Macy's 2010 Annual Report Download - page 74

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Income tax expense (benefit) is as follows:
2010 2009 2008
Current Deferred Total Current Deferred Total Current Deferred Total
(millions)
Federal ................... $217 $234 $451 $48 $ 84 $132 $ 6 $(109) $(103)
State and local ............. 12 10 22 9 37 46 8 (68) (60)
$229 $244 $473 $57 $121 $178 $14 $(177) $(163)
The income tax expense (benefit) reported differs from the expected tax computed by applying the federal
income tax statutory rate of 35% for 2010, 2009 and 2008 to income (loss) before income taxes. The reasons for
this difference and their tax effects are as follows:
2010 2009 2008
(millions)
Expected tax ............................................................ $462 $177 $(1,728)
State and local income taxes, net of federal income tax benefit ..................... 14 30 (40)
Settlement of federal tax examinations ........................................ – (21) –
Non-deductibility of goodwill impairment charges .............................. – – 1,611
Other .................................................................. (3) (8) (6)
$473 $178 $ (163)
During the fourth quarter of 2009, the Company settled Internal Revenue Service (“IRS”) examinations for
fiscal years 2008, 2007 and 2006. As a result of the settlement, the Company recognized previously unrecognized
tax benefits and related accrued interest, primarily attributable to the disposition of former subsidiaries.
F-26