Sprint - Nextel 2010 Annual Report Download - page 112

Components of deferred tax assets and liabilities as of December 31, 2010 and 2009 were as follows (in thousands):
Noncurrent deferred tax assets:
Net operating loss carryforward
Capital loss carryforward
Other assets
Total deferred tax assets
Valuation allowance
Net deferred tax assets
Noncurrent deferred tax liabilities:
Investment in Clearwire Communications
Spectrum licenses
Other intangible assets
Other
Total deferred tax liabilities
Net deferred tax liabilities
December 31,
2010
$932,818
6,620
7,307
946,745
(696,887)
249,858
238,286
16,164
659
313
255,422
$ 5,564
2009
$718,853
6,230
13,573
738,656
(573,165)
165,491
142,434
19,437
9,937
36
171,844
$ 6,353
We determine deferred income taxes based on the estimated future tax effects of differences between the financial
statement and tax bases of assets and liabilities using the tax rates expected to be in effect when any temporary differences
reverse or when the net operating loss, capital loss or tax credit carryforwards are utilized.
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
timing of deductions for prepaid expenses and those 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.
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 not fully reverse within the carryforward period of the net operating
losses and accordingly represents relevant future taxable income.
We file income tax returns for Clearwire and our subsidiaries in the United States Federal jurisdiction and various state
and foreign jurisdictions. As of December 31, 2010, the tax returns for Clearwire for the years 2003 through 2009 remain open
to examination by the Internal Revenue Service and various state tax authorities. In
Table of Contents CLEARWIRE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS —(CONTINUED)
F-55