Motorola 2009 Annual Report Download - page 106
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98
Components of income tax expense (benefit) are as follows:
Years Ended December 31 2009 2008 2007
United States $ (314) $ (618) $ 40
Other nations 181 532 402
States (U.S.) 6(5) 20
Current income tax expense (127) (91) 462
United States 41,702 (633)
Other nations 97 49 (50)
States (U.S.) (51) (53) (64)
Deferred income tax expense (benefit) 50 1,698 (747)
Total income tax expense (benefit) $ (77) $1,607 $(285)
Deferred tax charges (benefits) that were recorded within Accumulated other comprehensive income (loss) in
the Company’s consolidated balance sheets resulted from retirement benefit adjustments, currency translation
adjustments, net gains (losses) on derivative instruments and fair value adjustments to available-for-sale securities.
The adjustments were ($25) million, ($738) million and $306 million for the years ended December 31, 2009,
2008 and 2007, 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 to $2.4 billion, $2.9 billion and $4.1 billion at
December 31, 2009, 2008 and 2007, 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.
Differences between income tax expense (benefit) computed at the U.S. federal statutory tax rate of 35% and
income tax expense (benefit) are as follows:
Years Ended December 31 2009 2008 2007
Income tax expense (benefit) at statutory rate $(58) $ (921) $(131)
Taxes on non-U.S. earnings (15) 123 (212)
State income taxes (29) (38) (28)
Valuation allowances (28) 2,321 (97)
Goodwill impairment —555 —
Tax on undistributed non-U.S. earnings 96 119 72
Other provisions (48) (541) 119
Research credits (18) (13) (46)
Non-deductible acquisition charges 13 —34
Taxes on sale of businesses ——15
Other non-deductible costs 11 ——
Section 199 deduction (8) ——
Other 72 (11)
$(77) $1,607 $(285)
Gross deferred tax assets were $8.9 billion and $9.8 billion at December 31, 2009 and 2008, respectively.
Deferred tax assets, net of valuation allowances, were $6.0 billion and $7.2 billion at December 31, 2009 and
2008, respectively. Gross deferred tax liabilities were $2.7 billion and $3.7 billion at December 31, 2009 and
2008, respectively.