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Notes to Consolidated Financial StatementsNote 21: Deferred Income Taxes

Aggregate deferred income tax amounts are summarized below.

 
 
 
December 31 (In millions) 2006   2005  
ASSETS            
GE  
$ 11,990
   
$ 9,928
 
GECS   8,563     6,209  
    20,553     16,137  
LIABILITIES            
GE   13,944     13,661  
GECS   20,780     18,684  
    34,724     32,345  
Net deferred income tax liability  
$ 14,171
   
$ 16,208
 

Principal components of our net liability (asset) representing deferred income tax balances are as follows:

 
 
 
December 31 (In millions) 2006   2005  
GE            
Provision for expenses(a)  
$ (7,218
)  
$ (6,521
)
Retiree insurance plans   (2,654 )   (1,503 )
Non-U.S. loss carryforwards(b)   (1,214 )   (731 )
Prepaid pension asset — principal plans   5,257     6,249  
Contract costs and estimated earnings   2,053     1,078  
Intangible assets   1,934     1,490  
Depreciation   1,830     2,130  
Other — net   1,966     1,541  
    1,954     3,733  
GECS            
Financing leases   8,314     8,037  
Operating leases   4,327     4,024  
Intangible assets   1,278     1,195  
Allowance for losses   (1,763 )   (2,025 )
Non-U.S. loss carryforwards(b)   (835 )   (688 )
Cash flow hedges   (226 )   (372 )
Other — net   1,122     2,304  
    12,217     12,475  
Net deferred income tax liability  
$ 14,171
   
$ 16,208
 
(a) Represented the tax effects of temporary differences related to expense accruals for a wide variety of items, such as employee compensation and benefits, interest on tax liabilities, product warranties and other sundry items that are not currently deductible.
(b) Net of valuation allowances of $679 million and $890 million for GE and $203 million and $132 million for GECS, for 2006 and 2005, respectively. Of the net deferred tax asset as of December 31, 2006, of $2,049 million, $41 million relates to net operating loss carryforwards that expire in various years ending from December 31, 2007, through December 31, 2009, $698 million relates to net operating losses that expire in various years ending from December 31, 2010, through December 31, 2021, and $1,310 million relates to net operating loss carryforwards that may be carried forward indefinitely.

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