Earthlink 2011 Annual Report Download - page 119
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Table of Contents
EARTHLINK, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Deferred tax assets and liabilities include the following as of December 31, 2010 and 2011:
Valuation allowance.
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 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 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 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.
During the year ended December 31, 2011, the Company released $0.4 million of its valuation allowance related to its deferred tax assets,
primarily relating 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 certain jurisdictions in the future.
112
As of December 31,
2010
2011
(in thousands)
Current deferred tax assets:
Accrued liabilities and reserves
$
7,746
$
11,062
Net operating loss carryforwards
42,669
29,810
Other
5,025
8,775
Valuation allowance
(6,549
)
(5,947
)
Current deferred tax liabilities:
Accrued liabilities and reserves
—
(
268
)
Other
(3,230
)
(4,995
)
Total net current deferred tax assets
45,661
38,437
Non
-
current deferred tax assets:
Net operating loss carryforwards
$
163,824
$
166,531
Accrued liabilities and reserves
2,490
5,965
Subscriber base and other intangible assets
53,071
53,525
Valuation allowance
(32,650
)
(33,985
)
Other
75,835
57,662
Non
-
current deferred tax liabilities:
Subscriber base and other intangible assets
(54,393
)
(62,721
)
Accrued liabilities and reserves
—
(
1,236
)
Indefinite lived intangible assets
(1,385
)
(1,644
)
Other
(17,755
)
(11,721
)
Total net non
-
current deferred tax asset
189,037
172,376
Net deferred tax asset
$
234,698
$
210,813