Pizza Hut 2008 Annual Report Download - page 215
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93
Note 19 – Income Taxes
The details of our income tax provision (benefit) are set forth below:
2008 2007 2006
Current: Federal
$
168 $ 175 $ 181
Forei
g
n 148 151 131
State
(
1
)
(
3
)
2
315 323 314
Deferred: Federal
(
12
)
(
71
)
(
33
)
Forei
g
n 3 27
(
13
)
Sta
t
e 10 3 16
1
(
41
)
(
30
)
$
316 $ 282 $ 284
The deferred tax provision includes $30 million and $120 million of benefit in 2008 and 2007, respectively, and $4
million of expense in 2006 for changes in valuation allowances due to changes in determinations regarding the likelihood
of the use of certain deferred tax assets that existed at the beginning of the year. The deferred tax provisions also include
$43 million, $16 million and $72 million in 2008, 2007 and 2006, respectively, for increases in valuation allowances
recorded against deferred tax assets generated during the year. Total changes in valuation allowances, including the
impact of foreign currency translation and other adjustments, were decreases of $54 million and $37 million in 2008 and
2007, respectively, and an increase of $112 million in 2006. See additional discussion of federal valuation allowances
adjustments in the effective tax rate discussion on the following page.
The deferred foreign tax provision includes less than $1 million, $17 million and $2 million of expense in 2008, 2007 and
2006 respectively, for the impact of changes in statutory tax rates in various countries. Additionally, in 2008, the deferred
foreign tax provision included $36 million of expense offset by the same amount in the current foreign tax provision that
resulted from a tax law change. The $17 million of expense for 2007 includes $20 million for the Mexico tax law change
enacted during the fourth quarter of 2007. The 2008 deferred state tax provision includes $18 million ($12 million, net of
federal tax) of expense for the impact associated with our plan to distribute certain foreign earnings. The 2007 deferred
state tax provision includes $4 million ($3 million, net of federal tax) of benefit for the impact of state law changes. The
2006 deferred state tax provision includes $12 million ($8 million, net of federal tax) of expense for the impact of state
law changes.
Form 10-K