E-Z-GO 2011 Annual Report Download - page 91

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During 2011, 2010 and 2009, we recognized net tax-related interest expense totaling approximately $10 million, $19 million and
$12 million, respectively, in the Consolidated Statements of Operations. At December 31, 2011 and January 1, 2011, we had a
total of $132 million and $122 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)
December 31,
2011
January 1,
2011
Deferred tax assets
Obligation for pension and postretirement benefits
$ 635
$ 692
Deferred compensation
196
203
Accrued expenses*
193
255
Valuation allowance on finance receivables held for sale
130
29
Loss carryforwards
74
66
Allowance for credit losses
68
141
Deferred income
52
59
Inventory
38
—
Other, net
172
177
Total deferred tax assets
1,558
1,622
Valuation allowance for deferred tax assets
(189)
(200)
$ 1,369
$ 1,422
Deferred tax liabilities
Leasing transactions
$ (285)
$ (387)
Property, plant and equipment, principally depreciation
(145)
(132)
Amortization of goodwill and other intangibles
(111)
(135)
Inventory
—
(15)
Total deferred tax liabilities
(541)
(669)
Net deferred tax asset
$ 828
$ 753
* Accrued expenses includes warranty and product maintenance reserves, self-insured liabilities, interest and restructuring reserves.
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 operating
results indicate that realization is not more than likely, a valuation allowance is provided.
The following table presents the breakdown between current and long-term net deferred tax assets:
(In millions)
December 31,
2011
January 1,
2011
Current
$ 288
$ 290
Non-current
532
571
820
861
Finance group’s net deferred tax asset (liability)
8
(108)
Net deferred tax asset
$ 828
$ 753
Our net operating loss and credit carryforwards at December 31, 2011 are as follows:
(In millions)
Non-U.S. net operating loss with no expiration
$ 98
Non-U.S. net operating loss expiring through 2031
45
State net operating loss and tax credits, net of tax benefits, expiring through 2027
36
U.S. federal tax credits beginning to expire in 2021
30
The undistributed earnings of our non-U.S. subsidiaries approximated $470 million at December 31, 2011. We consider the
undistributed earnings to be indefinitely reinvested; therefore, we have not provided a deferred tax liability for any residual U.S.
tax that may be due upon repatriation of 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.
80
80 Textron Inc. Annual Report • 2011