DIRECTV 2008 Annual Report Download - page 96
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THE DIRECTV GROUP, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(continued)
‘‘Income from continuing operations before income taxes and minority interests’’ included the
following components for the years ended December 31:
2008 2007 2006
(Dollars in Millions)
U.S. income ............................................... $1,981 $2,154 $2,162
Foreign income ............................................. 490 234 137
Total ................................................. $2,471 $2,388 $2,299
Our income tax expense was different than the amount computed using the U.S. federal statutory
income tax rate for the reasons set forth in the following table for the years ended December 31:
2008 2007 2006
(Dollars in Millions)
Expected expense at U.S. federal statutory income tax rate ............... $(865) $(836) $(804)
U.S. state and local income tax expense, net of federal benefit ............ (73) (91) (82)
Change in unrecognized tax benefits ............................... (18) (18) —
Tax basis differences attributable to divestitures .......................——25
Minority interests in partnership earnings ............................ 26 4 5
Foreign tax (expense) benefit, net of tax deduction ..................... 27 (14) (9)
Change in valuation allowance .................................... 12 5 1
Tax credits .................................................. 32 4 —
Other ...................................................... (5) 3 (2)
Total income tax expense .................................... $(864) $(943) $(866)
Temporary differences and carryforwards that gave rise to deferred tax assets and liabilities at
December 31 were as follows:
2008 2007
Deferred Deferred Deferred Deferred
Tax Tax Tax Tax
Assets Liabilities Assets Liabilities
(Dollars in Millions)
Accruals and advances .............................. $ 278 $ 67 $ 300 $ 132
Prepaid expenses .................................. — 29 — 40
State taxes ...................................... 31 — 23 —
Depreciation, amortization and asset impairment charges .... — 273 — 193
Foreign net operating loss and tax credit carryforwards ...... 643 — 715 —
Programming contract liabilities ....................... 162 — 188 —
Unrealized foreign exchange gains or losses .............. — 59 — 106
Tax basis differences in investments and affiliates .......... 84 705 58 682
Other .......................................... 6 6 3 6
Subtotal ........................................ 1,204 1,139 1,287 1,159
Valuation allowance ............................... (511) — (605) —
Total deferred taxes ............................ $ 693 $1,139 $ 682 $1,159
As of December 31, 2008, we had $10 million of long-term deferred tax assets, recorded in
‘‘Investments and other assets’’ in the Consolidated Balance Sheets.
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