Coca Cola 2010 Annual Report Download - page 140

As of December 31, 2010, undistributed earnings of the Company’s foreign subsidiaries amounted to $20.8 billion.
Those earnings are considered to be indefinitely reinvested and, accordingly, no U.S. federal and state income taxes
have been provided thereon. Upon distribution of those earnings in the form of dividends or otherwise, the Company
would be subject to both U.S. income taxes (subject to an adjustment for foreign tax credits) and withholding taxes
payable to the various foreign countries. Determination of the amount of unrecognized deferred U.S. income tax
liability is not practical because of the complexities associated with its hypothetical calculation; however, unrecognized
foreign tax credits would be available to reduce a portion of the U.S. tax liability.
The tax effects of temporary differences and carryforwards that give rise to deferred tax assets and liabilities consist of
the following (in millions):
December 31, 2010 2009
Deferred tax assets:
Property, plant and equipment $49$28
Trademarks and other intangible assets 271 72
Equity method investments (including translation adjustment) 304 396
Other liabilities 1,285 404
Benefit plans 2,019 1,106
Net operating/capital loss carryforwards 911 629
Other 6831241
Gross deferred tax assets 5,522 2,876
Valuation allowances (950) (681)
Total deferred tax assets2,3 $ 4,572 $ 2,195
Deferred tax liabilities:
Property, plant and equipment $ (2,227) $ (988)
Trademarks and other intangible assets (4,284) (1,776)
Equity method investments (including translation adjustment) (509) (462)
Other liabilities (107) (66)
Benefit plans (383) (55)
Other (765)4(248)
Total deferred tax liabilities5$ (8,275) $ (3,595)
Net deferred tax liabilities6$ (3,703) $ (1,400)
1Includes $183 million of tax credit carryforwards acquired in conjunction with our acquisition of CCE’s North American business.
2Noncurrent deferred tax assets of $98 million and $96 million were included in the consolidated balance sheets line item other
assets as of December 31, 2010 and 2009, respectively.
3Current deferred tax assets of $478 million and $118 million were included in the consolidated balance sheets line item prepaid
expenses and other assets as of December 31, 2010 and 2009, respectively.
4The increase is primarily related to deferred tax expense on certain current year undistributed foreign earnings that are not
considered to be indefinitely reinvested.
5Current deferred tax liabilities of $18 million and $34 million were included in the consolidated balance sheets line item accounts
payable and accrued expenses as of December 31, 2010 and 2009, respectively.
6The increase in the net deferred tax liability position in 2010 compared to 2009 was primarily due to the noncurrent deferred tax
liabilities related to identifiable intangible assets recognized in connection with our acquisition of CCE’s North American business,
partially offset by the deferred tax assets acquired in the same transaction. Refer to Note 2.
As of December 31, 2010 and 2009, we had $445 million and $593 million, respectively, of net deferred tax liabilities
located in countries outside the United States.
As of December 31, 2010, we had $6,685 million of loss carryforwards. Approximately $3,580 million of the loss
carryforwards were acquired in connection with our acquisition of CCE’s North American business and are available to
reduce future taxable income in various jurisdictions. Loss carryforwards of $408 million must be utilized within the
next five years and the remainder can be utilized over a period greater than five years. Approximately $183 million of
the tax credit carryforwards are available to reduce our federal income tax liability. Although the tax credit
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