Motorola 2007 Annual Report Download - page 103

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Using quoted market prices and market interest rates, the Company determined that the fair value of long-
term debt at December 31, 2007 was $4.2 billion, compared to a carrying value of $4.2 billion. Since considerable
judgment is required in interpreting market information, the fair value of the long-term debt is not necessarily
indicative of the amount which could be realized in a current market exchange.
6. Income Taxes
Components of earnings (loss) from continuing operations before income taxes are as follows:
Years Ended December 31 2007 2006 2005
United States $(2,540) $1,034 $3,232
Other nations 2,150 3,576 3,180
$ (390) $4,610 $6,412
Components of income tax expense (benefit) are as follows:
Years Ended December 31 2007 2006 2005
United States $40 $ 10 $ 240
Other nations 402 488 638
States (U.S.) 20 13 15
Current income tax expense 462 511 893
United States (633) 892 891
Other nations (50) (147) (42)
States (U.S.) (64) 93 151
Deferred income tax expense (benefit) (747) 838 1,000
Total income tax expense (benefit) $(285) $1,349 $1,893
Deferred tax charges (benefits) that were recorded within Non-owner changes to equity in the Company’s
consolidated balance sheets resulted from fair value adjustments to available-for-sale securities, net unrealized
losses on securities, net gains (losses) on derivative instruments and retirement benefit adjustments. The
adjustments were $306 million, $(182) million and $(753) million for the years ended December 31, 2007, 2006
and 2005, respectively. Except for certain earnings that the Company intends to reinvest indefinitely, provisions
have been made for the estimated U.S. federal income taxes applicable to undistributed earnings of
non-U.S. subsidiaries. Undistributed earnings that the Company intends to reinvest indefinitely, and for which no
U.S. federal income taxes have been provided, aggregate $4.1 billion, $4.0 billion and $2.8 billion at December 31,
2007, 2006 and 2005, respectively. The portion of earnings not reinvested indefinitely may be distributed without
an additional U.S. federal income tax charge given the U.S. federal tax accrued on undistributed earnings and the
utilization of available foreign tax credits.
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