Sprint - Nextel 2005 Annual Report Download - page 139
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SPRINT NEXTEL CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Income tax expense (benefit) allocated to other items was as follows:
Year Ended December 31,
2005 2004 2003
(in millions)
Discontinued operations .............................................. $ — $ — $ 820
Cumulative effect of change in accounting principle ........................ (10) — 162
Additional minimum pension liability (1) ................................. (39) (17) (12)
Gains on securities (1) ................................................ 27 2 27
Gains (losses) on qualifying cash flow hedges (1) .......................... 7 1 (23)
Stock ownership, purchase and option arrangements (2) ..................... (38) (25) (4)
(1) These amounts have been recorded directly to shareholders’ equity—accumulated other comprehensive
income (loss) on the accompanying consolidated balance sheets.
(2) These amounts have been recorded directly to shareholders’ equity—paid-in capital on the accompanying
consolidated balance sheets.
We recognize deferred income taxes for the temporary differences between the carrying amounts of our assets
and liabilities for financial statement purposes and their tax bases. The sources of the differences that give rise to
the deferred income tax assets and liabilities at year-end 2005 and 2004, along with the income tax effect of each,
were as follows:
December 31, 2005 December 31, 2004
Current Long-Term Current Long-Term
(in millions)
Deferred tax assets
Net operating loss carryforwards ....................... $ 1,835 $ 1,186 $ 1,050 $ 1,269
Capital loss carryforwards ............................ 354 77 — —
Accruals and other liabilities .......................... 473 335 219 150
Tax credit carryforwards ............................. — 556 — 397
Postretirement and other benefits ....................... — 871 — 842
2,662 3,025 1,269 2,658
Valuation allowance .................................. (556) (515) (220) (450)
2,106 2,510 1,049 2,208
Deferred tax liabilities
Property, plant and equipment ......................... — 3,769 — 3,735
Intangibles ........................................ — 9,594 — 649
Investments ........................................ 225 834 — —
Other ............................................. 70 — — —
295 14,197 — 4,384
Current deferred tax asset ............................. $ 1,811 $ 1,049
Long-term deferred tax liability ........................ $ 11,687 $ 2,176
The foreign income (loss) included in income (loss) from continuing operations totaled $27 million in 2005,
$(203) million in 2004 and $(141) million in 2003. We have no material un-remitted earnings of foreign
subsidiaries.
F-44