iHeartMedia 2007 Annual Report Download - page 86

NOTE K — INCOME TAXES
Significant components of the provision for income tax expense (benefit) are as follows:
Significant components of the Company’s deferred tax liabilities and assets as of December 31, 2007 and 2006 are as follows:
Included in the Company’s net deferred tax liabilities are $20.9 million and $19.3 million of current net deferred tax assets for 2007 and 2006,
respectively. The Company presents these assets in “Other current assets” on its consolidated balance sheets. The remaining $797.0 million and
$737.6 million of net deferred tax liabilities for 2007 and 2006, respectively, are presented in “Deferred tax liabilities” on the consolidated
balance sheets.
At December 31, 2007, net deferred tax liabilities include a deferred tax asset of $35.7 million relating to stock-based compensation expense
under Statement 123(R). Full realization of this deferred tax asset requires stock options to be exercised at a price equaling or exceeding the
sum of the grant price plus the fair value of the option at the grant date and restricted stock to vest at a price equaling or exceeding the fair
market value at the grant date. The provisions of Statement 123(R), however, do not allow a valuation allowance to be recorded unless the
company’s future taxable income is expected to be insufficient to recover the asset. Accordingly, there can be no assurance that the stock price
of the Company’s common stock will rise to levels sufficient to realize the entire tax benefit currently reflected in its balance sheet. See Note L
for additional discussion of Statement 123(R).
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(In thousands) 2007 2006 2005
Current — federal $180,556 $203,567 $(27,158)
Current — foreign 43,776 40,454 56,879
Current — state 20,823 26,090 (3,061)
Total current 245,155 270,111 26,660
Deferred — federal 171,251 182,298 382,768
Deferred — foreign (1,400) (9,134) (35,040)
Deferred — state 13,747 15,625 18,619
Total deferred 183,598 188,789 366,347
Income tax expense $428,753 $458,900 $393,007
(In thousands) 2007 2006
Deferred tax liabilities:
Intangibles and fixed assets $ 924,630 $760,951
Unrealized gain in marketable securities 20,715 38,485
Foreign 7,799 4,677
Equity in earnings 44,579 26,277
Investments 17,585 13,396
Deferred Income 4,940 4,129
Other 11,814 11,460
Total deferred tax liabilities 1,032,062 859,375
Deferred tax assets:
Accrued expenses 91,080 19,908
Long-term debt 56,026 35,081
Net operating loss/Capital loss carryforwards 521,187 558,371
Bad debt reserves 14,051 14,447
Other 90,511 66,635
Total gross deferred tax assets 772,855 694,442
Valuation allowance 516,922 553,398
Total deferred tax assets 255,933 141,044
Net deferred tax liabilities $ 776,129 $718,331