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Table of Contents
CLEARWIRE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
Components of deferred tax assets and liabilities as of December 31, 2012 and 2011 were as follows (in thousands):
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, which we refer
to as NOL, capital loss or tax credit carry
- forwards are utilized.
As of December 31, 2012, excluding NOL carry
- forwards that we permanently will be unable to use (as discussed below), we had United States
federal tax NOL carry - forwards of approximately $1.26 billion of which $1.12 billion is subject to certain annual limitations imposed under Section 382 of
the Internal Revenue Code. The NOL carry
- forwards begin to expire in 2021 . We had $255.2 million of tax NOL carry - forwards in foreign jurisdictions;
$243.9 million have no statutory expiration date, and $11.3 million begins to expire in 2015 . We also have federal capital loss carry - forwards of $583.5
million which is also subject to certain annual limitations imposed under Section 382 of the Internal Revenue Code. The capital loss carry
- forwards
begin to expire between
2015 and 2017 . Our U.S. federal NOL carry - forwards and capital loss carry - forwards in total are subject to the annual limitations
imposed under Section 382 of the Internal Revenue Code. We currently do not project that the Company will generate capital gain income to utilize the
capital loss carry
- forwards. However, if the Company generates sufficient capital gain income to enable utilization of capital loss carry - forwards in
excess of
$382.4 million , then NOL carry - forwards of up to $201.1 million may no longer be available to offset future taxable income.
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 LLC, which we refer to
as Clearwire Communications, will not fully reverse within the carry
- forward period of the NOLs and accordingly does not represent relevant future
taxable income.
Time Warner Cable Inc., which we refer to as Time Warner Cable, exchanged 46.4 million Class B Common Interests, and a corresponding number
of shares of Class B Common Stock, for an equal number of shares of Class A Common Stock, and which we refer to as the Time Warner Exchange, on
September 13, 2012. Comcast Corporation, which we refer to as Comcast, exchanged 88.5 million Class B Common Interests and a corresponding
number of shares of Class B Common Stock for an equal number of shares of Class A Common Stock, which we refer to as the Comcast Exchange, on
September 27, 2012, BHN Spectrum Investments, LLC, which we refer to as Bright House, exchanged 8.5 million Class B Common Interests and a
corresponding number of shares of Class B Common Stock for an equal number of shares of Class A Common Stock, which we refer to as the Bright
House Exchange, on October 17, 2012. The Time Warner Exchange, Comcast Exchange and Bright House Exchange resulted in significant changes to
the financial statement and tax basis, respectively, that Clearwire has in its interest in Clearwire Communications, as well as, an increase in the amount
of temporary differences which will reverse within the NOL carryforward period (see discussion below).
F - 63
December 31,
2012
2011
Noncurrent deferred tax assets:
Net operating loss carryforward
$
553,195
$
1,157,983
Capital loss carryforward
221,453
5,818
Other assets
625
2,381
Total deferred tax assets
775,273
1,166,182
Valuation allowance
(458,935
)
(1,003,633
)
Net deferred tax assets
316,338
162,549
Noncurrent deferred tax liabilities:
Investment in Clearwire Communications
460,834
314,609
Other
(504
)
122
Total deferred tax liabilities
460,330
314,731
Net deferred tax liabilities
$
143,992
$
152,182