Dell 2011 Annual Report Download - page 96
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Table of Contents DELL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
benefits attributable to the tax status of these subsidiaries were estimated to be approximately $474 million ($.26 per share) in Fiscal 2012, $321 million ($.17
per share) in Fiscal 2011, and $149 million ($.08 per share) in Fiscal 2010.
The effective tax rate differed from the statutory U.S. federal income tax rate as follows:
Fiscal Year Ended
February 3,
2012 January 28,
2011 January 29,
2010
U.S. federal statutory rate 35.0 % 35.0 % 35.0 %
Foreign income taxed at different rates (19.2) (14.7) (7.6)
State income taxes, net of federal tax benefit 0.8 1.4 1.4
Regulatory settlement — 1.0 —
Other 1.0 (1.4) 0.4
Total 17.6 % 21.3 % 29.2 %
A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
Total
(in millions)
Balance at January 30, 2009 $ 1,538
Increases related to tax positions of the current year 298
Increases related to tax positions of prior years 32
Reductions for tax positions of prior years (69)
Lapse of statute of limitations (3)
Audit settlements (3)
Balance at January 29, 2010 1,793
Increases related to tax positions of the current year 262
Increases related to tax positions of prior years 22
Reductions for tax positions of prior years (41)
Lapse of statute of limitations (32)
Audit settlements (21)
Balance at January 28, 2011 1,983
Increases related to tax positions of the current year 260
Increases related to tax positions of prior years 30
Reductions for tax positions of prior years (43)
Lapse of statute of limitations (32)
Audit settlements (4)
Balance at February 3, 2012 $ 2,194
Dell recorded net unrecognized tax benefits of $2.6 billion and $2.3 billion, which are included in Other non-current liabilities in its Consolidated Statements
of Financial Position, as of February 3, 2012, and January 28, 2011, respectively. The unrecognized tax benefits in the table above do not include accrued
interest and penalties. Dell had accrued interest and penalties of $664 million, $552 million, and $507 million as of February 3, 2012, January 28, 2011, and
January 29, 2010, respectively. These interest and penalties are offset by tax benefits from transfer pricing, interest deductions, and state income tax, which
are also not included in the table above. These benefits were $295 million, $242 million, and $209 million as of February 3, 2012, January 28, 2011, and
January 29, 2010, respectively. Net unrecognized tax benefits, if recognized, would favorably affect Dell's effective tax rate.
Interest and penalties related to income tax liabilities are included in income tax expense. Dell recorded $112 million , $45 million , and $107 million related
to interest and penalties, which were included in income tax expense for Fiscal 2012, Fiscal 2011, and Fiscal 2010, respectively.
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