DIRECTV 2009 Annual Report Download - page 111
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DIRECTV
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(continued)
‘‘Income from continuing operations before income taxes’’ in the Consolidated Statements of
Operations included the following components for the years ended December 31:
2009 2008 2007
(Dollars in Millions)
U.S. income ............................................... $1,446 $1,981 $2,154
Foreign income ............................................. 388 490 234
Total ................................................. $1,834 $2,471 $2,388
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:
2009 2008 2007
(Dollars in Millions)
Expected expense at U.S. federal statutory income tax rate ............... $(642) $(865) $(836)
U.S. state and local income tax expense, net of federal benefit ............ (77) (73) (91)
Liberty Transaction charges not recoverable .......................... (127) — —
Change in unrecognized tax benefits ............................... (21) (18) (18)
Minority interests in partnership earnings ............................ 30 26 4
Foreign taxes, net of tax deduction ................................. 31 27 (14)
Change in valuation allowance .................................... (33) 12 5
Tax credits .................................................. 3 32 4
Other ...................................................... 9 (5) 3
Total income tax expense .................................... $(827) $(864) $(943)
Temporary differences and carryforwards that gave rise to deferred tax assets and liabilities at
December 31 were as follows:
2009 2008
Deferred Deferred Deferred Deferred
Tax Tax Tax Ta x
Assets Liabilities Assets Liabilities
(Dollars in Millions)
Accruals and advances .............................. $ 328 $ 103 $ 278 $ 67
Prepaid expenses .................................. — 21 — 29
State taxes ...................................... 57 — 31 —
Depreciation, amortization and asset impairment charges .... — 608 — 273
Net operating loss and tax credit carryforwards ............ 881 — 643 —
Programming contract liabilities ....................... 127 — 162 —
Unrealized foreign exchange gains or losses .............. — 134 — 59
Tax basis differences in investments and affiliates .......... 188 795 84 705
Other .......................................... 5 14 6 6
Subtotal ........................................ 1,586 1,675 1,204 1,139
Valuation allowance ............................... (711) — (511) —
Total deferred taxes ............................ $ 875 $1,675 $ 693 $1,139
Included in ‘‘Investments and other assets’’ in the Consolidated Balance Sheets are $53 million and
$10 million of non current deferred tax assets at December 31, 2009 and 2008, respectively.
99