PACCAR 2009 Annual Report Download - page 62

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PACCAR Inc and Subsidiaries
A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
2009 2008 2007
Balance at January 1 $ 37.1 $ 57.9 $ 54.3
Additions based on tax positions and settlements
related to the current year 1.1 7.1 11.4
Additions based on tax positions and settlements
related to the prior year 14.9 2.6 8.7
Reductions for tax positions of prior years (6.5) (20.7) (11.6)
Lapse of statute of limitations (2.5) (9.8) (4.9)
Balance at December 31 $ 44.1 $ 37.1 $ 57.9
The Company had $21.8 and $15.3 of related assets at December 31, 2009 and 2008. All of the unrecognized tax
benefits and related assets would impact the effective tax rate if recognized. Based on the resolution of certain tax
examinations in January 2010, the Company anticipates a decrease of $11.3 to its unrecognized tax benefits during
the first quarter of 2010.
Interest and penalties are classified as income taxes in the accompanying statements of income and were not
significant during any of the three years ended December 31, 2009, 2008 and 2007. Amounts accrued for the
payment of penalties and interest at December 31, 2009 and 2008 were also not significant.
As of December 31, 2009, the United States Internal Revenue Service has completed examinations of the Company’s
tax returns for all years through 2004. The Company’s tax returns for other major jurisdictions remain potentially
subject to examination for the years ranging from 2003 through 2009.
O. STOCKHOLDERS’ EQUITY
Accumulated Other Comprehensive Income (Loss): Following are the components of accumulated other
comprehensive income:
At December 31, 2009 2008 2007
Unrealized gain on investments $ 1.4 $ 1.0 $ 3.2
Tax effect (.5) (.4) (1.3)
.9 .6 1.9
Unrealized loss on derivative contracts (73.4) (121.7) (18.8)
Tax effect 25.0 39.4 10.6
(48.4) (82.3) (8.2)
Pension and postretirement:
Unrecognized:
Actuarial loss (444.7) (525.9) (131.6)
Prior service cost (14.7) (16.0) (20.0)
Net initial obligation (.6) (2.3) (3.5)
Tax effect 159.9 195.9 53.3
(300.1) (348.3) (101.8)
Currency translation adjustment 383.8 160.2 516.2
Accumulated other comprehensive income (loss) $ 36.2 $ (269.8) $ 408.1
Other Capital Stock Changes: PACCAR had 409,000 treasury shares at December 31, 2009, and 2008, and 1,278,900
treasury shares at December 31, 2007.
Stock Dividend: A 50% common stock dividend was paid in October 2007. This resulted in the issuance of
122,775,211 additional shares and 613 fractional shares paid in cash.
59
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2009, 2008 and 2007 (currencies in millions)