Intel 2008 Annual Report Download - page 112

Table of Contents
INTEL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities
for financial reporting purposes and the amounts for income tax purposes. Significant components of our deferred tax assets
and liabilities at fiscal year-ends were as follows:
We had state tax credits of $158 million as of December 27, 2008 that will expire between 2009 and 2019. The net deferred
tax asset valuation allowance was $358 million as of December 27, 2008 compared to $133 million as of December 29, 2007.
The valuation allowance is based on our assessment that it is more likely than not that certain deferred tax assets will not be
realized in the foreseeable future. $258 million of the valuation allowance as of December 27, 2008 was related to investment
asset impairments, and the remaining $100 million of the valuation allowance was related to unrealized state credit carry
forwards.
As of December 27, 2008, U.S. deferred income taxes have not been provided for on a cumulative total of approximately
$7.5 billion of undistributed earnings for certain non-U.S. subsidiaries. Determination of the amount of unrecognized deferred
tax liability for temporary differences related to investments in these non-U.S. subsidiaries that are essentially permanent in
duration is not practicable. We currently intend to reinvest those earnings in operations outside the U.S.
Effective at the beginning of the first quarter of 2007, we adopted the provisions of FIN 48. As a result of the implementation
of FIN 48, we reduced the liability for net unrecognized tax benefits by $181 million, and accounted for the reduction as a
cumulative effect of a change in accounting principle that resulted in an increase to retained earnings of $181 million.
103
(In Millions)
2008
2007
Deferred tax assets
Accrued compensation and other benefits
$
529
$
472
Deferred income
160
222
Share
-
based compensation
669
542
Inventory
602
438
Unrealized losses on equity investments and derivatives
762
116
State credits and net operating losses
138
133
Investment in foreign subsidiaries
50
32
Other, net
337
326
3,247
2,281
Valuation allowance
(358
)
(133
)
Total deferred tax assets
$
2,889
$
2,148
Deferred tax liabilities
Property, plant and equipment
$
(507
)
$
(609
)
Licenses and intangibles
(54
)
(137
)
Unrealized gains on investments and derivatives
—
(
227
)
Other, net
(207
)
(119
)
Total deferred tax liabilities
$
(768
)
$
(1,092
)
Net deferred tax assets
$
2,121
$
1,056
Reported as:
Current deferred tax assets
$
1,390
$
1,186
Non
-
current deferred tax assets
1
777
281
Non
-
current deferred tax liabilities
(46
)
(411
)
Net deferred taxes
$
2,121
$
1,056
1
Included within other long
-
term assets on the consolidated balance sheets.