Delta Airlines 2010 Annual Report Download - page 84

Table of Contents
The following table presents the principal reasons for the difference between the effective tax rate and the U.S. federal statutory income tax rate:
Year Ended December 31,
2010 2009 2008
U.S. federal statutory income tax rate 35.0% (35.0)% (35.0)%
State taxes, net of federal income tax effect 2.3 (1.8) (0.6)
(Decrease) increase in valuation allowance (42.3) 32.9 8.3
Income Tax Allocation (1) — (20.2) —
Goodwill impairment — — 26.8
Other, net 7.6 2.4 (0.8)
Effective income tax rate 2.6% (21.7)% (1.3)%
(1) We consider all income sources, including other comprehensive income, in determining the amount of tax benefit allocated to continuing operations
(the "Income Tax Allocation"). For the year ended December 31, 2009, as a result of the Income Tax Allocation, we recorded a non-cash income tax
benefit of $321 million on the loss from continuing operations, with an offsetting non-cash income tax expense of $321 million in other comprehensive
income.
Deferred Taxes
Deferred income taxes reflect the net tax effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting and
income tax purposes. The following table shows significant components of our deferred tax assets and liabilities:
December 31,
(in millions) 2010 2009
Deferred tax assets:
Net operating loss carryforwards $ 6,472 $ 6,419
Pension postretirement and other benefits 4,527 4,661
AMT credit carryforward 424 452
Deferred revenue 2,202 2,282
Rent expense 280 272
Reorganization items, net 674 1,033
Fuel hedge derivatives — 30
Other temporary differences 495 413
Valuation allowance (9,632) (9,897)
Total deferred tax assets $ 5,442 $ 5,665
Deferred tax liabilities:
Depreciation $ 4,837 $ 4,925
Debt valuation 330 431
Intangible assets 1,731 1,757
Fuel hedge derivatives 73 —
Other 40 112
Total deferred tax liabilities $ 7,011 $ 7,225
The following table shows the current and noncurrent deferred tax assets (liabilities) recorded on our Consolidated Balance Sheets:
December 31,
(in millions) 2010 2009
Current deferred tax assets, net $ 355 $ 357
Noncurrent deferred tax liabilities, net (1,924) (1,917)
Total deferred tax liabilities, net $ (1,569) $ (1,560)
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