Motorola 2011 Annual Report Download - page 87

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Components of income tax expense (benefit) are as follows:
Years Ended December 31 2011 2010 2009
United States $2$ (45) $ 66
Other nations 30 183 88
States (U.S.) 374 6
Current income tax expense 35 212 160
United States (118) 373 (49)
Other nations 111 (54) 103
States (U.S.) (31) (128) (26)
Deferred income tax expense (benefit) (38) 191 28
Total income tax expense (benefit) $ (3) $ 403 $188
Deferred tax charges that were recorded within Accumulated other comprehensive 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 $(259) million, $41 million and $(26) million for the years ended December 31, 2011, 2010 and 2009,
respectively.
The Company evaluates its permanent reinvestment assertions with respect to foreign earnings at each
reporting period and, except for certain earnings that the Company intends to reinvest indefinitely due to the capital
requirements of the foreign subsidiaries or due to local country restrictions, accrues for the U.S. federal and foreign
income tax applicable to the earnings. Undistributed earnings that the Company intends to reinvest indefinitely, and
for which no income taxes have been provided, aggregate to $1.0 billion, $1.3 billion and $2.4 billion at
December 31, 2011, 2010 and 2009, respectively. We currently have no plans to repatriate the foreign earnings
permanently reinvested and therefore, the time and manner of repatriation is uncertain. If circumstances change and
it becomes apparent that some or all of the permanently reinvested earnings will be remitted in the foreseeable
future, an additional income tax charge may be necessary; however, given the uncertain repatriation time and
manner, at December 31, 2011, it is not practicable to estimate the amount of any additional income tax charge on
permanently reinvested earnings. On a cash basis, these repatriations from our non-U.S. subsidiaries could require
the payment of additional taxes. The portion of earnings not reinvested indefinitely may be distributed without an
additional income tax charge given the U.S. federal and foreign income tax accrued on undistributed earnings and
the utilization of available foreign tax credits.
Differences between income tax expense computed at the U.S. federal statutory tax rate of 35% and income tax
expense (benefit) as reflected in the Consolidated Statements of Operations are as follows:
Years Ended December 31 2011 2010 2009
Income tax expense at statutory rate $ 258 $232 $222
Taxes on non-U.S. earnings (23) (10) (22)
State income taxes (2) (35) (11)
Valuation allowances (237) (18) (28)
Tax on undistributed non-U.S. earnings 51 287 45
Other provisions (17) (45) (5)
Research credits (11) (6) (6)
Tax law changes —18 —
Section 199 deduction (22) (20) (7)
$ (3) $403 $188
Gross deferred tax assets were $5.1 billion and $5.7 billion at December 31, 2011 and 2010, respectively.
Deferred tax assets, net of valuation allowances, were $4.7 billion and $5.2 billion at December 31, 2011 and 2010,
respectively. Gross deferred tax liabilities were $1.7 billion and $2.4 billion at December 31, 2011 and 2010,
respectively.