Boeing 2010 Annual Report Download - page 82
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Net income tax payments/(refunds) were $360, ($198) and $599 in 2010, 2009 and 2008, respectively.
Our effective income tax rate was 26.5%, 22.9% and 33.6% for the years ended December 31, 2010,
2009 and 2008, respectively. Our effective tax rate was higher in 2010, than 2009, primarily because
pre-tax book income in 2010 was higher than in 2009 and because of an income tax charge of $150
recorded during the first quarter of 2010 as a result of the Patient Protection and Affordable Care Act,
as modified by the Health Care and Education Reconciliation Act of 2010. This was partially offset by a
tax benefit of $371 recorded during the fourth quarter of 2010 as a result of settling the 1998-2003
federal audit. Our effective tax rate was lower in 2009, than 2008, primarily because tax credits such as
research and development credits represented a higher proportion of earnings before taxes due to the
year-over-year reduction in earnings. The following is a reconciliation of the U.S. federal statutory tax
rate of 35% to our effective income tax rate:
Years ended December 31, 2010 2009 2008
U.S. federal statutory tax 35.0% 35.0% 35.0%
Research and development credits (3.5) (10.1) (4.3)
Tax on international activities (1.2) (2.4) (0.7)
Tax deductible dividends (0.9) (2.2) (0.8)
State income tax provision, net of effect on U.S. federal tax 1.8 2.2 1.7
Medicare Part D law change 3.3
Federal audit settlement (8.2)
Other provision adjustments 0.2 0.4 2.7
Effective income tax rate 26.5% 22.9% 33.6%
Significant components of our deferred tax assets, net of deferred tax liabilities, at December 31 were
as follows:
2010 2009
Retiree health care accruals $ 3,061 $ 2,930
Inventory and long-term contract methods of income recognition, fixed assets and
other (net of valuation allowance of $27 and $23) (2,644) (994)
Partnerships and joint ventures (263) (528)
Other employee benefits accruals 1,272 1,411
In-process research and development related to acquisitions 65 79
Net operating loss, credit and capital loss carryovers (net of valuation allowance of
$78 and $36) 300 477
Pension asset 3,443 2,345
Customer and commercial financing (1,645) (1,703)
Unremitted earnings of non-U.S. subsidiaries (60) (55)
Other net unrealized losses 13 66
Net deferred tax assets(1) $ 3,542 $ 4,028
(1) Of the deferred tax asset for net operating loss and credit carryovers, $158 expires in years ending
from December 31, 2011 through December 31, 2030 and $142 may be carried over indefinitely.
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