Ford 2011 Annual Report Download - page 160

Notes to the Financial Statements
158 Ford Motor Company | 2011 Annual Report
NOTE 22. INCOME TAXES
Income Taxes
In accordance with GAAP, we have elected to recognize accrued interest related to unrecognized tax benefits and tax-
related penalties in the Provision for/(Benefit from) income taxes on our consolidated statement of operations.
Valuation of Deferred Tax Assets and Liabilities
Deferred tax assets and liabilities are recognized based on the future tax consequences attributable to temporary
differences that exist between the financial statement carrying value of assets and liabilities and their respective tax
bases, and operating loss and tax credit carryforwards on a taxing jurisdiction basis. We measure deferred tax assets
and liabilities using enacted tax rates that will apply in the years in which we expect the temporary differences to be
recovered or paid.
Our accounting for deferred tax consequences represents our best estimate of the likely future tax consequences of
events that have been recognized in our financial statements or tax returns and their future probability. In assessing the
need for a valuation allowance, we consider both positive and negative evidence related to the likelihood of realization of
the deferred tax assets. If, based on the weight of available evidence, it is more likely than not that the deferred tax
assets will not be realized, we record a valuation allowance.
Components of Income Taxes
Components of income taxes excluding discontinued operations, cumulative effects of changes in accounting
principles, other comprehensive income, and equity in net results of affiliated companies accounted for after-tax, are as
follows:
Income/(Loss) before income taxes, excluding equity in net results of affiliated
companies accounted for after-tax (in millions)
U.S.
Non-U.S.
Total
Provision for/(Benefit from) income taxes (in millions)
Current
Federal
Non-U.S.
State and local
Total current
Deferred
Federal
Non-U.S.
State and local
Total deferred
Total
Reconciliation of effective tax rate
U.S. statutory rate
Non-U.S. tax rates under U.S. rates
State and local income taxes
General business credits
Dispositions and restructurings
U.S. tax on non-U.S. earnings
Prior year settlements and claims
Tax-related interest
Tax-exempt income
Other
Valuation allowances
Effective rate
2011
$ 6,043
2,138
$ 8,181
$(4)
298
(24)
270
(9,785)
(1,590)
(436)
(11,811)
$ (11,541)
35.0 %
(1.5)
1.1
(1.9)
6.8
(0.8)
(0.2)
(0.9)
(3.9)
(2.5)
(172.3)
(141.1)%
2010
$4,057
2,554
$6,611
$(69)
289
(5)
215
—
292
85
377
$592
35.0%
(0.1)
1.5
(1.8)
(9.5)
0.1
(10.0)
(0.7)
(4.7)
0.2
(1.0)
9.0%
2009
$ 1,724
680
$ 2,404
$ (274)
269
7
2
(100)
44
(59)
(115)
$ (113)
35.0 %
(0.6)
(1.9)
(6.2)
(4.3)
0.6
10.4
(1.5)
(10.4)
0.2
(26.0)
(4.7)%