Sprint - Nextel 2013 Annual Report Download - page 153

Table of Contents
Index to Consolidated Financial Statements
SPRINT CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
income tax assets and liabilities as of
December 31, 2013 and 2012 , along with the income tax effect of each, were as follows:
_______________
The realization of deferred tax assets, including net operating loss carryforwards, is dependent on the generation of future taxable income sufficient
to realize the tax deductions, carryforwards and credits. However, our history of annual losses reduces our ability to rely on expectations of future income in
evaluating the ability to realize our deferred tax assets. Valuation allowances on deferred tax assets are recognized if it is determined that it is more likely than not
that the asset will not be realized. As a result, the Company recognized income tax expense to increase the valuation allowance
$708 million for the Successor
year ended
December 31, 2013 and $1.4 billion and $1.8 billion for the Predecessor 191 - day period ended July 10, 2013 and year ended December 31, 2012 ,
respectively, on deferred tax assets primarily related to losses incurred during the period that are not currently realizable and expenses recorded during the
period that are not currently deductible for income tax purposes. The remaining decrease in the carrying amount of the valuation allowance for the Successor
year ended
December 31, 2013 is primarily related to the net impact of acquisition accounting for the SoftBank Merger and Clearwire Acquisition. For the
Predecessor year ended
December 31, 2012 the remaining increase in the carrying amount of the valuation allowance is primarily associated with the tax effect of
items reflected in other comprehensive income (loss) and other accounts. We do not expect to record significant tax benefits on future net operating losses until
our circumstances justify the recognition of such benefits.
We believe it is more likely than not that our remaining deferred income tax assets, net of the valuation allowance, will be realized based on current
income tax laws and expectations of future taxable income stemming from the reversal of existing deferred tax liabilities. Uncertainties surrounding income tax law
changes, shifts in
F - 35
Successor (1)
Predecessor
December 31, 2013
December 31, 2012
Current
Long-Term
Current
Long-Term
(in millions)
Deferred tax assets
Net operating loss carryforwards
$
—
$
6,908
$
—
$
4,398
Tax credit carryforwards
—
374
—
431
Capital loss carryforwards
—
82
—
126
Property, plant and equipment
—
762
—
—
Debt obligations
—
633
—
—
Deferred rent
—
473
—
562
Pension and other postretirement benefits
—
194
—
430
Accruals and other liabilities
857
616
577
499
857
10,042
577
6,446
Valuation allowance
(594
)
(7,004
)
(472
)
(5,183
)
263
3,038
105
1,263
Deferred tax liabilities
Property, plant and equipment
—
—
—
420
FCC licenses
—
12,089
—
6,313
Trademarks
—
2,459
—
188
Intangibles
—
2,407
—
354
Investments
—
—
—
802
Other
77
310
104
233
77
17,265
104
8,310
Current deferred tax asset
$
186
$
1
Long -term deferred tax liability
$
14,227
$
7,047
(1)
Deferred tax assets and liabilities for the Successor year ended December 31, 2012 were considered immaterial.