Dell 2010 Annual Report Download - page 101

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Table of Contents
DELL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
allowances have been placed on the acquired net operating loss and credit carryforwards. The carryforwards for significant taxing
jurisdictions expire beginning in Fiscal 2014.
Deferred taxes have not been recorded on the excess book basis in the shares of certain foreign subsidiaries because these basis
differences are not expected to reverse in the foreseeable future and are expected to be permanent in duration. These basis differences in
the amount of approximately $12.3 billion arose primarily from the undistributed book earnings of substantially all of the subsidiaries in
which Dell intends to reinvest indefinitely. The basis differences could reverse through a sale of the subsidiaries or the receipt of
dividends from the subsidiaries, as well as various other events. Net of available foreign tax credits, residual income tax of approximately
$3.9 billion would be due upon reversal of this excess book basis as of January 28, 2011.
A portion of Dell's operations is subject to a reduced tax rate or is free of tax under various tax holidays that expire in whole or in part
during Fiscal 2012 through Fiscal 2019. Many of these tax holidays and reduced tax rates may be extended when certain conditions are
met or may be terminated early if certain conditions are not met. The income tax benefits attributable to the tax status of these
subsidiaries were estimated to be approximately $321 million ($.17 per share) in Fiscal 2011, $149 million ($.08 per share) in Fiscal
2010, and $338 million ($.17 per share) in Fiscal 2009.
The effective tax rate differed from the statutory U.S. federal income tax rate as follows:
Fiscal Year Ended
January 28, January 29, January 30,
2011 2010 2009
U.S. federal statutory rate 35.0% 35.0% 35.0%
Foreign income taxed at different rates (14.7) (7.6) (9.7)
State income taxes, net of federal tax benefit 1.4 1.4 (0.2)
Regulatory settlement 1.0 - -
Other (1.4) 0.4 0.3
Total 21.3% 29.2% 25.4%
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