United Airlines 2009 Annual Report Download - page 105
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Table of Contents
other comprehensive income. In 2008, UAL and United recorded tax benefits of $25 million and $22 million, respectively, primarily due to the impairment and
sale of select indefinite-lived intangibles and the impact of an increase in state tax rates. This tax benefit is small relative to the Company’s losses; consequently,
the Company’s effective tax rate is insignificant, when compared to the 35% U.S. federal statutory rate. In 2007, the Company’s regular taxable income was
completely absorbed by utilization of its net operating loss (“NOL”) carry forward; however, the Company did incur an alternative minimum tax (“AMT”)
liability of $6 million.
The significant components of the income tax expense (benefit) are as follows:
(In millions) Year Ended December 31,
UAL 2009 2008 2007
Current tax expense (benefit) $ (1) $ 1 $ 6
Deferred tax expense (benefit) (16) (26) 291
$ (17) $ (25) $ 297
United
Current tax expense $ — $ 4 $ 6
Deferred tax expense (benefit) (16) (26) 290
$ (16) $ (22) $ 296
The income tax provision differed from amounts computed at the statutory federal income tax rate, as follows:
(In millions) Year Ended December 31,
UAL 2009 2008 2007
Income tax provision at statutory rate $ (234) $ (1,896) $ 229
State income taxes, net of federal income tax benefit 5 (68) 12
Goodwill — 798 —
Nondeductible employee meals 6 7 10
Nondeductible interest expense 12 10 21
Medicare Part D Subsidy (7) (12) (2)
Valuation allowance 190 1,117 15
Share-based compensation 7 — 2
Rate change beginning deferreds — 14 —
Other, net 4 5 10
$ (17) $ (25) $ 297
(In millions) Year Ended December 31,
United 2009 2008 2007
Income tax provision at statutory rate $ (225) $ (1,882) $ 229
State income taxes, net of federal income tax benefit 6 (67) 12
Goodwill — 798 —
Nondeductible employee meals 6 7 10
Nondeductible interest expense 12 10 21
Medicare Part D Subsidy (7) (12) (2)
Valuation allowance 182 1,101 15
Share-based compensation 7 — 2
Rate change beginning deferreds — 14 —
Other, net 3 9 9
$ (16) $ (22) $ 296
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