Kodak 2005 Annual Report Download - page 101

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Intellectual Property Donation
During 2003, the Company recorded a tax benefi t of $13 million related to the donation of intellectual property in the form of technology patents to a
tax-qualifi ed organization.
The signifi cant components of deferred tax assets and liabilities were as follows:
(in millions) 2005 2004
Deferred tax assets
Pension and postretirement obligations $ 1,132 $ 835
Restructuring programs 91 145
Foreign tax credit 447 189
Investment tax credits 148 148
Employee deferred compensation 105 214
Inventories 4 84
Tax loss carryforwards 220 234
Other 426 384
Total deferred tax assets 2,573 2,233
Deferred tax liabilities
Depreciation 534 584
Leasing 78 101
Other 119 298
Total deferred tax liabilities 731 983
Valuation allowance 1,406 284
Net deferred tax assets $ 436 $ 966
Deferred tax assets (liabilities) are reported in the following components within the Consolidated Statement of Financial Position:
(in millions) 2005 2004
Deferred income taxes (current) $ 100 $ 556
Other long-term assets 450 521
Accrued income taxes (81) (44)
Other long-term liabilities (33) (67)
Net deferred tax assets $ 436 $ 966
At December 31, 2005, the Company had available net operating loss carryforwards both inside and outside of the U.S. of approximately $584 million
for income tax purposes, of which approximately $373 million has an indefi nite carryforward period. The remaining $211 million expires between the
years 2006 and 2025. Utilization of these net operating losses may be subject to limitations in the event of signifi cant changes in stock ownership of
the Company. The Company also has $447 million of unused foreign tax credits at December 31, 2005, with various expiration dates through 2015.
The valuation allowance as of December 31, 2005 of $1,406 million is attributable to $177 million of net foreign deferred tax assets, including certain
net operating loss and capital loss carryforwards and $1,229 million of U.S. net deferred tax assets, including current year losses and credits, which
the Company is unable to benefi t. The valuation allowance as of December 31, 2004 of $284 million is attributable to certain net operating loss and
capital loss carryforwards outside the U.S. and to other tax credits in the U.S.
The Company has recognized the balance of its deferred tax assets on the belief that it is more likely than not that they will be realized. This belief
is based on an assessment of all available evidence, including an evaluation of scheduled reversals of deferred tax assets and liabilities, estimates of
projected future taxable income, carryback potential and tax planning strategies.