $638,697 $689,436
Our state tax operating loss carryforward as of December 31, 2008 is estimated at $952.3 million. A
portion of our state loss carryforward begins to expire in 2009.
F-31
FRONTIER COMMUNICATIONS CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements