Blizzard 2009 Annual Report Download - page 74

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62
TheitemsaccountingforthedifferencebetweenincometaxescomputedattheU.S.federal
statutoryincometaxrateandtheincometaxexpense(benefit)foreachoftheyearsareasfollows:
FortheyearsendedDecember31,
2009
2008
2007
Federalincometaxprovisionatstatutoryrate................................
$(3)
(35)%
$(65)
(35)%
$61
35%
Statetaxes,netoffederalbenefit...........................................................
(17)
(219)
(6)
(3)
4
2
Researchanddevelopmentcredits.........................................................
(24)
(302)
(31)
(17)
(10)
(6)
Domesticproductionactivitydeduction................................
(7)
(89)
(12)
(6)
—
—
Foreignratedifferential................................................................
(82)
(1,040)
(2)
(1)
—
—
Changeinvaluationallowance..............................................................
(22)
(286)
6
3
(28)
(16)
Changeintaxreserves................................................................
34
440
11
6
—
—
Foreignwithholdingtax................................................................
2
24
8
4
7
4
Foreigntaxcredits................................................................
(3)
(41)
(15)
(8)
(2)
(1)
Goodwillimpairment................................................................
—
—
7
4
—
—
Shortfallfromemployeestockoptionexercises................................
2
27
—
—
—
—
Returntoprovisionadjustment..............................................................
—
—
12
6
—
—
Changeinvaluationallowancerelatedtonetoperating
losssurrendered................................................................
—
—
—
—
(84)
(48)
Other................................................................................................
(1)
(13)
7
4
—
—
$(121)
(1,534)%
$(80)
(43)%
$(52)
(30)%
Deferredincometaxesreflectthenettaxeffectsoftemporarydifferencesbetweentheamountsofassets
andliabilitiesforaccountingpurposesandtheamountsusedforincometaxpurposes.Thecomponentsof
thenetdeferredtaxassets(liabilities)areasfollows(amountsinmillions):
Asof
December31,
2009
2008
Deferredtaxassets:
Reservesandallowances................................................................
$36
$35
Allowanceforsalesreturnsandpriceprotection................................
64
59
Inventoryreserve.....................................................................................
17
13
Accruedexpenses....................................................................................
53
46
Accruedlegalandprofessionalfees........................................................
3
28
Accruedrestructuring................................................................
1
15
Deferredrevenue.....................................................................................
292
326
Deferredcompensation................................................................
4
1
Depreciation.............................................................................................
—
9
Taxcreditcarryforwards................................................................
61
30
Netoperatinglosscarryforwards.............................................................
18
24
Statetaxes................................................................................................
—
19
Stockbasedcompensation................................................................
119
58
Foreigndeferredassets................................................................
27
27
Other................................................................................................
9
4
Deferredtaxassets.......................................................................................
704
694
Valuationallowance....................................................................................
—
(22)
Deferredtaxassets,netofvaluationallowance................................
704
672
Deferredtaxliabilities:
Intangibles...............................................................................................
(407)
(691)
Prepaidroyalties......................................................................................
(5)
(10)
Capitalizedsoftwaredevelopmentexpenses................................
(56)
(50)
Statetaxes................................................................................................
(8)
—
Deferredtaxliabilities................................................................
(476)
(751)
Netdeferredtaxassets(liabilities)...............................................................
$228
$(79)