XM Radio 2013 Annual Report Download - page 127
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COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Dollar amounts in thousands, unless otherwise stated)
The following table indicates the significant elements contributing to the difference between the federal tax
expense (benefit) at the statutory rate and at our effective rate:
For the Years Ended December 31,
2013 2012 2011
Federal tax expense, at statutory rate ................... $222,982 $ 166,064 $ 154,418
State income tax expense, net of federal benefit .......... 19,031 16,606 15,751
State income rate changes ........................... 8,666 2,251 3,851
Non-deductible expenses ............................ 9,545 477 457
Change in valuation allowance ........................ (4,228) (3,195,651) (166,452)
Other, net ........................................ 3,881 12,019 6,209
Income tax expense (benefit) ....................... $259,877 $(2,998,234) $ 14,234
The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and
deferred tax liabilities are presented below:
For the Years Ended December 31,
2013 2012
Deferred tax assets:
Net operating loss carryforwards .......................... $2,207,583 $ 2,493,239
GM payments and liabilities .............................. 1,984 80,742
Deferred revenue ...................................... 606,430 511,700
Severance accrual ...................................... 388 46
Accrued bonus ........................................ 25,830 23,798
Expensed costs capitalized for tax ......................... 22,679 26,569
Loan financing costs .................................... 664 428
Investments ........................................... 45,078 39,915
Stock based compensation ............................... 71,794 64,636
Other ................................................ 31,735 34,705
Total deferred tax assets ............................... 3,014,165 3,275,778
Deferred tax liabilities:
Depreciation of property and equipment .................... (188,675) (185,007)
FCC license .......................................... (778,152) (772,550)
Other intangible assets .................................. (233,983) (165,227)
Total deferred tax liabilities ............................ (1,200,810) (1,122,784)
Net deferred tax assets before valuation allowance .............. 1,813,355 2,152,994
Valuation allowance ...................................... (7,831) (9,835)
Total net deferred tax asset ............................... $1,805,524 $ 2,143,159
The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income
during the periods in which those temporary differences can be carried forward under tax law. Management’s
evaluation of the realizability of deferred tax assets considers both positive and negative evidence, including
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