Boeing 2010 Annual Report Download - page 83

Net deferred tax assets at December 31 were as follows:
2010 2009
Deferred tax assets $ 14,383 $13,739
Deferred tax liabilities (10,736) (9,652)
Valuation allowance (105) (59)
Net deferred tax assets $ 3,542 $ 4,028
The measurement of deferred tax assets is reduced by a valuation allowance if, based upon available
evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.
Included in the net deferred tax assets at December 31, 2010 and 2009 are deferred tax assets in the
amounts of $8,186 and $7,226 related to other comprehensive loss.
We have provided for U.S. deferred income taxes and foreign withholding tax in the amount of $60 on
undistributed earnings not considered permanently reinvested in our non-U.S. subsidiaries. We have
not provided for U.S. deferred income taxes or foreign withholding tax on the remainder of
undistributed earnings from our non-U.S. subsidiaries because such earnings are considered to be
permanently reinvested and it is not practicable to estimate the amount of tax that may be payable
upon distribution.
As of December 31, 2010 and 2009, the amount accrued for the payment of income tax-related interest
and penalties included in the Consolidated Statements of Financial Position was as follows: interest of
$170 and $271 and penalties of $12 and $14. The amount of interest (benefit)/expense was ($105),
$45 and $43 for the years ended December 31, 2010, 2009 and 2008, respectively. The interest
benefit recorded during 2010 was primarily related to the 1998-2003 federal audit settlement.
The years 2007-2008 are currently being examined by the Internal Revenue Service (IRS), and we
have filed appeals with the IRS for 2004-2006. We are also subject to examination in major state and
international jurisdictions for the 2001-2010 tax years. We believe appropriate provisions for all
outstanding issues have been made for all jurisdictions and all open years.
A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
2010 2009 2008
Unrecognized tax benefits – January 1 $1,787 $1,453 $1,272
Gross increases – tax positions in prior periods 95 219 88
Gross decreases – tax positions in prior periods (465) (31) (28)
Gross increases – current-period tax positions 76 148 132
Gross decreases – current-period tax positions (40)
Settlements (254) (10)
Lapse of statute of limitations (1) (2) (1)
Unrecognized tax benefits – December 31 $1,198 $1,787 $1,453
As of December 31, 2010, 2009 and 2008, the total amount of unrecognized tax benefits was $1,198,
$1,787 and $1,453 of which $1,074, $1,452 and $1,171 would affect the effective tax rate, if
recognized. These amounts are primarily associated with U.S. federal tax issues such as the tax
benefits from the Foreign Sales Corporation/Extraterritorial Income tax rules, the amount of research
and development tax credits claimed, U.S. taxation of foreign earnings, and valuation issues regarding
charitable contributions claimed. Also included in these amounts are accruals for domestic state tax
issues such as the allocation of income among various state tax jurisdictions and the amount of state
tax credits claimed.
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