Snapple 2012 Annual Report Download - page 93
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DR PEPPER SNAPPLE GROUP, INC.
NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
75
The following is a reconciliation of provision for income taxes computed at the U.S. federal statutory tax rate to the provision
for income taxes reported in the Consolidated Statements of Income (in millions):
For the Year Ended December 31,
2012 2011 2010
Statutory federal income tax of 35% $ 342 $ 324 $ 287
State income taxes, net 35 25 30
U.S. federal domestic manufacturing benefit (21) (30)(18)
Impact of non-U.S. operations (9) (5)(8)
Indemnified taxes(1) 811 10
Other (6) (5)(7)
Total provision for income taxes $ 349 $ 320 $ 294
Effective tax rate 35.7% 34.6% 35.8%
____________________________
(1) Amounts represent tax expense recorded by the Company for which is obligated to indemnify DPS under the Tax
Indemnity Agreement.
The effective tax rates for 2012 and 2011 were 35.7% and 34.6%, respectively. The prior year effective tax rate included
certain state and federal income tax benefits, principally the domestic manufacturing deduction, related to the PepsiCo, Inc.
("PepsiCo") and The Coca-Cola Company ("Coca-Cola") licensing agreements executed in 2010. The impact of these benefits
decreased the 2011 provision for income taxes and the effective tax rate by $19 million and 2.1%, respectively. The provision for
income taxes for the year ended December 31, 2010 included a $14 million benefit due to a favorable change of Mexican law.
Deferred tax assets (liabilities), were comprised of the following as of December 31, 2012 and 2011 (in millions):
December 31, December 31,
2012 2011
Deferred income tax assets:
Deferred revenue $ 557 $ 580
Accrued liabilities 115 88
Net operating loss and credit carryforwards 22 32
Compensation 25 22
Pension and postretirement benefits 18 14
Inventory 12 14
Other 57 67
806 817
Deferred income tax liabilities:
Intangible assets and goodwill (986)(942)
Fixed assets (214)(197)
Other (8)(5)
(1,208)(1,144)
Valuation allowance (32)(32)
Net deferred income tax liability $(434)$(359)