Charter 2009 Annual Report Download - page 83

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CCH II, LLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2009, 2008, AND 2007
(dollars in millions, except where indicated)
F-35
Current and deferred income tax benefit (expense) is as follows:
Successor Predecessor
One Month
Ended
December 31,
Eleven Months
Ended
November 30,
Year Ended
December 31,
2009 2009 2008 2007
Current expense:
Federal income taxes $ -- $ (1) $ (2) $ (3)
State income taxes (1) (6) (5) (5)
Current income tax expense (1) (7) (7) (8)
Deferred benefit (expense):
Federal income taxes (2) (19) 28 4
State income taxes (1) (13) 19 (16)
Deferred income tax benefit (expense) (3) (32) 47 (12)
Total income benefit (expense) $ (4) $ (39) $ 40 $ (20)
Income tax expense for the eleven months ended November 30, 2009 included $71 million of deferred tax benefit
related to the impairment of franchises. Income tax benefit for the year ended December 31, 2008 included $32
million of deferred tax benefit related to the impairment of franchises. Income tax expense for the year ended
December 31, 2007 includes $18 million of deferred income tax expense previously recorded at the Company’ s
indirect parent company. This adjustment should have been recorded by the Company in prior periods.
The Company’ s effective tax rate differs from that derived by applying the applicable federal income tax rate of
35% for the one month ended December 31, 2009, eleven months ended November 30, 2009 and years ended
December 31, 2008, and 2007, respectively, as follows:
Successor Predecessor
One Month
Ended
December 31,
Eleven Months
Ended
November 30,
Year Ended
December 31,
2009 2009 2008 2007
Statutory federal income taxes $ (5) $ (938) $ 617 $ 199
Statutory state income taxes, net (1) (98) 40 16
Losses allocated to limited liability companies not
subject to income taxes
(2)
972 (610) (228)
Valuation allowance reduced (used) 4
25 (7) (7)
Income tax benefit (expense) $ (4) $ (39) $ 40 $ (20)