Moltco, a domestic corporation, manufactures batteries for sale in the United States and abroad. Moltco markets its batteries in Europe through its wholly-owned foreign sales subsidiary, Molti. Molti was organized in Year 1, and its functional currency is the British pound (). Moltis tax attributes for its first two years of operations are as follows:

Year 1 Year 2

Taxable income....................................................................... 100 million.......... None

Subpart F income (included in 100 million)........................... 40 million. ........None

None Foreign taxes attributable to Subpart F income........................ 10 million........ N/A

Actual dividend distributions (paid at end of year)..........................None...... 8 million

The pound had an average value of $1.50 during Year 1, $1.65 during Year 2, and was worth $1.60 at the end of Year 1, and $1.70 at the end of Year 2. . Assume that the dividend distribution in Year 2 was not subject to foreign withholding taxes. For both Year 1 and Year 2, what will be the results of the subsidiary included on the US tax return?