DuPont 2008 Annual Report Download - page 72

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6. PROVISION FOR INCOME TAXES
2008 2007 2006
Current tax expense (benefit):
U.S. federal $14 $ 372 $ 505
U.S. state and local (3) 10 (1)
International 327 335 307
338 717 811
Deferred tax expense (benefit):
U.S. federal 210 92 (297)
U.S. state and local -(21) (18)
International (167) (40) (300)
43 31 (615)
Provision for income taxes $ 381 $ 748 $ 196
Stockholders’ equity:
Stock compensation
1
(3) (25) (2)
Net revaluation and clearance of cash flow hedges to earnings
2
(113) 15 9
Net unrealized (losses) gains on securities
2
(5) 23
Minimum pension liability
2
-- 248
Pension benefits
Net losses
3
(2,209) 383 (1,048)
Prior service cost
3
55 (51)
Other benefits
Net losses
3
(113) 223 (391)
Net prior service benefit
3
(38) (55) 447
$(2,095) $1,296 $ (589)
1
Represents deferred tax benefits for certain stock compensation amounts that are deductible for income tax purposes but do not affect net income.
2
Represents deferred tax charges (benefits) recorded as a component of accumulated other comprehensive loss in stockholders’ equity. See Note 20.
3
On December 31, 2006, the company adopted prospectively SFAS 158 and as required, the company included in the ending balance of
accumulated other comprehensive loss, taxes associated with the gains and losses and prior service costs and credits, that pursuant to
SFAS No. 87 and 106 prior to amendment by SFAS 158 had not been recognized as components of net periodic benefit cost. The 2008 tax benefit
primarily resulted from the actuarial loss recorded in other comprehensive income as part of the annual defined benefit pension re-measurement.
Deferred income taxes result from temporary differences between the financial and tax basis of the company’s
assets and liabilities. The tax effects of temporary differences and tax loss/tax credit carryforwards/backs included in
the deferred income tax provision are as follows:
2008 2007 2006
Depreciation $16 $ (6) $ (12)
Accrued employee benefits 270 30 (125)
Other accrued expenses (20) 41 (329)
Inventories 17 (7) (52)
Unrealized exchange (loss) (15) (38) (62)
Investment in subsidiaries and affiliates (20) (18) 7
Amortization of intangibles (54) (18) (14)
Other temporary differences (81) 29 92
Tax loss/tax credit carryforwards/backs (21) (22) 65
Valuation allowance – net (49) 40 (185)
$43 $ 31 $(615)
F-16
E. I. du Pont de Nemours and Company
Notes to the Consolidated Financial Statements (continued)
(Dollars in millions, except per share)