MasterCard 2012 Annual Report Download - page 116

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MASTERCARD INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Note 17. Income Taxes
The total income tax provision for the years ended December 31 is comprised of the following components:
2012 2011 2010
(in millions)
Current
Federal .................................................. $ 524 $ 619 $379
State and local ............................................ 24 30 17
Foreign .................................................. 390 369 301
938 1,018 697
Deferred
Federal .................................................. 248 (155) 225
State and local ............................................ 7 (6) 8
Foreign .................................................. (19) (15) (20)
236 (176) 213
Total income tax expense ................................... $1,174 $ 842 $910
The domestic and foreign components of income before income taxes for the years ended December 31 are
as follows:
2012 2011 2010
(in millions)
United States ............................................ $2,508 $1,415 $2,198
Foreign ................................................ 1,424 1,331 559
Total income before income taxes ........................... $3,932 $2,746 $2,757
MasterCard has not provided for U.S. federal income and foreign withholding taxes on approximately $2.6
billion of undistributed earnings from non-U.S. subsidiaries as of December 31, 2012 because such earnings are
intended to be reinvested indefinitely outside of the United States. If these earnings were distributed, foreign tax
credits may become available under current law to reduce the resulting U.S. income tax liability. However, it is
not practicable to determine the amount of the tax and credits.
The provision for income taxes differs from the amount of income tax determined by applying the U.S. federal
statutory income tax rate of 35.0% to pretax income for the years ended December 31, as a result of the following:
2012 2011 2010
Amount Percent Amount Percent Amount Percent
(in millions, except percentages)
Income before income tax expense .... $3,932 $2,746 $2,757
Federal statutory tax ................ 1,376 35.0% 961 35.0% 965 35.0%
State tax effect, net of federal benefit . . 23 0.6% 14 0.5% 19 0.7%
Foreign tax effect .................. (175) (4.4)% (133) (4.9)% (24) (0.9)%
Non-deductible expenses and other
differences ..................... (21) (0.5)% 34 1.2% 23 0.9%
Tax exempt income ................ (2) (0.1)% (3) (0.1)% (5) (0.2)%
Foreign repatriation ................ (27) (0.7)% (31) (1.1)% (68) (2.5)%
Income tax expense ................ $1,174 29.9% $ 842 30.6% $ 910 33.0%
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