Kodak 2009 Annual Report Download - page 90

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Deferred Tax Assets and Liabilities
The significant components of deferred tax assets and liabilities were as follows:
As of December 31,
(in millions) 2009 2008
Deferred tax assets
Pension and postretirement obligations $ 803 $ 534
Restructuring programs 16 28
Foreign tax credit 350 270
Inventories 15 -
Investment tax credit 159 168
Employee deferred compensation 91 84
Research and development costs 146 29
Tax loss carryforwards 931 912
Other deferred revenue 32 35
Other 486 453
Total deferred tax assets $ 3,029 $ 2,513
Deferred tax liabilities
Depreciation 26 59
Leasing 51 58
Inventories - 16
Other 143 136
Total deferred tax liabilities 220 269
Net deferred tax assets before valuation allowance 2,809 2,244
Valuation allowance 2,092 1,665
Net deferred tax assets $ 717 $ 579
Deferred tax assets (liabilities) are reported in the following components within the Consolidated Statement of Financial Position:
As of December 31,
(in millions) 2009 2008
Other current assets $ 121 $ 114
Other long-term assets 607 506
Accrued income and other taxes - (4)
Other long-term liabilities (11) (37)
Net deferred tax assets $ 717 $ 579
As of December 31, 2009, the Company had available domestic and foreign net operating loss carryforwards for income tax
purposes of approximately $3,046 million, of which approximately $561 million have an indefinite carryforward period. The remaining
$2,485 million expire between the years 2010 and 2029. 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, 2009, the Company had unused foreign tax
credits and investment tax credits of $350 million and $159 million, respectively, with various expiration dates through 2029.
The Company has been granted a tax holiday in certain jurisdictions in China that becomes effective when the net operating loss
carryforwards are fully utilized. The Company is eligible for a 50% reduction of the income tax rate as a tax holiday incentive. The tax
rate currently varies by jurisdiction, due to the tax holiday, and will be 25% in all jurisdictions within China in 2012.
Retained earnings of subsidiary companies outside the U.S. were approximately $1,842 million and $1,814 million as of December
31, 2009 and 2008, respectively. Deferred taxes have not been provided on such undistributed earnings, as it is the Company’s
policy to indefinitely reinvest its retained earnings. Further, it is not practicable to determine the related deferred tax liability.
However, the Company periodically repatriates a portion of these earnings to the extent that it can do so tax-free, or at minimal cost.