DELPHI 2011 Annual Report Download - page 130

Table of Contents
The Company's tax rate is affected by the tax rates in the jurisdictions in which the Company operates, the relative amount of income earned by
jurisdiction, jurisdictions with a statutory tax rate less than the U.S. rate of 35% and the relative amount of losses or income for which no tax benefit or
expense was recognized due to a valuation allowance. Included in non-U.S. income taxed at other rates for 2011, are tax incentives of $64 million obtained in
various non-U.S. countries, primarily Hi-Tech Enterprise status in China and the Maquiladora regime in Mexico, and a $65 million tax benefit for income
earned in jurisdictions where a valuation allowance has been recorded, primarily in France.
We recognized a $52 million, primarily Germany, and $21 million tax benefit in 2011 and 2010, respectively, related to changes of judgment in
valuation allowance for the realization of deferred tax assets. During 2011, the Company recorded a withholding tax of $10 million related to the funding of
the redemption of all the outstanding Class A and Class C membership interests and $27 million related to changes in our assertion with respect to our intent
to repatriate foreign earnings in certain countries.
During the period from January 1 through October 6, 2009, the Company recognized tax benefits associated with gains from Other Comprehensive
Income of $358 million (see discussion in Note 13. Pension Benefits).
Delphi currently benefits from tax holidays in various non-U.S. jurisdictions with expiration dates from 2012 through 2023. The income tax benefits
attributable to these tax holidays are approximately $20 million ($0.05 per share) in 2011, $5 million ($0.01 per share) in 2010, $2 million ($0.00 per share)
for January 1 to October 6, 2009, and $1 million ($0.00 per share) for August 19 to December 31, 2009.
Deferred income taxes
Delphi accounts for income taxes and the related accounts under the liability method. Deferred income tax assets and liabilities reflect the impact of
temporary differences between amounts of assets and liabilities for financial reporting purposes and the bases of such assets and liabilities as measured by tax
laws. Significant components of the deferred tax assets and liabilities are as follows:
December 31
2011 2010
(in millions)
Deferred tax assets:
Pension $ 136 $ 136
Employee Benefits 49 26
Net operating loss carryforwards 483 561
Warranty and other liabilities 188 148
Other 91 106
Total gross deferred tax assets 947 977
Less: valuation allowances (472) (551)
Total deferred tax assets (1) $ 475 $ 426
Deferred tax liabilities:
Fixed Assets $ 6 $ 18
Tax on unremitted profits of certain foreign subsidiaries 39 16
Intangibles 160 210
Foreign operating loss recapture 45 45
Total gross deferred tax liabilities 250 289
Net deferred tax assets $ 225 $ 137
(
1
)
Reflects gross amount before jurisdictional netting of deferred tax assets and liabilities.
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