Hess 2008 Annual Report Download - page 81

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Income (loss) before income taxes consisted of the following:
2008 2007 2006
(Millions of dollars)
United States*........................................... $ (318) $ (228) $ 406
Foreign** .............................................. 5,018 3,932 3,640
Total income before income taxes .......................... $4,700 $3,704 $4,046
* Includes substantially all of the Corporation’s interest expense and the results of hedging activities.
** Foreign income includes the Corporation’s Virgin Islands and other operations located outside of the United States.
Deferred income taxes arise from temporary differences between the tax bases of assets and liabilities and their
recorded amounts in the financial statements. A summary of the components of deferred tax liabilities and assets at
December 31 follows:
2008 2007
(Millions of dollars)
Deferred tax liabilities
Fixed assets and investments ...................................... $2,918 $3,048
Other ....................................................... 114 70
Total deferred tax liabilities ..................................... 3,032 3,118
Deferred tax assets
Net operating loss carryforwards ................................... 1,832 1,884
Tax credit carryforwards ......................................... 458 285
Accrued liabilities .............................................. 415 390
Asset retirement obligations ...................................... 406 430
Other ....................................................... 227 48
Total deferred tax assets ....................................... 3,338 3,037
Valuation allowance .............................................. (266) (224)
Net deferred tax assets .......................................... 3,072 2,813
Net deferred tax assets (liabilities) .................................. $40 $ (305)
At December 31, 2008, the Corporation has net operating loss carryforwards in the United States of
approximately $4.0 billion, substantially all of which expire in 2024 through 2027. At December 31, 2008, the
Corporation has alternative minimum tax credit carryforwards of approximately $165 million, which can be carried
forward indefinitely. Foreign tax credit carryforwards, which expire in 2017 and 2018, total $248 million. The
Corporation also has approximately $45 million of general business credits, substantially all of which expire
between 2012 and 2025.
65
HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)