Dow Chemical 2011 Annual Report Download - page 235

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The provision for income taxes attributable to discontinued operations (domestic) was $65 million for 2009 (see Note E).
The Company did not report discontinued operations in 2011 and 2010.
Deferred Tax Balances at December 31
In millions
Property
Tax loss and credit carryforwards
Postretirement benefit obligations
Other accruals and reserves
Intangibles
Inventory
Long-term debt
Investments
Other – net
Subtotal
Valuation allowances
Total
2011
Deferred Tax
Assets (1)
$ 102
2,294
3,916
1,954
152
229
—
186
1,185
$ 10,018
(1,152)
$ 8,866
Deferred Tax
Liabilities
$ 2,265
—
1,184
604
1,076
289
726
183
729
$ 7,056
—
$ 7,056
2010
Deferred Tax
Assets (1)
$ 629
1,957
3,282
2,101
182
149
3
174
986
$ 9,463
(682)
$ 8,781
Deferred Tax
Liabilities
$ 3,084
—
1,099
545
1,615
277
393
136
342
$ 7,491
—
$ 7,491
(1) Included in current deferred tax assets are prepaid tax assets totaling $210 million in 2011 and $100 million in 2010.
Uncertain Tax Positions
At December 31, 2011, the total amount of unrecognized tax benefits was $339 million ($319 million at December 31, 2010),
of which $319 million would impact the effective tax rate, if recognized ($297 million at December 31, 2010).
Interest and penalties associated with uncertain tax positions are recognized as components of the “Provision (Credit) for
income taxes,” and totaled $21 million in 2011, $6 million in 2010 and $10 million in 2009. The Company’s accrual for interest
and penalties was $66 million at December 31, 2011 and $58 million at December 31, 2010.
Total Gross Unrecognized Tax Benefits
In millions
Balance at January 1
Increases related to positions taken on items from prior years
Decreases related to positions taken on items from prior years
Increases related to positions taken in the current year
Settlement of uncertain tax positions with tax authorities
Decreases due to expiration of statutes of limitations
Balance at December 31
2011
$ 319
5
(11)
70
(21)
(23)
$ 339
2010
$ 650
8
(33)
24
(300)
(30)
$ 319
2009
$ 736
57
(25)
71
(172)
(17)
$ 650
The Company is currently under examination in a number of tax jurisdictions. It is reasonably possible that these
examinations may be resolved within twelve months. As a result, it is reasonably possible that the total gross unrecognized tax
benefits of the Company at December 31, 2011 may be reduced in the next twelve months by approximately $45 million to
$90 million as a result of these resolved examinations. The impact on the Company’s results of operations is not expected to be
material.