Income Taxes (Tables)

12 Months Ended

Dec. 31, 2011

Components of Income Before Income Taxes and Current and Deferred Income Tax Expense (Benefit)

Domestic and foreign components of income before income taxes and the current and deferred income tax expense (benefit) attributable to such income are summarized as follows:

	Year ended December 31, 2011
	Japanese		Foreign		Total
	(Millions of yen)
Income before income taxes	¥	287,592	¥	86,932	¥	374,524
Income taxes:
Current	¥	67,671	¥	23,615	¥	91,286
Deferred		21,047		8,082		29,129
	¥	88,718	¥	31,697	¥	120,415

	Year ended December 31, 2010
	Japanese		Foreign			Total
	(Millions of yen)
Income before income taxes	¥	302,965	¥	89,898		¥	392,863
Income taxes:
Current	¥	78,359	¥	32,420		¥	110,779
Deferred		35,496		(6,115	)		29,381
	¥	113,855	¥	26,305		¥	140,160

	Year ended December 31, 2009
	Japanese		Foreign		Total
	(Millions of yen)
Income before income taxes	¥	130,857	¥	88,498	¥	219,355
Income taxes:
Current	¥	45,079	¥	18,331	¥	63,410
Deferred		15,415		5,297		20,712
	¥	60,494	¥	23,628	¥	84,122

Reconciliation of Japanese Statutory Income Tax Rate and Effective Inome Tax Rate

A reconciliation of the Japanese statutory income tax rate and the effective income tax rate as a percentage of income before income taxes is as follows:

	Years ended December 31
	2011			2010			2009
Japanese statutory income tax rate		40.0	%		40.0	%		40.0	%
Increase (reduction) in income taxes resulting from:
Expenses not deductible for tax purposes		0.6			0.8			0.9
Income of foreign subsidiaries taxed at lower than Japanese statutory tax rate		(4.3	)		(3.5	)		(5.4	)
Tax credit for research and development expenses		(3.9	)		(5.1	)		(2.8	)
Change in valuation allowance		(0.5	)		2.8			5.4
Effect of enacted changes in tax laws and rates on Japanese tax		1.8			—			—
Other		(1.5	)		0.7			0.2
Effective income tax rate		32.2	%		35.7	%		38.3	%

Net Deferred Income Tax Assets and Liabilities

Net deferred income tax assets and liabilities are included in the accompanying consolidated balance sheets under the following captions:

	December 31
	2011			2010
	(Millions of yen)
Prepaid expenses and other current assets	¥	61,961		¥	69,197
Other assets		130,582			136,727
Other current liabilities		(1,735	)		(2,149	)
Other noncurrent liabilities		(43,542	)		(47,827	)
	¥	147,266		¥	155,948

Tax Effects of Temporary Differences to Deferred Tax Assets and Deferred Tax Liabilities

The tax effects of temporary differences that give rise to the deferred tax assets and deferred tax liabilities at December 31, 2011 and 2010 are presented below:

	December 31
	2011			2010
	(Millions of yen)
Deferred tax assets:
Inventories	¥	18,885		¥	23,836
Accrued business tax		3,227			6,200
Accrued pension and severance cost		90,025			78,552
Research and development—costs capitalized for tax purposes		12,898			14,740
Property, plant and equipment		31,624			41,737
Accrued expenses		37,992			35,823
Net operating losses carried forward		31,967			28,373
Other		38,220			52,869
		264,838			282,130
Less valuation allowance		(33,788	)		(35,307	)
Total deferred tax assets		231,050			246,823
Deferred tax liabilities:
Undistributed earnings of foreign subsidiaries		(6,783	)		(8,215	)
Net unrealized gains on securities		(1,180	)		(2,119	)
Tax deductible reserve		(6,385	)		(6,038	)
Financing lease revenue		(40,878	)		(37,353	)
Prepaid pension and severance cost		(2,224	)		(2,018	)
Other		(26,334	)		(35,132	)
Total deferred tax liabilities		(83,784	)		(90,875	)
Net deferred tax assets	¥	147,266		¥	155,948

Periods Available to Reduce Future Taxable Income

Periods available to reduce future taxable income vary in each tax jurisdiction and generally range from one year to twenty years as follows:

	(Millions of yen)
Within one year	¥	2,588
After one year through five years		5,097
After five years through ten years		37,199
After ten years through twenty years		42,402
Indefinite period		29,295
Total	¥	116,581

Reconciliation of Beginning and Ending Amount of Unrecognized Tax Benefits

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

	Years ended December 31
	2011			2010			2009
	(Millions of yen)
Balance at beginning of year	¥	6,035		¥	13,235		¥	12,689
Additions for tax positions of the current year		149			73			—
Additions for tax positions of prior years		431			805			1,442
Reductions for tax positions of prior years		(2,139	)		(8,354	)		(1,106	)
Settlements with tax authorities		(1,264	)		(2,471	)		—
Additions from acquisitions		—			4,066			—
Other		(279	)		(1,319	)		210
Balance at end of year	¥	2,933		¥	6,035		¥	13,235