US Cellular 2009 Annual Report Download - page 61

UNITED STATES CELLULAR CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE 5 INCOME TAXES (Continued)
deferred tax effects of accrued liabilities and the allowance for doubtful accounts on customer
receivables.
U.S. Cellular’s noncurrent deferred income tax assets and liabilities at December 31, 2009 and 2008 and
the temporary differences that gave rise to them were as follows:
December 31, 2009 2008
(Dollars in thousands)
Noncurrent deferred tax assets
Net operating loss (‘‘NOL’’) carryforwards ............... $ 26,884 $ 31,236
Other ......................................... 51,110 29,665
77,994 60,901
Less valuation allowance ........................... (17,977) (23,565)
Total noncurrent deferred tax assets ................... 60,017 37,336
Noncurrent deferred tax liabilities
Licenses/intangibles ............................... 221,754 202,606
Property, plant and equipment ....................... 286,768 258,453
Partnership investments ............................ 61,272 51,059
Other ......................................... 4,217 3,324
Total noncurrent deferred tax liabilities .................. 574,011 515,442
Net noncurrent deferred income tax liability ............... $513,994 $478,106
At December 31, 2009, U.S. Cellular and certain subsidiaries had $486.3 million of state NOL
carryforwards (generating a $22.5 million deferred tax asset) available to offset future taxable income
primarily of the individual subsidiaries which generated the losses. The state NOL carryforwards expire
between 2010 and 2029. Certain subsidiaries which are not included in the federal consolidated income
tax return, but file separate federal tax returns, had federal NOL carryforwards (generating a $4.3 million
deferred tax asset) available to offset future taxable income. The federal NOL carryforwards expire
between 2010 and 2029. A valuation allowance was established for certain state NOL carryforwards and
federal NOL carryforwards since it is more likely than not that a portion of such carryforwards will expire
before they can be utilized.
Effective January 1, 2007, U.S. Cellular adopted new requirements promulgated under GAAP related to
accounting for unrecognized tax benefits. In accordance with these provisions, U.S. Cellular recognized a
cumulative effect adjustment of $1.3 million, increasing its liability for unrecognized tax benefits, interest
and penalties and reducing the January 1, 2007 balance of Retained earnings.
At December 31, 2009, U.S. Cellular had $34.4 million in unrecognized tax benefits which, if recognized,
would reduce income tax expense by $18.9 million, net of the federal benefit from state income taxes. At
December 31, 2008, U.S. Cellular had $27.8 million in unrecognized tax benefits, which, if recognized,
would reduce income tax expense by $15.3 million, net of the federal benefit from state income taxes.
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