Sunoco 2008 Annual Report Download - page 80
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The reconciliation of income tax expense at the U.S. statutory rate to the income tax expense is as follows
(in millions of dollars):
2008 2007 2006
Income tax expense at U.S. statutory rate of 35 percent ........... $411 $493 $553
Increase (reduction) in income taxes resulting from:
Manufacturers’ deduction .................................. (21) (19) (13)
Prior-year federal income tax adjustments .................... (13) (4) —
State income taxes, net of federal income tax effects
(see below) ........................................... 41 71 71
Nonconventional fuel credits ............................... (16) (17) (9)
Other .................................................. (5) (6) (1)
$397 $518 $601
The tax effects of temporary differences which comprise the net deferred income tax liability are as follows
(in millions of dollars):
December 31
2008 2007
Deferred tax assets:
Retirement benefit liabilities ................................... $ 288 $ 131
Environmental remediation liabilities ............................ 41 34
Other liabilities not yet deductible .............................. 186 184
Inventories ................................................ 104 90
Other ..................................................... 22 13
641 452
Deferred tax liabilities:
Properties, plants and equipment .............................. (1,329) (1,315)
Other ..................................................... (33) (34)
(1,362) (1,349)
Net deferred income tax liability ............................. $ (721) $ (897)
The net deferred income tax liability is classified in the consolidated balance sheets as follows (in millions
of dollars):
December 31
2008 2007
Current asset ................................................ $138 $ 130
Noncurrent liability ............................................ (859) (1,027)
$(721) $ (897)
Net cash payments for income taxes were $234, $397 and $528 million in 2008, 2007 and 2006,
respectively.
During 2008, Sunoco recorded a $16 million after-tax gain related primarily to tax credits claimed on
amended federal income tax returns filed for certain prior-years and a $10 million after-tax gain due to the
settlement of economic nexus issues pertaining to certain state corporate income tax returns.
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