Sprint - Nextel 2008 Annual Report Download - page 133

CLEARWIRE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Components of deferred tax assets and liabilities as of December 31, 2009 and 2008 were as follows
(in thousands):
December 31,
2009 2008
Noncurrent deferred tax assets:
Net operating loss carryforward ................................. $718,853 $ 590,767
Capital loss carryforward ...................................... 6,230 6,187
Other assets ................................................. 13,573 3,519
Total deferred tax assets ......................................... 738,656 600,473
Valuation allowance ............................................ (573,165) (349,001)
Net deferred tax assets .......................................... 165,491 251,472
Noncurrent deferred tax liabilities:
Investment in Clearwire Communications ......................... 142,434 221,373
Spectrum licenses ............................................ 19,437 14,943
Other intangible assets ........................................ 9,937 19,113
Other ...................................................... 36 207
Total deferred tax liabilities ...................................... 171,844 255,636
Net deferred tax liabilities ....................................... $ 6,353 $ 4,164
Pursuant to the Transactions, the assets of Old Clearwire and its subsidiaries were combined with the
spectrum and certain other assets of the Sprint WiMAX Business. In conjunction with the acquisition of Old
Clearwire by the Sprint WiMAX Business, these assets along with the $3.2 billion of capital from the Investors
were contributed to Clearwire Communications. Clearwire is the sole holder of voting interests in Clearwire
Communications. As such, Clearwire controls 100% of the decision making of Clearwire Communications and
consolidates 100% of its operations. Clearwire Communications is treated as a partnership for United States
federal income tax purposes and therefore does not pay income tax in the United States and any current and
deferred tax consequences arise at the partner level, including Clearwire. Other than balances associated with the
non-United States operations, the only temporary difference for Clearwire after the Closing is the basis difference
associated with our investment in the partnership. Consequently, we recorded a deferred tax liability for the
difference between the financial statement carrying value and the tax basis we hold in our interest in Clearwire
Communications as of the date of the Transactions.
As of December 31, 2009, we had United States federal tax net operating loss carryforwards of
approximately $1.6 billion. A portion of the net operating loss carryforward is subject to certain annual
limitations imposed under Section 382 of the Internal Revenue Code of 1986. The net operating loss
carryforwards begin to expire in 2021. We had $386.4 million of tax net operating loss carryforwards in foreign
jurisdictions; $234.2 million have no statutory expiration date, $130.5 million begins to expire in 2015, and the
remainder of $21.7 million begins to expire in 2010.
We have recorded a valuation allowance against our deferred tax assets to the extent that we determined that
it is more likely than not that these items will either expire before we are able to realize their benefits or that
future deductibility is uncertain. As it relates to the United States tax jurisdiction, we determined that our
temporary taxable difference associated with our investment in Clearwire Communications will reverse within
the carryforward period of the net operating losses and accordingly represents relevant future taxable income.
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