eBay 2009 Annual Report Download - page 126

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eBay Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The provision for income taxes is composed of the following (in thousands):
Year Ended December 31,
2007 2008 2009
Current:
Federal ............................... $402,235 $ 414,301 $ 507,411
State and local ......................... 38,087 94,763 96,496
Foreign ............................... 85,649 101,662 64,960
525,971 610,726 668,867
Deferred:
Federal ............................... (81,745) (148,094) (160,811)
State and local ......................... (13,976) (21,109) (20,179)
Foreign ............................... (27,650) (37,433) 2,177
(123,371) (206,636) (178,813)
$ 402,600 $ 404,090 $ 490,054
The following is a reconciliation of the difference between the actual provision for income taxes and the
provision computed by applying the federal statutory rate of 35% for 2007, 2008 and 2009 to income before
income taxes (in thousands):
Year Ended December 31,
2007 2008 2009
Provision at statutory rate .................... $262,798 $ 764,248 $1,007,703
Permanent differences:
Foreign income taxed at different rates ..... (404,007) (519,203) (475,967)
Goodwill impairment ................... 486,828 — —
Gain on sale of Skype ................... — — (498,360)
Joltid settlement ....................... — — 120,339
Legal entity restructuring ................ — — 184,410
Change in valuation allowance ............ 34,983 48,614 58,670
Stock-based compensation ............... 24,516 26,730 41,436
State taxes, net of federal benefit .......... 15,672 54,356 49,606
Tax credits ........................... (7,766) (9,251) (13,352)
Other ................................ (10,424) 38,596 15,569
$ 402,600 $ 404,090 $ 490,054
In November 2009, we completed a legal entity restructuring to align our corporate structure with our
organizational objectives. The tax impact of this restructuring resulted in U.S. federal income taxes of
$184.4 million and state income taxes of $23.0 million, which are included in the 2009 tax expense.
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