Garmin 2008 Annual Report Download - page 93

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71
December 27, December 29, December 30,
2008 2007 2006
Federal income tax expense at
U.S. statutory rate $332,278 $342,396 $208,094
State income tax expense, net of
federal tax effect 2,030 5,922 658
Foreign tax rate differential (233,928) (230,243) (112,903)
Taiwan tax holiday benefit (24,904) (44,128) (50,905)
Net change in uncertain tax postions 87,800 56,100 37,544
Other foreign taxes less
incentives and credits 20,428 (117) 5,901
Other, net (2,186) (6,668) (7,958)
Income tax expense $181,518 $123,262 $80,431
Fiscal Year Ended
The Company’s income before income taxes attributable to non-U.S. operations was $823,364, $850,102,
and $508,367, for the years ended December 27, 2008, December 29, 2007, and December 30, 2006, respectively.
The Taiwan tax holiday benefits included in the table above reflect $0.12, $0.20, and $0.24 per weighted-average
common share outstanding for the years ended December 27, 2008, December 29, 2007, and December 30, 2006,
respectively. The Company currently expects to benefit from these Taiwan tax holidays through 2013, at which
time these tax benefits expire.
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of
assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant
components of the Company’s deferred tax assets and liabilities are as follows:
December 27, December 29, December 30,
2008 2007 2006
Deferred tax assets:
Product warranty accruals $1,696 $18,975 $11,259
Allowance for doubtful accounts 15,098 2,430 1,327
Inventory reserves 5,331 7,699 4,555
Sales program allowances 14,471 42,832 12,629
Reserve for sales returns 2,914 5,565 1,660
Other accrual 5,411 3,911 2,424
Unrealized intercompany profit in inventory 3,601 30,006 21,115
Unrealized foreign currency loss - - 325
Stock option compensation 20,375 8,887 3,720
Tax credit carryforwards, net 36,406 15,198 30,287
Net operating losses of subsidiaries 2,809 1,800 195
Other 5,022 4,649 4,225
Valuation allowance: NOL, loss carryforward, tax credits (34,487) (15,491) (28,301)
78,647 126,461 65,420
Deferred tax liabilities:
Depreciation 12,872 9,209 7,883
Prepaid Expenses 3,031 6,498 -
Unrealized foreign currency loss 522 161 -
Book basis in excess of tax basis for acquired entities 15,936 14,867 -
Unrealized investment gain 153 31 278
Other 378 254 2,454
32,892 31,020 10,615
N
et deferred tax assets $45,755 $95,441 $54,805