E-Z-GO 2010 Annual Report Download - page 90
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78
During 2010, 2009 and 2008, we recognized net tax-related interest expense totaling approximately $19 million, $12 million and $31
million, respectively, in the Consolidated Statements of Operations. At January 1, 2011 and January 2, 2010, we had a total of $122
million and $114 million, respectively, of net accrued interest expense included in our Consolidated Balance Sheets.
The tax effects of temporary differences that give rise to significant portions of our net deferred tax assets and liabilities are as
follows:
(In millions)
January 1,
2011
January 2,
2010
Deferred tax assets
Obligation for pension and postretirement benefits
$ 692
$ 765
Accrued expenses*
255
267
Deferred compensation
203
197
Allowance for credit losses
141
146
Loss carryforwards
66
60
Deferred income
59
33
Valuation allowance on finance receivables held for sale
29
71
Foreign currency translation adjustment
—
41
Other, net
177
192
Total deferred tax assets
1,622
1,772
Valuation allowance for deferred tax assets
(200)
(227)
$ 1,422
$ 1,545
Deferred tax liabilities
Leasing transactions
$ (387)
$ (468)
Amortization of goodwill and other intangibles
(135)
(146)
Property, plant and equipment, principally depreciation
(132)
(115)
Inventory
(15)
(5)
Total deferred tax liabilities
(669)
(734)
Net deferred tax asset
$ 753
$ 811
* Accrued expenses includes warranty and product maintenance reserves, self-insured liabilities, interest and restructuring charges.
We believe that our earnings during the periods when the temporary differences become deductible will be sufficient to realize the
related future income tax benefits. For those jurisdictions where the expiration date of tax carryforwards or the projected operation
results indicate that realization is not likely, a valuation allowance is provided.
The following table presents the breakdown between current and long-term net deferred tax assets:
(In millions)
January 1,
2011
January 2,
2010
Current
$ 290
$ 315
Non-current
571
632
861
947
Finance group’s net deferred tax liability
(108)
(136)
Net deferred tax asset
$ 753
$ 811
We have net operating loss and credit carryforwards at the end of each year as follows:
(In millions)
January 1,
2011
January 2,
2010
Non-U.S. net operating loss carryforwards with no expiration
$ 126
$ 157
Non-U.S. net operating loss carryforwards expiring through 2030
30
18
State unitary net operating loss carryforwards, net of tax benefits, expiring through 2026
4
—
U.S. foreign tax credits expiring in 2021
16
—
State credit carryforwards beginning to expire in 2018
12
11
The undistributed earnings of our non-U.S. subsidiaries approximated $329 million at January 1, 2011. We consider the undistributed
earnings to be indefinitely reinvested; therefore, a deferred tax liability has not been provided on these earnings. Because of the effect
of U.S. foreign tax credits, it is not practicable to estimate the amount of tax that might be payable on these earnings in the event they
no longer are indefinitely reinvested.