American Home Shield 2011 Annual Report Download - page 92
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Table of Contents
Notes to the Consolidated Financial Statements (Continued)
Note 5. Income Taxes (Continued)
The Company's policy is to recognize potential interest and penalties related to its tax positions within the tax provision. During the years ended
December 31, 2011 and 2010, the Company reversed interest expense of $1.7 million and $0.6 million, respectively, through the tax provision. During the
year ended December 31, 2009, the Company recognized interest expense of $0.6 million through the tax provision. During the year ended December 31,
2011, the Company reversed penalties of $0.3 million through the tax provision. No tax penalties were recorded through the provision during the years ended
December 31, 2010 or 2009. As of December 31, 2011 and 2010, the Company had accrued for the payment of interest and penalties of $1.4 million and
$3.5 million, respectively.
The components of our income from continuing operations before income taxes are as follows:
Year Ended Dec. 31,
2011 2010 2009
U.S. 108,603 22,877 (10,579)
Foreign 3,146 5,507 7,517
Total 111,749 28,384 (3,062)
The reconciliation of income tax computed at the U.S. federal statutory tax rate to the Company's effective income tax rate for continuing operations is as
follows:
Year Ended Dec. 31,
2011 2010 2009
Tax at U.S. federal statutory rate 35.0% 35.0% 35.0%
State and local income taxes, net of U.S. federal benefit 1.8 0.4 187.3
Tax credits (2.3) (9.2) 56.1
Permanent items 1.5 9.2 16.4
Unremitted foreign earnings — 4.5 41.4
Other, including foreign rate differences and reserves 3.3 (1.3) (35.6)
Effective rate 39.3% 38.6% 300.6%
In the effective tax rate reconciliation above, the state rate benefit for the year ended December 31, 2009 is primarily the result of a change in the state
tax rates used to measure deferred taxes.
The effective tax rate for discontinued operations for the years ended December 31, 2011, 2010 and 2009, was a tax benefit of 42.3 percent, 35.9 percent
and 35.9 percent, respectively.
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