Emerson 2009 Annual Report Download - page 42

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Emerson 200940

Pretax earnings from continuing operations consist of the following:
2007  2008  2009
United States $1,550 1,691 1,134
Non-U.S. 1,543 1,900 1,283
Total pretax earnings from continuing operations $3,093 3,591 2,417
The principal components of income tax expense follow:
2007  2008  2009
Current:
Federal $606 539
231
State and local 58 50 25
Non-U.S. 364 496 315
Deferred:
Federal (4) 65
150
State and local (14) (5) 9
Non-U.S. (46) (8) (37)
Income tax expense $964 1,137 693
Reconciliations of the U.S. federal statutory tax rate to the Company’s effective tax rate follow:
   2007 2008 2009
Federal rate 35.0% 35.0% 35.0%
State and local taxes, net of federal tax benefit 0.9 0.8 0.9
Non-U.S. rate differential (4.1) (4.2) (5.1)
Non-U.S. tax holidays (1.3) (0.9) (2.0)
U.S. manufacturing deduction (0.4) (0.8) (0.9)
Export benefit (0.2) – –
Other 1.3 1.8 0.8
Effective income tax rate 31.2% 31.7% 28.7%
Non-U.S. tax holidays reduce tax rates in certain foreign jurisdictions and are expected to expire over the next six years.