GLOBAL REACH. LEADlNG TECHNOLOGY. - Zonebourse.com

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Joy Global Inc. Notes to Consolidated Financial Statements October 31, 2008 iscal 2008. During alternative minimum tax credits and general business tax credits of $31.2 million in fiscal 2008. During in China. The fiscal tax 2008, we recognized $6.6 million of current tax benefit relating to a tax holiday in China. The tax holiday will expire in 2012. omestic and foreign The components of income from continuing operations before income taxes for our domestic and foreign operations were as follows: 48 09 57 In thousands 2008 2007 2006 Domestic income $ 324,053 $ 263,680 $ 247,048 Foreign income 203,034 185,379 203,309 Pre-tax income from continuing operations $ 527,087 $ 449,059 $ 450,357 tatement of Income The reconciliation between the income tax provision recognized in our Consolidated Statement of Income to the income from and the income tax provision computed by applying the statutory federal income tax rate to the income from continuing operations are as follows: In thousands 2008 2007 2006 Income tax computed at federal statutory tax rate $ 184,880 $ 157,170 $ 157,625 Sub-part F income and foreign dividends 96,677 19,748 14,981 Differences in foreign and U.S. tax rates (18,713) (13,858) (15,585) State income taxes, net of federal tax impact 11,581 4,101 2,939 Resolution of prior years' tax issues 11,049 1,890 (13,801) Foreign tax credits (139,512) - - Valuation allowance (3,495) (1,281) (110,399) Other items, net 11,483 1,505 (259) $ 153,950 $ 169,275 $ 35,501 The components of the net deferred tax asset are as follows: F-18 In thousands 2008 2007 Deferred tax assets: Reserves not currently deductible $ 15,562 $ 15,315 Employee benefit related items 156,248 130,134 Tax credit carryforwards 24,651 31,009 Tax loss carryforwards 180,031 197,420 Inventories 21,432 21,199 Other, net 8,744 16,361 Valuation allowance (112,933) (115,490) Total deferred tax assets 293,735 295,948 Deferred tax liabilities: Depreciation and amortization in excess of book expense 23,557 26,039 Intangibles 51,736 - Total deferred tax liabilities 75,293 26,039 Net deferred tax asset $ 218,442 $ 269,909 F-18
Joy Global Inc. Notes to Consolidated Financial Statements October 31, 2008 The net deferred tax assets are reflected in the accompanying balance sheets as follows: In thousands 2008 2007 Current deferred tax assets $ 39,300 $ 35,078 Long term deferred tax asset 255,313 248,139 Current deferred tax liability - - Long term deferred tax liability (76,171) (13,308) Net deferred tax asset $ 218,442 $ 269,909 At October 31, 2008, we had general business tax credits of $4.9 million expiring in 2012 and 2013, alternative minimum tax credit carryforwards of $4.3 million, which do not expire, and foreign tax credits of $15.5 million, which expire in 2018. We have tax loss carryforwards consisting of a gross U.S. Federal operating loss carryforward of $165.7 million expiring in 2020 with a net tax benefit of $58.0 million; tax benefits related to U.S. state operating loss carryforwards of $103.1 million with various expiration dates; and tax benefits related to foreign carryforwards of $8.9 million with tax benefits of $8.1 million that have no expiration date and $0.8 million expiring in 2010 through 2015. Future tax benefits related to the recognition of net operating losses are subject to review as to the future realizability of these amounts. As such, valuation reserves have been established against those loss carryforward amounts for which realizability was not considered more likely than not, which amounted to $2.6 million relating to foreign operating loss carryforwards and $100.7 million relating to U.S. state operating loss carryforwards as of October 31, 2008. Because our Plan of Reorganization provided for substantial changes in our ownership, there are annual limitations on all of U.S. federal net operating loss carryforwards remaining at October 31, 2008. The U.S. state limitations vary by taxing jurisdiction. At least annually, we reassess our need for valuation allowances and adjust the allowance balances where it is appropriate based upon past, current, and projected profitability in the various geographical areas in which we conduct business and available tax strategies. Additionally, the U.S. carryforwards were reduced upon emergence from bankruptcy due to the rules and regulations in the Internal Revenue Code related to cancellation of indebtedness income that is excluded from taxable income. These adjustments are included in the net operating loss values detailed above. At October 31, 2008, our net deferred tax asset, including loss and credit carryforwards and including valuation allowances, was $218.4 million. We have reviewed the realization of net operating losses, tax credits, and net other deferred tax assets in each statutory location in which we conduct our business and established valuation allowances against those net deferred tax assets whose realizability we have determined does not meet the more likely than not criteria of SFAS No. 109, “Accounting for Income Taxes.” Additionally, our emergence from bankruptcy in fiscal 2001 did not create a new tax reporting entity. Accordingly, the adjustments required to adopt fresh start accounting are not applicable for our tax reporting. In addition, as it relates to the valuation allowances currently recorded that arose in pre-emergence years, our reorganization has resulted in a significantly modified capital structure by which Statement of Position 90-7, “Financial Reporting by Entities in Reorganization Under the Bankruptcy Code,” requires us to apply fresh start accounting. Under fresh start accounting, reversals of valuation allowances recorded against deferred tax assets that existed as of the emergence date will first reduce any excess reorganization value until exhausted, then other intangibles until exhausted, and thereafter are reported as additional paid in capital. As of October 31, 2008, there were $70.5 million of valuation reserves against pre-emergence net operating loss F-19
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global reach. leading technology. j
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f i n a n c i a l h i g h l i g h t
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than doubled from 2007, while after
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future revenues. The ultra-class dr
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UNITED STATES SECURITIES AND EXCHAN
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PART I This document contains forwa
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connected bridge structures that ut
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Fiscal 2008 Developments: • First
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Raw Materials Joy purchases electri
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