DuPont 2008 Annual Report Download - page 73

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The significant components of deferred tax assets and liabilities at December 31, 2008 and 2007, are as follows:
Asset Liability Asset Liability
2008 2007
Depreciation $ - $1,407 $ - $1,392
Accrued employee benefits
1
3,645 21 1,469 196
Other accrued expenses 1,270 462 1,225 656
Inventories 241 141 238 121
Unrealized exchange gains 4-81 -
Tax loss/tax credit carryforwards/backs 2,745 - 2,830 -
Investment in subsidiaries and affiliates 24 246 38 338
Amortization of intangibles 82 588 92 643
Other 206 84 201 128
$ 8,217 $2,949 $ 6,174 $3,474
Valuation allowance (1,693) (1,424)
$ 6,524 $ 4,750
1
The increase in the deferred tax asset is primarily a result of the actuarial loss recorded in other comprehensive income as part of the annual
defined benefit pension re-measurement.
Current deferred tax assets of $643 and $564 at December 31, 2008 and 2007, respectively, are included in the
caption income taxes within current assets of the Consolidated Balance Sheets. In addition, deferred tax assets of
$3,087 and $1,523 are included in other assets at December 31, 2008 and 2007, respectively. See Note 13. Deferred
tax liabilities of $15 and $9 at December 31, 2008 and 2007, respectively, are included in the caption income taxes
within current liabilities of the Consolidated Balance Sheets.
An analysis of the company’s effective income tax rate (EITR) follows:
2008 2007 2006
Statutory U.S. federal income tax rate 35.0% 35.0% 35.0%
Exchange gains/losses
1
(0.2) (0.9) 0.6
Domestic operations (2.8) (3.2) 0.1
Lower effective tax rates on international operations-net (14.3) (7.5) (12.4)
Tax settlements (1.8) (3.4) (10.4)
Lower effective tax rate on export sales -- (0.8)
The American Jobs Creation Act of 2004 (AJCA)
2
-- (0.6)
Valuation allowance release -- (5.6)
15.9% 20.0% 5.9%
1
Principally reflects the benefit of non-taxable exchange gains resulting from remeasurement of foreign currency denominated monetary
assets and liabilities. Further information about the company’s foreign currency hedging program is included in Note 23 under the heading
Currency Risk.
2
Reflects the tax impact associated with the 2005 repatriation of $9.1 billion under the AJCA.
F-17
E. I. du Pont de Nemours and Company
Notes to the Consolidated Financial Statements (continued)
(Dollars in millions, except per share)