DuPont 2012 Annual Report Download - page 66

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
(Dollars in millions, except per share)
Under the tax laws of various jurisdictions in which the company operates, deductions or credits that cannot be fully utilized for tax purposes during the
current year may be carried forward or back, subject to statutory limitations, to reduce taxable income or taxes payable in future or prior years. At
December 31, 2012, the tax effect of such carryforwards/backs, net of valuation allowance approximated $1,298. Of this amount, $1,074 has no expiration
date, $42 expires after 2012 but before the end of 2017 and $182 expires after 2017.
At December 31, 2012, unremitted earnings of subsidiaries outside the U.S. totaling $13,179 were deemed to be indefinitely reinvested. No deferred tax
liability has been recognized with regard to the remittance of such earnings. It is not practical to estimate the income tax liability that might be incurred if such
earnings were remitted to the U.S.
Each year the company files hundreds of tax returns in the various national, state and local income taxing jurisdictions in which it operates. These tax returns
are subject to examination and possible challenge by the taxing authorities. Positions challenged by the taxing authorities may be settled or appealed by the
company. As a result, there is an uncertainty in income taxes recognized in the company's financial statements in accordance with accounting for income taxes
and accounting for uncertainty in income taxes. It is reasonably possible that changes to the company's global unrecognized tax benefits could be significant,
however, due to the uncertainty regarding the timing of completion of audits and possible outcomes, a current estimate of the range of increases or decreases
that may occur within the next twelve months cannot be made.
The company and/or its subsidiaries files income tax returns in the U.S. federal jurisdiction, and various states and non-U.S. jurisdictions. With few
exceptions, the company is no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations by tax authorities for years before 1999. A
reconciliation of the beginning and ending amounts of unrecognized tax benefits is as follows:
  
Total unrecognized tax benefits as of January 1 $800 $693 $ 739
Gross amounts of decreases in unrecognized tax benefits as a result of tax positions
taken during the prior period (94)(82)(155)
Gross amounts of increases in unrecognized tax benefits as a result of tax positions
taken during the prior period 73 170 169
Gross amounts of increases in unrecognized tax benefits as a result of tax positions
taken during the current period 78 79 51
Amount of decreases in the unrecognized tax benefits relating to settlements with taxing
authorities (29) (6) (90)
Reduction to unrecognized tax benefits as a result of a lapse of the applicable statute of
limitations (10)(32)(24)
Exchange gain (loss) (13)(22)3
Total unrecognized tax benefits as of December 31 $ 805 $ 800 $693
Total unrecognized tax benefits that, if recognized, would impact the effective tax rate $693 $ 683 $ 545
Total amount of interest and penalties recognized in the Consolidated Income Statements $4$ 7 $ (70)
Total amount of interest and penalties recognized in the Consolidated Balance Sheets $116 $113 $99
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