Tyson Foods 2009 Annual Report Download - page 71

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71
The tax effects of major items recorded as deferred tax assets and liabilities are as follows:
in millions
2009
2008
Deferred Tax
Deferred Tax
Assets
Liabilities
Assets
Liabilities
Property, plant and equipment
$
-
$
339
$
-
$
365
Suspended taxes from conversion to accrual method
-
91
-
96
Intangible assets
-
34
-
30
Inventory
19
76
13
89
Accrued expenses
151
-
167
-
Net operating loss and other carryforwards
103
-
124
-
Note hedge transactions
30
-
36
-
Insurance reserves
22
-
22
-
Prepaids
-
20
-
23
Other
114
54
58
48
$
439
$
614
$
420
$
651
Valuation allowance
$
(75
)
$
(49
)
Net deferred tax liability
$
250
$
280
We record deferred tax amounts in Other Current Assets and in Deferred Income Taxes on the Consolidated Balance Sheets.
The deferred tax liability for suspended taxes from conversion to accrual method represents the 1987 change from the cash to accrual
method of accounting and will be recognized by 2027.
At October 3, 2009, our gross federal tax net operating loss carryforward approximated $45 million. This carryforward expires in
fiscal year 2024. Gross state tax net operating loss carryforwards approximated $803 million and expire in fiscal years 2010 through
2028. Gross foreign net operating loss carryforwards approximated $143 million, of which $87 million expire in fiscal years 2011
through 2019, and the remainder has no expiration.
We have accumulated undistributed earnings of foreign subsidiaries aggregating approximately $220 million and $219 million at
October 3, 2009 and September 27, 2008, respectively. These earnings are expected to be indefinitely reinvested outside of the United
States. If those earnings were distributed in the form of dividends or otherwise, we would be subject to federal income taxes (subject
to an adjustment for foreign tax credits), state income taxes and withholding taxes payable to the various foreign countries. It is not
currently practicable to estimate the tax liability that might be payable on the repatriation of these foreign earnings.
The following table summarizes the activity related to our gross unrecognized tax benefits at October 3, 2009, and September 27,
2008.
in millions
2009
2008
Balance as of the beginning of the year
$
220
$
210
Increases related to current year tax positions
7
23
Increases related to prior year tax positions
60
36
Reductions related to prior year tax positions
(21
)
(28
)
Reductions related to settlements
(25
)
(14
)
Reductions related to expirations of statute of limitations
(8
)
(7
)
Balance as of the end of the year
$
233
$
220