Xerox 2007 Annual Report Download - page 69

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• These impacts were partially offset by losses in certain
jurisdictions where we are not providing tax benefits
and continue to maintain deferred tax valuation
allowances.
Our effective tax rate will change based on
nonrecurring events as well as recurring factors including
the geographical mix of income before taxes and the
related tax rates in those jurisdictions and available
foreign tax credits. In addition, our effective tax rate will
change based on discrete or other nonrecurring events
(such as audit settlements) that may not be predictable.
We anticipate that our effective tax rate for 2008 will
approximate 30%, excluding the effect of any discrete
items.
Equity in Net Income of Unconsolidated Affiliates
2007 equity in net income of unconsolidated
affiliates of $97 million is principally related to our 25%
share of Fuji Xerox (“FX”) income. The $17 million
reduction from 2006 is primarily due to $30 million in our
after-tax share of FX restructuring charges.
Income from Discontinued Operations
As disclosed in Note 15 – Income and Other Taxes in
the Consolidated Financial Statements, in June 2005 the
1996-1998 Internal Revenue Service (“IRS”) audit was
finalized. Of the total tax benefits realized, $53 million
was attributed to our discontinued operations.
Recent Accounting Pronouncements
Refer to Note 1 – Summary of Significant Accounting
Policies in the Consolidated Financial Statements for a
description of recent accounting pronouncements
including the respective dates of adoption and the effects
on results of operations and financial condition.
Xerox Annual Report 2007 67