Sprint - Nextel 2008 Annual Report Download - page 94

SPRINT NEXTEL CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(1) These amounts have been recorded directly to shareholders’ equity—accumulated other comprehensive
loss on the consolidated balance sheets.
(2) These amounts have been recorded directly to shareholders’ equity—paid-in capital on the 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. Deferred tax assets are also recorded for
operating loss, capital loss and tax credit carryforwards. The sources of the differences that give rise to the
deferred income tax assets and liabilities as of December 31, 2009 and 2008, along with the income tax effect of
each, were as follows:
December 31, 2009 December 31, 2008
Current Long-Term Current Long-Term
(in millions)
Deferred tax assets
Net operating loss carryforwards ........................... $— $ 2,788 $— $ 1,929
Capital loss carryforwards ................................ — 40 — 74
Accruals and other liabilities .............................. 442 1,209 525 1,249
Tax credit carryforwards ................................. — 479 — 650
Pension and other postretirement benefits .................... — 200 — 350
442 4,716 525 4,252
Valuation allowance ........................................ (88) (924) (78) (633)
354 3,792 447 3,619
Deferred tax liabilities
Property, plant and equipment ............................. — 2,658 — 3,133
Intangibles ............................................ — 6,667 — 6,551
Investments ............................................ — 1,048 — 1,033
Other ................................................. 59 112 56 86
59 10,485 56 10,803
Current deferred tax asset ................................... $295 $391
Long-term deferred tax liability .............................. $ 6,693 $ 7,184
During 2009 and 2008, we incurred $3 million and $55 million, respectively, of foreign loss which is
included in loss before income taxes. During 2007, we had $132 million of foreign income included in loss
before income taxes. We have no material unremitted earnings of foreign subsidiaries. Cash was paid for income
taxes, net, of $31 million and $51 million in 2009 and 2007, respectively. Cash refunds for income taxes were
received, net, totaling $30 million in 2008.
In 1998, we acquired $229 million of potential tax benefits related to net operating loss carryforwards in
the controlling interest acquisition of our wireless joint venture, which we call the PCS Restructuring. The
benefits acquired in the PCS Restructuring are subject to certain realization restrictions under various tax laws.
We are required to reimburse the former cable company partners of the joint venture for net operating loss and
tax credit carryforward benefits generated before the PCS Restructuring if realization by us produces a cash
benefit that would not otherwise have been realized. The reimbursement will equal 60% of the net cash benefit
received by us and will be made to the former cable company partners in shares of our stock. As of December 31,
2009, the unexpired carryforward benefits subject to this requirement total $177 million and we maintained a
valuation allowance on the entire amount of these tax benefits.
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