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GE 2009 ANNUAL REPORT 93
    
A reconciliation of the U.S. federal statutory income tax rate to the actual income tax rate is provided below.
RECONCILIATION OF U.S. FEDERAL STATUTORY INCOME TAX RATE TO ACTUAL INCOME TAX RATE
Consolidated GE GECS
2009 2008 2007 2009 2008 2007 2009 2008 2007
U.S. federal statutory income tax rate 35.0 % 35.0 % 35.0 % 35.0 % 35.0 % 35.0 % 35.0 % 35.0 % 35.0 %
Increase (reduction) in rate resulting from
Inclusion of after-tax earnings of GECS in
before-tax earnings of GE — — — (3.9) (12.4) (16.7) — — —
Tax on global activities including exports (a) (b) (38.9) (26.0) (15.2) (10.7) (5.2) (4.9) 113.8 (71.3) (20.7)
U.S. business credits (4.4) (1.4) (1.0) (0.9) (0.3) (0.3) 14.4 (3.7) (1.5)
SES transaction — — (2.0) — — — — — (3.9)
All other — net (2.2) (2.3) (1.7) (0.1) (1.5) (2.3) 10.2 (2.2) 0.8
(45.5) (29.7) (19.9) (15.6) (19.4) (24.2) 138.4 (77.2) (25.3)
Actual income tax rate (10.5)% 5.3 % 15.1 % 19.4 % 15.6 % 10.8 % 173.4 % (42.2)% 9.7 %
(a) 2009 included (6.8)% and 31.7% from indefinite reinvestment of prior-year earnings for consolidated and GECS, respectively.
(b) 2008 included (1.8)% and (6.2)% from indefinite reinvestment of prior-year earnings for consolidated and GECS, respectively.
DEFERRED INCOME TAXES
Aggregate deferred income tax amounts are summarized below.
December 31 (In millions) 2009 2008
ASSETS
GE $(14,945) $ (13,493)
GECS (11,107) (11,180)
(26,052) (24,673)
LIABILITIES
GE 10,325 9,544
GECS 17,900 19,713
28,225 29,257
Net deferred income tax liability $ 2,173 $ 4,584
Principal components of our net liability (asset) representing
deferred income tax balances are as follows:
December 31 (In millions) 2009 2008
GE
Intangible assets $ 2,782 $ 2,664
Contract costs and estimated earnings 2,540 2,319
Depreciation 1,223 1,205
Investment in subsidiaries 1,959 1,909
Provision for expenses (a) (7,843) (6,578)
Retiree insurance plans (4,110) (4,355)
Non-U.S. loss carryforwards (b) (1,056) (800)
Other — net (115) (313)
(4,620) (3,949)
GECS
Financing leases 6,210 7,317
Operating leases 5,557 4,882
Investment in global subsidiaries 493 2,127
Intangible assets 1,585 1,360
Allowance for losses (3,094) (2,459)
Cash flow hedges (818) (2,260)
Net unrealized losses on securities (193) (1,634)
Non-U.S. loss carryforwards (b) (1,299) (979)
Other — net (1,648) 179
6,793 8,533
Net deferred income tax liability $ 2,173 $ 4,584
(a) Represented the tax effects of temporary differences related to expense accruals
for a wide variety of items, such as employee compensation and benefits, pension
plan liabilities, interest on tax liabilities, product warranties and other sundry items
that are not currently deductible.
(b) Net of valuation allowances of $835 million and $635 million for GE and
$344 million and $260 million for GECS, for 2009 and 2008, respectively. Of the
net deferred tax asset as of December 31, 2009, of $2,355 million, $42 million
relates to net operating loss carryforwards that expire in various years ending
from December 31, 2010, through December 31, 2012; $278 million relates to
net operating losses that expire in various years ending from December 31, 2013,
through December 31, 2024; and $2,035 million relates to net operating loss
carryforwards that may be carried forward indefinitely.