DuPont 2011 Annual Report Download - page 64

Table of Contents E. I. du Pont de Nemours and Company
Notes to the Consolidated Financial Statements (continued)
(Dollars in millions, except per share)
Consolidated income before income taxes for U.S. and international operations was as follows:
2011 2010 2009
U.S. (including exports) $ 860 $ 949 $ 171
International 3,422 2,762 2,013
$ 4,282 $ 3,711 $ 2,184
The decrease in U.S. pre-tax earnings from 2010 to 2011 is primarily driven by the results of the company's hedging program. In 2010, the U.S. recorded $117
of exchange gains associated with the hedging program, however, in 2011, the program resulted in the company recording $133 of exchange losses. This
swing in the exchange gains and losses year over year offsets underlying recovery in the U.S. economy. While the taxation of the amounts reflected on the
chart above does not correspond precisely to the jurisdiction of taxation (due to taxation in multiple countries, exchange gains/losses, etc.), it represents a
reasonable approximation of the income before income taxes split between U.S. and international jurisdictions. See Note 19 for additional information
regarding the company's hedging program.
Under the tax laws of various jurisdictions in which the company operates, deductions or credits that cannot be fully utilized for tax purposes during the
current year may be carried forward or back, subject to statutory limitations, to reduce taxable income or taxes payable in future or prior years. At
December 31, 2011, the tax effect of such carryforwards/backs, net of valuation allowance approximated $1,428. Of this amount, $1,204 has no expiration
date, $70 expires after 2011 but before the end of 2016 and $154 expires after 2016.
At December 31, 2011, unremitted earnings of subsidiaries outside the U.S. totaling $13,350 were deemed to be indefinitely reinvested. No deferred tax
liability has been recognized with regard to the remittance of such earnings. It is not practical to estimate the income tax liability that might be incurred if such
earnings were remitted to the U.S.
Each year the company files hundreds of tax returns in the various national, state and local income taxing jurisdictions in which it operates. These tax returns
are subject to examination and possible challenge by the taxing authorities. Positions challenged by the taxing authorities may be settled or appealed by the
company. As a result, there is an uncertainty in income taxes recognized in the company's financial statements in accordance with accounting for income taxes
and accounting for uncertainty in income taxes. It is reasonably possible that changes to the company's global unrecognized tax benefits could be significant,
however, due to the uncertainty regarding the timing of completion of audits and possible outcomes, a current estimate of the range of increases or decreases
that may occur within the next twelve months cannot be made.
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