Best Buy 2008 Annual Report Download - page 95
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$ in millions, except per share amounts or as otherwise noted
offset a substantial portion of our exposure. The cash Income tax expense was comprised of the following in
value of the investment vehicles, which includes funding fiscal 2008, 2007 and 2006:
for future deferrals, was $83 and $82 at March 1, 2008, 2008 2007 2006
and March 3, 2007, respectively, and is included in other Current:
assets. Both the asset and the liability are carried at fair Federal $609 $609 $ 640
value. State 110 45 78
Foreign 22 16 14
8. Income Taxes
741 670 732
The following is a reconciliation of the federal statutory
Deferred:
income tax rate to income tax expense in fiscal 2008,
Federal 47 51 (131)
2007 and 2006:
State (7) 19 (14)
2008 2007 2006 Foreign 34 12 (6)
Federal income tax at the
74 82 (151)
statutory rate $ 780 $ 747 $ 603
State income taxes, net of Income tax expense $815 $752 $ 581
federal benefit 67 38 34
Deferred taxes are the result of differences between the
Benefit from foreign
bases of assets and liabilities for financial reporting and
operations (25) (36) (37)
income tax purposes. Deferred tax assets and liabilities
Non-taxable interest
were comprised of the following:
income (17) (34) (28)
March 1, March 3,
Other 10 37 9 2008 2007
Income tax expense $ 815 $ 752 $ 581 Accrued property expenses $ 122 $ 105
Other accrued expenses 50 19
Effective income tax rate 36.6% 35.3% 33.7%
Deferred revenue 68 79
Earnings from operations before income tax expense,
Compensation and benefits 61 71
minority interest and equity in loss of affiliates by
Stock-based compensation 96 74
jurisdiction was as follows in fiscal 2008, 2007 and 2006:
Net operating loss carryforwards 32 10
2008 2007 2006 Goodwill — 3
United States $1,931 $1,949 $1,617 Other 63 57
Outside the United States 297 181 104 Total deferred tax assets 492 418
Earnings from operations Valuation allowance (9) —
before income tax Total deferred tax assets after
expense, minority valuation allowance 483 418
interest and equity in
Property and equipment (218) (168)
loss of affiliates $2,228 $2,130 $1,721
Convertible debt (53) (44)
Goodwill and intangibles (17) —
Other (36) (27)
Total deferred tax liabilities (324) (239)
Net deferred tax assets $ 159 $ 179
87