Earthlink 2009 Annual Report Download - page 102

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Table of Contents
EARTHLINK, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following table summarizes the significant differences between the U.S. federal statutory tax rate and the Company's effective tax rate
for continuing operations for financial statement purposes for the years ended December 31, 2007, 2008 and 2009:
Deferred tax assets and liabilities from continuing operations include the following as of December 31, 2008 and 2009:
As of December 31, 2008 and 2009, the Company had NOLs for federal income tax purposes totaling approximately $532.7 million and
$350.0 million, respectively, which begin to expire in 2020. Of these federal NOLs approximately $100.0 million are limited under Internal
Revenue Code Section 382. As of
98
Year Ended December 31,
2007 2008 2009
(in thousands)
Federal income tax provision at statutory rate
$
19,607
$
(58,077
)
$
(56,362
)
State income taxes, net of federal benefit
1,382
(2,995
)
(5,757
)
Nondeductible expenses
(4,152
)
1,841
(269
)
Goodwill and intangible asset impairment
—
(
23,081
)
(8,362
)
Net change to valuation allowance
(9,233
)
114,808
198,767
Change in state effective tax rate
(5,321
)
—
—
Other
(1,056
)
(312
)
(1,932
)
Income tax benefit
$
1,227
$
32,184
$
126,085
As of December 31,
2008
2009
(in thousands)
Current deferred tax assets:
Accrued liabilities and reserves
$
16,237
$
7,709
Net operating loss carryforwards
57,390
45,047
Other
1,440
911
Valuation allowance
(54,338
)
(6,995
)
Current deferred tax liabilities:
Other
(475
)
(609
)
Total net current deferred tax assets
20,254
46,063
Non
-
current deferred tax assets:
Net operating loss carryforwards
$
123,296
$
86,885
Accrued liabilities and reserves
332
2,078
Subscriber base and other intangible assets
77,071
66,144
Valuation allowance
(178,729
)
(27,116
)
Other
57,523
52,863
Non
-
current deferred tax liabilities:
Subscriber base and other intangible assets
(3,163
)
(3,010
)
Other
(30,937
)
(22,912
)
Indefinite lived intangible assets
(1,636
)
(1,800
)
Total net non
-
current deferred tax asset
43,757
153,132
Net deferred tax asset
$
64,011
$
199,195