Kodak 2010 Annual Report Download - page 76

74
Deferred Tax Assets and Liabilities
The significant components of deferred tax assets and liabilities were as follows:
As of December 31,
(in millions)
2010
2009
Deferred tax assets
Pension and postretirement obligations
$ 809
$ 803
Restructuring programs
7
16
Foreign tax credit
477
350
Inventories
23
15
Investment tax credit
160
159
Employee deferred compensation
80
91
Depreciation
28
-
Research and development costs
184
146
Tax loss carryforwards
1,181
931
Other deferred revenue
-
32
Other
423
486
Total deferred tax assets
$ 3,372
$ 3,029
Deferred tax liabilities
Depreciation
-
26
Leasing
47
51
Other deferred debt
15
-
Other
175
143
Total deferred tax liabilities
237
220
Net deferred tax assets before valuation allowance
3,135
2,809
Valuation allowance
2,335
2,092
Net deferred tax assets
$ 800
$ 717
Deferred tax assets (liabilities) are reported in the following components within the Consolidated Statement of Financial Position:
As of December 31,
(in millions)
2010
2009
Deferred income taxes (current)
$ 120
$ 121
Other long-term assets
695
607
Accrued income taxes
(7)
-
Other long-term liabilities
(8)
(11)
Net deferred tax assets
$ 800
$ 717
As of December 31, 2010, the Company had available domestic and foreign net operating loss carryforwards for income tax
purposes of approximately $3,690 million, of which approximately $609 million have an indefinite carryforward period. The remaining
$3,081 million expire between the years 2011 and 2030. 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, 2010, the Company had unused foreign tax
credits and investment tax credits of $477 million and $160 million, respectively, with various expiration dates through 2030.
The Company has been granted a tax holiday in certain jurisdictions in China. 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 2013.
Retained earnings of subsidiary companies outside the U.S. were approximately $2,398 million and $1,842 million as of December
31, 2010 and 2009, 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.