ManpowerGroup 2007 Annual Report Download - page 52

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49
Manpower 2007 Annual Report
Notes to Consolidated Financial Statements
05.
Income Taxes
The provision for income taxes from continuing operations is as follows:
Year Ended December 31 2007 2006 2005
Current
United States:
Federal $ 19.4 $ 28.7 $ 12.9
State 6.4 6.2 8.4
Non U.S. 255.3 160.9 61.5
Total current 281.1 195.8 82.8
Deferred
United States:
Federal 25.8 (1.6) 38.6
State 1.4 (1.1) 2.4
Non U.S. (1.8) (16.9) 8.1
Total deferred 25.4 (19.6) 49.1
Total provision $ 306.5 $ 176.2 $ 131.9
A reconciliation between taxes computed at the U.S. Federal statutory rate of 35% and the consolidated effective tax rate is
as follows:
Year Ended December 31 2007 2006 2005
Income tax based on statutory rate $ 276.9 $ 168.7 $ 135.5
Increase (decrease) resulting from:
State income taxes, net of federal benefi t 4.8 1.9 5.5
Non-U.S. tax rate difference (6.4) 4.2 1.0
Repatriation of non-U.S. earnings 1.4 (2.9)(5.3)
Change in valuation reserve 23.2 13.4 (5.1)
Other, net 6.6 (9.1)0.3
Tax provision $ 306.5 $ 176.2 $ 131.9
Deferred income taxes are recorded on temporary differences at the tax rate expected to be in effect when the temporary differences
reverse. Temporary differences, which gave rise to the deferred taxes are as follows:
Year Ended December 31 2007 2006 2005
Current Future Income Tax Benefi ts (Expense)
Accrued payroll taxes and insurance $ 10.7 $ 12.1 $ 15.2
Employee compensation payable 23.7 19.6 20.8
Pension and postretirement benefi ts (0.6) 4.2 0.2
Other 21.0 33.7 38.1
Valuation allowance (4.5) (3.2) (3.2)
50.3 66.4 71.1
Noncurrent Future Income Tax Benefi ts (Expense)
Accrued payroll taxes and insurance 22.4 33.5 46.7
Pension and postretirement benefi ts 41.8 46.7 33.6
Intangible assets (120.1) (121.3) (126.5)
Net operating losses and other 185.3 179.9 120.5
Valuation allowance (101.0) (68.8) (62.8)
28.4 70.0 11.5
Total future tax benefi ts $ 78.7 $ 136.4 $ 82.6
Current tax asset $ 76.3 $ 66.4 $ 71.1
Current tax liability (26.0) ——
Noncurrent tax asset 28.4 70.0 11.5
Total future tax benefi ts $ 78.7 $ 136.4 $ 82.6