E-Z-GO 2008 Annual Report Download - page 95

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Notes to the Consolidated Financial Statements
82
In the normal course of business, we are subject to examination by taxing authorities throughout the world, including major jurisdictions such as
Belgium, Canada, Germany, Japan, the United Kingdom and the U.S. With few exceptions, we no longer are subject to U.S. federal, state and local
or non-U.S. income tax examinations for years before 1997 in these major jurisdictions.
During 2008, 2007 and 2006, we recognized net tax-related interest expense of approximately $23 million, $11 million and $18 million,
respectively, in tax expense. At the end of 2008 and 2007, we had $59 million and $37 million, respectively, of accrued interest included in other
liabilities in our balance sheet.
The tax effects of temporary differences that give rise to significant portions of our net deferred tax assets and liabilities were as follows:
January 3, December 29,
(In millions) 2009 2007
Deferred tax assets:
Deferred revenue $ 11 $ 13
Warranty and product maintenance reserves 85 109
Self-insured liabilities, including environmental 83 89
Deferred compensation 159 224
Allowance for credit losses 90 46
Loss carryforwards 63 74
Obligation for pension and postretirement benefits 816 363
Valuation allowance on finance receivables held for sale 135 —
Foreign currency translation adjustment 31 26
Other, principally timing of other expense deductions 235 221
Total deferred tax assets 1,708 1,165
Valuation allowance for deferred tax assets (175) (169)
$ 1,533 $ 996
Deferred tax liabilities:
Leasing transactions $ (601) $ (582)
Property, plant and equipment, principally depreciation (102) (93)
Change in status of non-U.S. subsidiary (22) —
Inventory (29) (34)
Amortization of goodwill and other intangibles (157) (173)
Total deferred tax liabilities (911) (882)
Net deferred tax asset $ 622 $ 114
The valuation allowance against our deferred tax assets is due to the uncertainty of realizing the related benefits. The net deferred tax asset
balance increased primarily due to an increase in the pension and postretirement benefits liability principally related to unrealized losses on
pension plan assets.
The following table presents the breakdown between current and long-term net deferred tax assets:
January 3, December 29,
(In millions) 2009 2007
Current $ 272 $ 242
Non-current 687 344
959 586
Finance group deferred tax liability (337) (472)
Net deferred tax asset $ 622 $ 114