HP 2008 Annual Report Download - page 133

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HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
Note 13: Taxes on Earnings (Continued)
The significant components of deferred tax assets and deferred tax liabilities were as follows for
the following fiscal years ended October 31:
2008 2007
Deferred Deferred Deferred Deferred
Tax Ta x Ta x Tax
Assets Liabilities Assets Liabilities
In millions
Loss carryforwards ................................ $1,753 $ — $ 1,573 $ —
Credit carryforwards ............................... 1,549 — 1,999 —
Unremitted earnings of foreign subsidiaries .............. — 5,683 — 4,018
Inventory valuation ............................... 169 6 173 11
Intercompany transactions — profit in inventory .......... 553 — 506 —
Intercompany transactions — excluding inventory .......... 324 — 1,850 —
Fixed assets ..................................... 152 8 295 7
Warranty ....................................... 793 — 709 —
Employee and retiree benefits ........................ 1,955 123 1,014 543
Accounts receivable allowance ....................... 299 3 190 2
Capitalized research and development .................. 1,192 — 1,538 —
Purchased intangible assets .......................... 30 1,961 48 627
Restructuring .................................... 596 — 75 —
Equity investments ................................ 70 — 61 —
Deferred revenue ................................. 918 — 748 —
Other ......................................... 768 83 1,134 112
Gross deferred tax assets and liabilities ................. 11,121 7,867 11,913 5,320
Valuation allowance ............................... (1,801) — (1,543) —
Total deferred tax assets and liabilities .................. $9,320 $7,867 $10,370 $5,320
The breakdown between current and long-term deferred tax assets and deferred tax liabilities was
as follows for the following fiscal years ended October 31:
2008 2007
In millions
Current deferred tax assets .......................................... $3,920 $4,609
Current deferred tax liabilities ........................................ (97) (123)
Long-term deferred tax assets ........................................ 792 961
Long-term deferred tax liabilities ...................................... (3,162) (397)
Total deferred tax assets net of deferred tax liabilities ....................... $1,453 $5,050
As of October 31, 2008, HP had recorded a deferred tax asset of $1.8 billion related to loss
carryforwards, of which $1.2 billion relates to foreign net operating losses. HP has provided a valuation
allowance of $1.0 billion on deferred tax assets for foreign net operating loss carryforwards that HP
does not expect to realize. The remaining $540 million deferred tax asset consists of $365 million of
federal and $175 million of state deferred tax assets relating to federal and state net operating losses,
respectively, including net operating losses from acquired companies. HP has provided $312 million in
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