Burger King 2012 Annual Report Download - page 101

Table of Contents


The U.S. Federal tax statutory rate reconciles to the effective tax rate as follows:
 
 







 
U.S. Federal income tax rate 35.0% 35.0% (35.0)% 35.0% 35.0%
State income taxes, net of federal income tax benefit 1.0 1.0 (2.9) 3.0 3.4
Costs/(Benefits) and taxes related to foreign operations 10.7 14.6 11.3 (2.5) 1.7
Foreign tax rate differential (25.0) (26.2) 0.1 (8.8) (5.6)
Foreign exchange differential on tax benefits — (0.1) 0.2 (0.6) 0.3
Change in valuation allowance (1.1) 3.8 3.2 (4.5) (0.6)
Change in accrual for tax uncertainties 1.6 1.8 0.2 (2.6) 0.2
Deductible FTC (3.2) (3.7) — — —
Non Deductible Transaction Costs 2.5 (1.2) 3.5 — —
Other 4.8 (1.8) (0.2) (0.8) (0.1)
Effective income tax rate 26.3% 23.2% (19.6)% 18.2% 34.3%
Our effective tax rate was 26.3% for 2012, primarily as a result of the current mix of income from multiple tax jurisdictions, the release of valuation
allowance and the impact of costs on refranchisings primarily in foreign jurisdictions. Our effective tax rate 23.2% for 2011, primarily as a result of the
exclusion of the tax benefit of foreign ordinary losses not expected to be realized, the current mix of income from multiple tax jurisdictions and the resolution of
state tax audits. Our effective tax rate was (19.6%) for the period from October 19, 2010 through December 31, 2010, primarily as a result of the current mix
of income from multiple tax jurisdictions and the 2010 Transactions. Our effective tax rate was 18.2% for the period from July 1, 2010 through October 18,
2010, primarily as a result of the mix of income from multiple tax jurisdictions and the sale of the Netherlands entity. Our effective tax rate was 34.3% for
Fiscal 2010, primarily as a result of the current mix of income from multiple tax jurisdictions and currency fluctuations.
Income tax expense/(benefit) includes a decrease in valuation allowance primarily related to deferred tax assets in foreign countries of $(8.3) million for
2012, an increase in valuation allowance primarily related to deferred tax assets in foreign countries of $4.6 million for 2011, an increase in valuation
allowance related to foreign tax credit carryforwards and deferred tax assets in foreign countries of $3.3 million for the period from October 19, 2010 through
December 31, 2010, a decrease in valuation allowance related to deferred tax assets in foreign countries of $3.8 for the period from July 1, 2010 through
October 18, 2010, and a decrease of $1.7 million for Fiscal 2010.
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Source: Burger King Worldwide, Inc., 10-K, February 22, 2013 Powered by Morningstar® Document Research℠
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