Dell 2006 Annual Report Download - page 88

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Table of Contents
DELL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
The components of Dell's net deferred tax asset are as follows:
Fiscal Year Ended
February 2, February 3,
2007 2006
As
Restated
(in millions)
Deferred tax assets:
Deferred revenue $ 440 $ 408
Inventory and warranty provisions 128 169
Investment impairments and unrealized gains — 21
Provisions for product returns and doubtful accounts 51 46
Capital loss 13 15
Leasing and financing 222 120
Credit carryforwards 22 —
Stock-based and deferred compensation 145 32
Other 159 93
Deferred tax assets 1,180 904
Deferred tax liabilities:
Property and equipment (96) (108)
Acquired intangibles (16) —
Other (39) (33)
Deferred tax liabilities (151) (141)
Valuation allowance (28) (7)
Net deferred tax asset $ 1,001 $ 756
Current portion (included in other current assets) $ 445 $ 442
Non-current portion (included in other non-current assets) 556 314
Net deferred tax asset $ 1,001 $ 756
A portion of Dell's foreign operations operate at a reduced tax rate or free of tax under various tax holidays which expire in
whole or in part during Fiscal 2010 through 2019. Many of these holidays may be extended when certain conditions are met.
The income tax benefits attributable to the tax status of these subsidiaries were estimated to be approximately $282 million
($0.13 per share) in Fiscal 2007, $368 million ($0.15 per share) in Fiscal 2006, and $279 million ($0.11 per share) in Fiscal
2005.
In March 2007, China announced a broad program to reform tax rates and incentives effective January 1, 2008, including
introduction of phased-in transition rules that could significantly alter the Chinese tax landscape for U.S. companies
operating in China. Clarification of the rules is expected to be issued in late Fiscal 2008.
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