PACCAR 2011 Annual Report Download - page 71

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A reconciliation of the statutory U.S. federal tax rate to the effective income tax rate is as follows:
2011 2010 2009
Statutory rate 35.0% 35.0% 35.0%
Effect of:
Qualified dividends to defined contribution plan (.6) (.7) (2.3)
Research and development credit (.3) (.5) (2.1)
Tax on foreign earnings (3.3) (3.9) .8
Tax contingencies (.6) (.8) 2.2
Mexican tax law change 6.5
Other, net .6 1.6 (4.0)
30.8% 30.7% 36.1%
U.S. income taxes are not provided on the undistributed earnings of the Company’s foreign subsidiaries that are
considered to be indefinitely reinvested. At December 31, 2011, the amount of undistributed earnings which are
considered to be indefinitely reinvested is $3,374.9. It is not practicable to estimate the amount of unrecognized
U.S. taxes on these earnings.
Included in domestic taxable income for 2011, 2010 and 2009 are $311.0, $169.0 and $31.4 of foreign earnings,
respectively, which are not indefinitely reinvested, for which domestic taxes of $28.5, $16.5 and $3.7, respectively,
were provided as the difference between the domestic and foreign rate on those earnings.
At December 31, 2011, the Company had net operating loss carryforwards of $280.5, of which $195.1 were in
foreign subsidiaries and $85.4 were in the U.S. The related deferred tax asset was $58.6. The carryforward periods
range from five years to indefinite, subject to certain limitations under applicable laws. At December 31, 2011, the
Company has U.S. tax credit carryforwards of $15.8, most of which expire in 2020. The future tax benefits of net
operating loss and credit carryforwards are evaluated on a regular basis, including a review of historical and
projected operating results.
The tax effects of temporary differences representing deferred tax assets and liabilities are as follows:
At December 31, 2011 2010
Assets:
Accrued expenses $ 138.6 $ 112.8
Postretirement benefit plans 94.1 15.8
Net operating loss carryforwards 58.6 68.2
Allowance for losses on receivables 50.1 47.3
Tax credit carryforwards 15.8 57.5
Other 89.1 80.9
446.3 382.5
Valuation allowance (16.4) (12.4)
429.9 370.1
Liabilities:
Financial Services leasing depreciation (721.8) (532.6)
Depreciation and amortization (161.3) (162.1)
Other (12.1) (4.7)
(895.2) (699.4)
Net deferred tax liability $ (465.3) $ (329.3)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2011, 2010 and 2009 (currencies in millions)