UPS 2009 Annual Report Download - page 110

UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Deferred tax liabilities and assets are comprised of the following at December 31 (in millions):
2009 2008
Property, plant and equipment ......................................... $3,141 $3,047
Goodwill and intangible assets ......................................... 791 694
Other ............................................................. 401 352
Gross deferred tax liabilities ........................................... 4,333 4,093
Other postretirement benefits .......................................... 990 944
Pension plans ....................................................... 956 1,425
Loss and credit carryforwards (non-U.S. and state) ......................... 315 264
Insurance reserves ................................................... 634 617
Vacation pay accrual ................................................. 186 192
Stock compensation .................................................. 244 214
Other ............................................................. 589 534
Gross deferred tax assets .............................................. 3,914 4,190
Deferred tax assets valuation allowance .................................. (237) (117)
Net deferred tax asset ................................................ 3,677 4,073
Net deferred tax liability .............................................. $ 656 $ 20
Amounts recognized in the balance sheet:
Current deferred tax assets ............................................ $ 585 $ 494
Current deferred tax liabilities (included in other current liabilities) ............ $ 2 $ —
Non-current deferred tax assets (included in other non-current assets) .......... $ 54 $ 74
Non-current deferred tax liabilities ...................................... $1,293 $ 588
The valuation allowance increased by $120, $61, and $13 million during the years ended December 31,
2009, 2008 and 2007, respectively.
We have U.S. state and local operating loss and credit carryforwards as follows (in millions):
2009 2008
U.S. state and local operating loss carryforwards ........................... $1,178 $1,320
U.S. state and local credit carryforwards ................................. $ 65 $ 74
The operating loss carryforwards expire at varying dates through 2029. The state credits can be carried
forward for periods ranging from three years to indefinitely.
We also have non-U.S. loss carryforwards of approximately $1.053 billion as of December 31, 2009, the
majority of which may be carried forward indefinitely. As indicated in the table above, we have established a
valuation allowance for certain non-U.S. and state loss carryforwards, due to the uncertainty resulting from a lack
of previous taxable income within the applicable tax jurisdictions.
Undistributed earnings of our non-U.S. subsidiaries amounted to approximately $2.178 billion at
December 31, 2009. Those earnings are considered to be indefinitely reinvested and, accordingly, no U.S. federal
or state deferred income taxes have been provided thereon. Upon distribution of those earnings in the form of
98