Ford 2013 Annual Report Download - page 133

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Ford Motor Company | 2013 Annual Report 131
FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
NOTE 22. INCOME TAXES (Continued)
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, were as
follows:
2013 2012 2011
Income before income taxes, excluding equity in net results of affiliated companies
accounted for after-tax (in millions)
U.S. $ 6,523 $ 6,639 $ 6,043
Non-U.S. (591) 493 2,138
Total $ 5,932 $ 7,132 $ 8,181
Provision for/(Benefit from) income taxes (in millions)
Current
Federal $ (19) $ 4 $ (4)
Non-U.S. 302 270 298
State and local (40) 3 (24)
Total current 243 277 270
Deferred
Federal (200) 2,076 (9,785)
Non-U.S. 321 (126) (1,590)
State and local (511) (171) (436)
Total deferred (390) 1,779 (11,811)
Total $ (147) $ 2,056 $ (11,541)
Reconciliation of effective tax rate
U.S. statutory rate 35.0 % 35.0% 35.0 %
Non-U.S. tax rates under U.S. rates (1.5) (1.6) (1.5)
State and local income taxes 1.0 0.2 1.1
General business credits (5.9) 0.3 (1.9)
Dispositions and restructurings (26.0) (1.7) 6.8
U.S. tax on non-U.S. earnings (2.0) (1.0) (0.8)
Prior year settlements and claims (0.2) (1.8) (0.2)
Tax-related interest (0.2) —(0.9)
Tax-exempt income (5.9) (3.9) (3.9)
Enacted change in tax rates 3.0 1.7 (0.1)
Valuation allowances (0.8) 1.6 (172.3)
Other 1.0 —(2.4)
Effective rate (2.5)% 28.8% (141.1)%
Included in “Dispositions and restructurings” is the recognition of deferred tax assets for investments in our European
operations. Under GAAP, we do not recognize deferred tax assets related to stock investment in affiliates until it becomes
apparent they will be realized in the foreseeable future. In the fourth quarter of 2013, we restructured certain of our
European affiliates. We have made tax elections to include the operating results of these affiliates in our U.S. tax returns.
As a result, we anticipate the realization of tax benefits related to stock investments in these European affiliates and have
recorded deferred tax assets of $1.5 billion.
The American Taxpayer Relief Act of 2012 reinstated the U.S. federal research and development tax credit and U.S.
tax deferral of certain foreign source income, retroactive to January 1, 2012. As a result, the tax provision for the period
ended December 31, 2013 reflects a $233 million tax benefit related to the retroactive provisions of the Act.
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