Earthlink 2010 Annual Report Download - page 125

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Table of Contents
EARTHLINK, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
14. Income Taxes
The current and deferred income tax benefit (provision) from continuing operations for the years ended December 31, 2008, 2009 and 2010
were as follows:
During the year ended December 31, 2008, the Company released $65.6 million of its valuation allowance related to its deferred tax assets.
These deferred tax assets relate primarily to NOLs which the Company determined it will more likely than not be able to utilize due to the
generation of sufficient taxable income in the future. Of the total valuation allowance release, $56.1 million was recorded as an income tax
benefit in the Consolidated Statement of Operations. The remaining $9.5 million related to acquired net operating losses and reduced goodwill
on the Consolidated Balance Sheet.
During the year ended December 31, 2009, the Company released $199.0 million of its valuation allowance related to its deferred tax assets.
Of the valuation allowance release, $198.8 million was recorded as an income tax benefit in the Consolidated Statement of Operations and
$0.2 million related to temporary differences and was recorded to accumulated other comprehensive income on the Consolidated Balance Sheet.
These deferred tax assets relate primarily to NOLs which the Company determined it will more likely than not be able to utilize due to the
generation of sufficient taxable income in the future.
During the year ended December 31, 2010, the Company released $0.5 million of its valuation allowance related to its deferred tax assets.
This valuation allowance release was a combination of an increase in valuation allowance of $0.4 million relating to stock compensation
deferred tax assets, and a decrease in valuation allowance of $0.9 million relating to net operating loss carry forwards ("NOLs"), which the
Company determined it will more likely than not be able to utilize due to the generation of sufficient taxable income in certain jurisdictions in
the future.
118
Year Ended December 31,
2008
2009
2010
(in thousands)
Current
Federal
$
(20,618
)
$
(4,103
)
$
(3,026
)
State
(4,860
)
(5,184
)
(4,242
)
Total current
(25,478
)
(9,287
)
(7,268
)
Deferred
Federal
52,475
124,357
(46,909
)
State
5,187
11,015
(2,627
)
Total deferred
57,662
135,372
(49,536
)
Income tax benefit (provision)
$
32,184
$
126,085
$
(56,804
)