Waste Management 2008 Annual Report Download - page 120
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Please find page 120 of the 2008 Waste Management annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.Deferred tax assets (liabilities)
The components of the net deferred tax assets (liabilities) at December 31 are as follows (in millions):
2008 2007
December 31,
Deferred tax assets:
Net operating loss, capital loss and tax credit carryforwards ............... $ 168 $ 194
Landfill and environmental remediation liabilities ....................... 21 35
Miscellaneous and other reserves ................................... 249 225
Subtotal ................................................ 438 454
Valuation allowance ............................................. (135) (168)
Deferred tax liabilities:
Property and equipment ........................................ (1,012) (957)
Goodwill and other intangibles ................................... (736) (689)
Net deferred tax liabilities ..................................... $(1,445) $(1,360)
At December 31, 2008, we had $29 million of federal net operating loss, or NOL, carryforwards, $1.1 billion of
state NOL carryforwards, and $15 million of Canadian NOL carryforwards. The federal and state NOL carryfor-
wards have expiration dates through the year 2028. The Canadian NOL carryforwards have the following expiry:
$13 million in 2009 and $2 million in 2016. In addition, we have $40 million of state tax credit carryforwards at
December 31, 2008.
We have established valuation allowances for uncertainties in realizing the benefit of tax loss and credit
carryforwards and other deferred tax assets. While we expect to realize the deferred tax assets, net of the valuation
allowances, changes in estimates of future taxable income or in tax laws may alter this expectation. The valuation
allowance decreased $33 million in 2008. We realized a $3 million state tax benefit due to a reduction in the
valuation allowance related to the expected utilization of state NOL and credit carryforwards. The remaining
reduction in our valuation allowance was offset by changes in our gross deferred tax assets due to changes in state
NOL and credit carryforwards.
Liabilities for uncertain tax positions
As discussed in Note 2, we adopted FIN 48 and FSP No. 48-1 effective January 1, 2007. As a result of both of
these adoptions, we recognized, as a cumulative effect of change in accounting principle, a $28 million increase in
our liabilities for unrecognized tax benefits, a $32 million increase in our non-current deferred tax assets and a
$4 million increase in our beginning retained earnings.
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WASTE MANAGEMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)