Lockheed Martin 2011 Annual Report Download - page 75

The primary components of our federal and foreign deferred income tax assets and liabilities at December 31 were as
follows:
(In millions) 2011 2010
Deferred tax assets related to:
Accrued compensation and benefits $ 843 $ 877
Pensions 4,578 3,642
Other postretirement benefit obligations 487 459
Contract accounting methods 806 531
Sale of discontinued operations 69 179
Foreign company operating losses and credits 31 31
Other 305 202
Valuation allowance (a) (14) (17)
Deferred tax assets, net 7,105 5,904
Deferred tax liabilities related to:
Goodwill and purchased intangibles 369 336
Property, plant and equipment 638 558
Exchanged debt securities and other (b) 379 391
Deferred tax liabilities 1,386 1,285
Net deferred tax assets (c) $5,719 $4,619
(a) A valuation allowance has been provided against certain foreign company deferred tax assets arising from carryforwards of unused tax
benefits.
(b) Includes deferred tax liabilities associated with the exchange of debt securities in 2010 (see Note 9) and 2006.
(c) Includes net foreign current deferred tax liabilities, which are included on the Balance Sheets in other current liabilities.
We had recorded liabilities for unrecognized tax benefits related to permanent and temporary tax adjustments, exclusive
of interest, that totaled $160 million at December 31, 2010, primarily recorded in other current liabilities on the Balance
Sheet. In 2011, we eliminated most of these liabilities due to the completion of the JCT’s review of the IRS Appeals
Division’s resolution of certain adjustments related to our tax years 2003-2008 as mentioned above. The remaining balance
of our unrecognized tax benefits as of December 31, 2011 is not material.
We and our subsidiaries file income tax returns in the U.S. federal jurisdiction and various foreign jurisdictions. With
few exceptions, the statute of limitations is no longer open for U.S. federal or non-U.S. income tax examinations for the years
before 2008, other than with respect to refunds.
U.S. income taxes and foreign withholding taxes have not been provided on earnings of $193 million, $108 million, and
$123 million that have not been distributed by our non-U.S. companies as of December 31, 2011, 2010, and 2009. Our
intention is to permanently reinvest these earnings, thereby indefinitely postponing their remittance to the U.S. If these
earnings were remitted, we estimate that the additional income taxes after foreign tax credits would have been approximately
$41 million in 2011, $17 million in 2010, and $29 million in 2009.
Our federal and foreign income tax payments, net of refunds received, were $722 million in 2011, $806 million in 2010,
and $986 million in 2009. A $250 million refund received in 2011 from the IRS related to estimated taxes paid for 2010 is
reflected in 2011 payments. A payment of $260 million associated with the divestiture of EIG, a $325 million refund
received in 2010 from the IRS related to estimated taxes paid for 2009, and an $85 million advance payment related to
matters pending with IRS Appeals are reflected in 2010 payments.
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