American Home Shield 2008 Annual Report Download - page 97
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Table of Contents
Notes to the Consolidated Financial Statements (Continued)
Note 6. Income Taxes (Continued)
Significant components of the Company's deferred tax balances are as follows:
Successor
(In thousands) Dec. 31, 2008 Dec. 31, 2007
Deferred tax assets (liabilities):
Current:
Prepaid expenses $ (14,077)$ (10,203)
Receivables allowances 13,103 14,382
Accrued insurance expenses 11,638 10,618
Current reserves 7,395 15,497
Accrued expenses and other 24,886 17,883
Total current asset 42,945 48,177
Long-Term:
Intangible assets(1) (1,104,021) (1,142,715)
Accrued insurance expenses 5,399 5,589
Net operating loss and tax credit carryforwards 117,696 83,034
Other long-term obligations 16,054 (16,377)
(964,872) (1,070,469)
Less valuation allowance (16,874) (9,031)
Total long-term liability (981,746) (1,079,500)
Net deferred tax liability $ (938,801)$(1,031,323)
•
The deferred tax liability relates primarily to the difference in the tax versus book basis of intangible assets. The majority of this liability
will not actually be paid until a business unit of the Company is sold.
At December 31, 2008, the Company had deferred tax assets, net of valuation allowances, of $97.7 million for federal and state net operating loss
carryforwards which expire at various dates up to 2028. The Company also had deferred tax assets, net of valuation allowances, of $6.7 million for federal and
state credit carryforwards which expire at various dates up to 2028.
Note 7. Acquisitions
Acquisitions have been accounted for using the purchase method and, accordingly, the results of operations of the acquired businesses have been
included in the Company's consolidated financial statements since their dates of acquisition. The assets and liabilities of these businesses were recorded in the
financial statements at their estimated fair values as of the acquisition dates.
Current Year
During the year ended December 31, 2008, the Company completed several lawn care and pest control acquisitions, along with several Merry Maids'
franchise acquisitions, for a total net purchase price of $74.2 million. Related to these acquisitions, the Company recorded goodwill of approximately
$57.3 million and other intangibles of approximately $16.4 million.
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