American Home Shield 2010 Annual Report Download - page 86

Table of Contents
Notes to the Consolidated Financial Statements (Continued)
Note 5. Income Taxes (Continued)
Significant components of the Company's deferred tax balances are as follows:
December 31,
(In thousands) 2010 2009
Deferred tax assets (liabilities):
Current:
Prepaid expenses $ (21,182) $ (13,278)
Receivables allowances 13,258 12,031
Accrued insurance expenses 5,661 6,809
Current reserves 7,002 5,114
Accrued expenses and other 9,559 10,954
Less valuation allowance (28) (35)
Total current asset 14,270 21,595
Long-Term:
Intangible assets(1) (1,044,752) (1,056,971)
Accrued insurance expenses 5,770 6,081
Net operating loss and tax credit carryforwards 141,706 121,725
Other long-term obligations (23,128) (12,469)
Less valuation allowance (15,409) (15,443)
Total long-term liability (935,813) (957,077)
Net deferred tax liability $ (921,543) $ (935,482)
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 unless certain business units of the Company are sold.
(1)
At December 31, 2010, the Company had deferred tax assets, net of valuation allowances, of $117.0 million for federal and state net operating loss
carryforwards which expire at various dates up to 2030. The Company also had deferred tax assets, net of valuation allowances, of $6.9 million for federal and
state credit carryforwards which expire at various dates up to 2030.
Note 6. 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, 2010, the Company completed several lawn care and pest control acquisitions, along with several Merry Maids'
franchise acquisitions, for a total net purchase price of $70.9 million. Related to these acquisitions, the Company recorded goodwill of $50.2 million and other
intangibles of $17.6 million.
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