ADT 2010 Annual Report Download - page 190

TYCO INTERNATIONAL LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
6. Income Taxes (Continued)
The reconciliation between U.S. federal income taxes at the statutory rate and the Company’s
provision for income taxes on continuing operations for the years ended September 24, 2010,
September 25, 2009 and September 26, 2008 is as follows ($ in millions):
2010 2009 2008
Notional U.S. federal income tax (benefit) expense at the statutory
rate ............................................... $445 $(620) $ 487
Adjustments to reconcile to the income tax provision:
U.S. state income tax provision, net ........................ 16 18 34
Non-U.S. net earnings(1) ................................ (376) (282) (228)
Nondeductible charges ................................. 62 885 46
Valuation allowance ................................... (19) 9 (62)
Other ............................................. 10 61 49
Provision for income taxes .............................. $138 $ 71 $326
(1) Excludes nondeductible charges and other items which are broken out separately in the table.
Included in the Non-U.S. net earnings for 2010 is a $20 million tax benefit as a result of the
Company’s disposition of its French security business and a nonrecurring item generating a $30 million
tax benefit.
Included in the nondeductible charges for 2009 is the loss driven by the goodwill impairment
charges of $2.6 billion, for which almost no tax benefit is available.
Included in income taxes for 2008 is a benefit from increased profitability in operations in lower
tax rate jurisdictions partially offset by enacted tax law changes that negatively impacted non-U.S.
deferred tax assets. The valuation allowance benefit includes a tax impact of $62 million associated with
business restructurings, which increased the Company’s profitability in certain jurisdictions.
102 2010 Financials