Charter 2009 Annual Report Download - page 84

CCH II, LLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2009, 2008, AND 2007
(dollars in millions, except where indicated)
F-36
The tax effects of these temporary differences that give rise to significant portions of the deferred tax assets and
deferred tax liabilities at December 31, 2009 and 2008 for the indirect subsidiaries of the Company which are
included in long-term liabilities are presented below.
Successor Predecessor
December 31, December 31,
2009 2008
Deferred tax assets:
N
et operating loss carryforwar
d
$88 $97
Other 33 2
Total gross deferred tax assets 121 99
Less: valuation allowance (31) (60)
Deferred tax assets $ 90 $ 39
Deferred tax liabilities:
Property, plant and equipment and other (170) (36)
Indefinite life intangibles (133) (182)
Deferred tax liabilities (303) (218)
N
et deferred tax liabilities $ (213) $ (179)
In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that
some portion or all of the deferred tax assets will be realized. Due to the Company’ s history of losses, valuation
allowances have been established except for deferred benefits available to offset certain deferred tax liabilities that
will reverse over time.
As of December 31, 2009, the Company had deferred tax assets of $121 million, which primarily relate to net
operating loss carryforwards of certain of its indirect corporate subsidiaries and limited liability companies subject
to state income tax. These net operating loss carryforwards (generally expiring in years 2010 through 2028) are
subject to certain limitations. A valuation allowance of $31 million exists with respect to these carry forwards as of
December 31, 2009.
No tax years for Charter or Charter Holdco, the Company’ s indirect parent companies, are currently under
examination by the Internal Revenue Service. Tax years ending 2006 through 2009 remain subject to examination.
Years prior to 2006 remain open solely for purposes of examination of Charter’ s net operating loss and credit
carryforwards.
20. Related Party Transactions
The following sets forth certain transactions in which the Company and the directors, executive officers, and
affiliates of the Company are involved. Unless otherwise disclosed, management believes each of the transactions
described below was on terms no less favorable to the Company than could have been obtained from independent
third parties.
In connection with the Plan, Charter, Mr. Allen and an entity controlled by Mr. Allen entered into the Allen Agreement,
pursuant to which, among other things, Mr. Allen and such entity agreed to support the Plan, including the settlement
of their rights, claims and remedies against Charter and its subsidiaries. See Note 2.
Charter is a party to management arrangements with Charter Holdco and certain of its subsidiaries. Under these
agreements, Charter and Charter Holdco provide management services for the cable systems owned or operated by
their subsidiaries. The management services include such services as centralized customer billing services, data