Charter 2010 Annual Report Download - page 118

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F- F-PB
CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2010, 2009, AND 2008
(dollars in millions, except share or per share data or where indicated)
carryforwards are also subject to similar, but varying, restrictions on
their future use. Charter’s indirect corporate subsidiaries are also
subject to separate Section 382 limitations on the utilization of their
net operating loss carryforwards. If the Company was to experience
another “ownership change” in the future, its ability to use its loss
carryforwards could be subject to further limitations.
In determining the Company’s tax provision for financial reporting
purposes, the Company establishes a reserve for uncertain tax
positions unless such positions are determined to be “more likely
than not” of being sustained upon examination, based on their
technical merits. ere is considerable judgment involved in
determining whether positions taken on the tax return are “more
likely than not” of being sustained. e Company did not have any
unrecognized tax benefits for the year ended December 31, 2008.
A reconciliation of the beginning and ending amount of unrecognized
tax benefits included in other long-term liabilities in the accompanying
consolidated balance sheets of the Company is as follows.
Balance at January 1, 2009 (Predecessor) $ --
Additions based on tax positions
related to current period
20
Balance at November 30, 2009 (Predecessor) 20
Additions based on tax positions
related to current period
3
Balance at December 31, 2009 (Successor) 23
Additions based on tax positions
related to prior year
228
Reductions due to tax positions
related to prior year
(27)
Balance at December 31, 2010 (Successor) $ 224
Included in the balance at December 31, 2010, are additions to
the uncertain tax position of $228 million related to a 2009 tax
position for which the ultimate deductibility is highly certain, but for
which there is uncertainty about the character of the deductibility.
Included in the balance at December 31, 2009, are $23 million of
uncertain tax positions for which the ultimate deductibility is highly
certain, but for which there is uncertainty about the character of
the deductibility. e change in character of the deduction would
not impact the annual effective tax rate after consideration of the
valuation allowance.
e Company does not currently anticipate that its existing reserves
related to uncertain income tax positions as of December 31, 2010
will significantly increase or decrease during the twelve-month period
ending December 31, 2011; however, various events could cause
the Company’s current expectations to change in the future. ese
uncertain tax positions, if ever recognized in the financial statements,
would be recorded in the consolidated statement of operations as part
of the income tax provision.
No tax years for Charter, Charter Holdco, or its indirect subsidiaries
are currently under examination by the Internal Revenue Service.
Tax years ending 2007 through 2010 remain subject to examination
and assessment. Years prior to 2007 remain open solely for purposes
of examination of Charter’s loss and credit carryforwards.