FairPoint Communications 2009 Annual Report Download - page 150

Table of Contents
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Total income tax (expense) benefit was different than that computed by applying U.S. Federal income tax rates to income before income taxes for
the years ended December 31, 2009, 2008 and 2007. The reasons for the differences are presented below (in thousands):
The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities as of
December 31, 2009 and 2008 are presented below (in thousands):
137
   
Statutory Federal income tax (benefit) rate (35.0)% (35.0)% 35.0%
State income tax (expense) benefit, net of Federal income
tax expense (2.9) (2.7) 5.3
Post-petition interest 2.7 — —
Investment tax credits (0.1) (0.4) (0.7)
Medicare subsidy (0.2) (1.0) (3.5)
Restructuring charges 1.3 — —
Other, net 1.0 0.3 1.1
Valuation allowance 8.5 — —
Effective income tax rate (24.7)% (38.8)% 37.2%
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Deferred tax assets:
Federal and state tax loss carryforwards $ 165,982 $ 135,011
Employee benefits 136,242 117,794
Allowance for doubtful accounts 26,539 8,253
Investment tax credits 1,925 2,127
Alternative minimum tax and other state credits 6,095 4,098
Basis in interest rate swaps 33,181 33,094
Bond issuance costs 13,154 —
Service quality rebate reserve 11,044 —
Other, net 9,009 13,065
Total gross deferred tax assets 403,171 313,442
Deferred tax liabilities:
Property, plant, and equipment 321,856 316,943
Goodwill and other intangible assets 88,011 115,649
Other, net 6,119 4,189
Total gross deferred tax liabilities 415,986 436,781
Net deferred tax liabilities before valuation allowance 12,815 123,339
Valuation allowance 27,214 —
Net deferred tax liabilities $ 40,029 $ 123,339