World Fuel Services 2015 Annual Report Download - page 80

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The income tax provision (benefit) related to income before income taxes consists of the following components (in millions):
2015 2014 2013
Current:
U.S. federal statutory tax $ (10.7) $ 14.8 $ 8.2
State 0.6 2.5 1.8
Foreign 29.6 22.0 36.2
19.5 39.3 46.2
Deferred:
U.S. federal statutory tax 4.6 10.7 2.2
State 3.0 2.7 0.6
Foreign (14.8) (3.0) (11.0)
(7.2) 10.4 (8.2)
Non-current tax expense (income) 24.0 1.4 1.5
$ 36.3 $ 51.1 $ 39.5
Non-current tax expense (income) is primarily related to income tax associated with the reserve for uncertain tax positions.
A reconciliation of the U.S. federal statutory income tax rate to our effective income tax rate is as follows:
2015 2014 2013
U.S. federal statutory tax rate 35.0 % 35.0 % 35.0 %
Foreign earnings, net of foreign taxes (28.2) (18.1) (18.7)
State income taxes, net of U.S. federal income tax benefit 1.1 1.3 0.6
U.S. tax on deemed dividends 6.1 1.0 1.4
Brazil foreign currency effect on other comprehensive income (5.4) (1.5) (1.4)
Other permanent differences 8.0 1.3 (0.9)
Effective income tax rate 16.6 % 19.0 % 16.0 %
For 2015, our effective income tax rate was 16.6%, for an income tax provision of $36.3 million, as compared to an effective
income tax rate of 19.0% and an income tax provision of $51.1 million for 2014. The lower effective income tax rate for 2015, as
compared to 2014, resulted principally from differences in the results of our subsidiaries in tax jurisdictions with different income
tax rates and a 2014 U.S. gain on the sale of the crude oil joint venture. Without the gain on the sale of the crude oil joint venture
interests, the 2014 effective income tax rate would have been 17.7%.
For 2014, our effective income tax rate was 19.0%, for an income tax provision of $51.1 million, as compared to an effective
income tax rate of 16.0% and an income tax provision of $39.5 million for 2013. The higher effective income tax rate for 2014
resulted primarily from differences in the results of our subsidiaries in tax jurisdictions with different income tax rates and a U.S.
gain on the sale of the crude oil joint venture interests as compared to 2013. Without the gain on the sale of the crude oil joint
venture interests, for 2014, our effective income tax rate would have been 17.7%.
For 2013, our effective income tax rate was 16.0%, for an income tax provision of $39.5 million, as compared to an effective
income tax rate of 16.0% and an income tax provision of $38.2 million for 2012. The effective income tax rate for 2013 remained
flat compared to 2012. However, there were underlying differences in the actual results of our subsidiaries in tax jurisdictions with
different income tax rates as compared to 2012 and differences in outstanding uncertain tax positions net of certain nonrecurring
discrete tax items including statute lapses, audit settlements, and a change in estimate.
U.S. income taxes have not been provided on undistributed earnings of foreign subsidiaries. As of December 31, 2015 and 2014,
we had $1.5 billion and $1.3 billion, respectively, of earnings attributable to foreign subsidiaries. Our intention is to reinvest these
earnings permanently in active non-U.S. business operations. Therefore, no income tax liability has been accrued for these
earnings. Because of the availability of U.S. foreign tax credits, it is not practicable to determine the amount of U.S. income tax
payable if such earnings are not reinvested indefinitely.