Kodak 2008 Annual Report Download - page 83

81
The refund had a positive impact of $565 million on the Company’s net earnings for the year ended December 31, 2008. Of the $565
million increase in net earnings, $295 million related to the 1994 sale of Sterling Winthrop Inc., which was reflected in earnings from
discontinued operations, net of income taxes. The balance of $270 million, which represents interest, was reflected in loss from
continuing operations and is included in the “Tax settlements and adjustments, including interest” line item above. The difference
between the cash refund received of $581 million and the positive net earnings impact of $565 million represented incremental state
tax expense incurred and the release of an existing income tax receivable related to the refund.
Deferred Tax Assets and Liabilities
The significant components of deferred tax assets and liabilities were as follows:
As of December 31,
(in millions) 2008
2007
Deferred tax assets
Pension and postretirement obligations $ 534
$ 347
Restructuring programs 28
44
Foreign tax credit 270
209
Investment tax credits 168
211
Employee deferred compensation 84
147
Tax loss carryforwards 912
577
Other deferred revenue 35
218
Other 482
455
Total deferred tax assets $ 2,513
$ 2,208
Deferred tax liabilities
Depreciation 59
85
Leasing 58
66
Inventories 16
49
Other 136
112
Total deferred tax liabilities 269
312
Net deferred tax assets before valuation allowance 2,244
1,896
Valuation allowance 1,665
1,249
Net deferred tax assets $ 579
$ 647
Deferred tax assets (liabilities) are reported in the following components within the Consolidated Statement of Financial Position:
As of December 31,
(in millions) 2008 2007
Other current assets $ 114 $ 120
Other long-term assets 506 636
Accrued income and other taxes (4) (87)
Other long-term liabilities (37) (22)
Net deferred tax assets $ 579 $ 647
As of December 31, 2008, the Company had available domestic and foreign net operating loss carryforwards for income tax
purposes of approximately $3,052 million, of which approximately $574 million have an indefinite carryforward period. The remaining
$2,478 million expire between the years 2009 and 2028. Utilization of these net operating losses may be subject to limitations in the
event of significant changes in stock ownership of the Company. As of December 31, 2008, the Company had unused foreign tax
credits and investment tax credits of $270 million and $168 million, respectively, with various expiration dates through 2028.