Metro PCS 2011 Annual Report Download - page 132

MetroPCS Communications, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2011, 2010 and 2009
F-26
2011 2010
Deferred tax assets:
Net operating loss carryforward $ 604,402 $ 361,617
Deferred revenue 17,065 19,050
Allowance for uncollectible accounts — 1,154
Deferred rent 38,963 33,420
Deferred compensation 57,594 56,157
Asset retirement obligation 6,479 4,770
Credit carryforwards 18,081 12,747
Other comprehensive loss 7,493 3,171
Capital loss limitation 7,388 7,410
Transaction taxes 3,896 5,498
Unrealized loss on investments 39,751 39,871
Other 13,126 14,779
Gross deferred tax assets 814,238 559,644
Valuation allowance (47,810)(47,158)
Total deferred tax assets, net 766,428 512,486
Deferred tax liabilities:
Depreciation (1,030,016)(655,566)
Deferred costs (28,976)(32,332)
FCC licenses (370,082)(326,954)
Partnership interest (142,439)(130,679)
Other (4,807)(3,723)
Deferred tax liabilities (1,576,320)(1,149,254)
Net deferred tax liability $ (809,892) $ (636,768)
Deferred tax assets and liabilities at December 31, 2011 and 2010 are as follows (in thousands):
2011 2010
Current deferred tax asset $ 7,214 $ 6,290
Non-current deferred tax liability (817,106)(643,058)
Net deferred tax liability $ (809,892) $ (636,768)
At December 31, 2011 the Company has approximately $1.7 billion and $344.6 million of financial reporting net
operating loss carryforwards for federal and state income tax purposes, respectively. The Company has no current federal
income tax liability as of December 31, 2011 and 2010. The Company's net operating loss carryforwards for federal and state
tax purposes were approximately $133.1 million and $87.3 million, respectively, greater than its net operating loss
carryforwards for financial reporting purposes due to the Company's inability to realize excess tax benefits under ASC 718 until
such benefits reduce income taxes payable. The federal net operating loss will begin to expire in 2023. The state net operating
losses will begin to expire in 2013. At December 31, 2011 the Company has approximately $0.1 million of alternative
minimum tax credit carryforwards for state income tax purposes. These alternative minimum tax credits carryforward
indefinitely.
Financial statement deferred tax assets must be reduced by a valuation allowance if, based on the weight of available
evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. The Company
believes that realization of the deferred tax assets is more likely than not based on the future reversal of existing temporary
differences which give rise to the deferred tax liabilities, with the exception of the deferred tax asset related to the unrealized
loss on investments. During 2009, an impairment of investments was recorded for financial statement purposes resulting in an
unrealized loss on investments. Recognition of this unrealized loss for tax purposes would result in a capital loss. The
Company has not generated capital gains within the carryback period and does not anticipate, at this time, generating sufficient
capital gains within the carryforward period to realize this deferred tax asset. Therefore, the Company has a valuation
allowance of $47.8 million and $47.2 million, respectively, as of December 31, 2011 and 2010.