Charter 2011 Annual Report Download - page 117

CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2011, 2010 AND 2009
(dollars in millions, except share or per share data or where indicated)
F- 33
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, 2011 and 2010 (Successor) are presented below.
Deferred tax assets:
Goodwill
Deferred financing
Investment in partnership
Loss carryforwards
Accrued and other
Total gross deferred tax assets
Less: valuation allowance
Deferred tax assets
Deferred tax liabilities:
Indefinite life intangibles
Other intangibles
Property, plant and equipment
Deferred financing and other
Indirect corporate subsidiaries:
Indefinite life intangibles
Other
Deferred tax liabilities
Net deferred tax liabilities
Successor
December 31,
2011
$ 193
—
448
3,069
114
3,824
(2,587)
$ 1,237
$ (838)
(360)
(567)
(32)
(119)
(145)
(2,061)
$ (824)
2010
$ 192
31
450
2,867
148
3,688
(2,275)
$ 1,413
$(575)
(489)
(626)
(1)
(117)
(143)
(1,951)
$(538)
Included in net deferred tax liabilities above is net current deferred assets of $23 million and $30 million as of December 31, 2011
and 2010, respectively, included in prepaid expenses and other current assets in the accompanying consolidated balance sheets of
the Company. Net deferred tax liabilities included approximately $221 million and $225 million at December 31, 2011 and 2010,
respectively, relating to certain indirect subsidiaries of Charter Holdco that file separate federal or state income tax returns. The
remainder of the Company's net deferred tax liability arose from Charter's investment in Charter Holdco, and was largely attributable
to the characterization of franchises for financial reporting purposes as indefinite-lived.
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 and the limitations imposed under Section
382 of the Code, discussed below, on Charter’s ability to use existing loss carryforwards in the future, valuation allowances have
been established except for future taxable income that will result from the reversal of existing temporary differences for which
deferred tax liabilities are recognized. Realization of deferred tax assets is dependent on generating sufficient taxable income
prior to expiration of the loss carryforwards. The amount of the deferred tax assets considered realizable and, therefore, reflected
in the consolidated balance sheet, would be increased at such time that it is more-likely-than-not future taxable income will be
realized during the carryforward period. At the time this consideration is met, an adjustment to reverse some portion of the existing
valuation allowance would result.
As of December 31, 2011 (Successor), Charter and its indirect corporate subsidiaries had approximately $7.4 billion of federal
tax net operating and capital loss carryforwards, resulting in a gross deferred tax asset of approximately $2.6 billion, expiring in
the years 2014 through 2031. These losses resulted from the operations of Charter Holdco and its subsidiaries. In addition, as of
December 31, 2011 (Successor), Charter and its indirect corporate subsidiaries had state tax net operating and capital loss