EMC 2011 Annual Report Download - page 75

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Table of Contents
EMC CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
L. Income Taxes
Our provision (benefit) for income taxes consists of (table in thousands):
2011 2010 2009
Federal:
Current $ 488,031 $ 518,309 $ 181,578
Deferred 14,333 4,170 7,977
502,364 522,479 189,555
State:
Current 70,676 49,488 13,114
Deferred (45,272) (20,419) 13,419
25,404 29,069 26,533
Foreign:
Current 101,101 120,287 30,885
Deferred 11,516 (33,538) 5,802
112,617 86,749 36,687
Total provision for income taxes $ 640,385 $ 638,297 $ 252,775
In 2011, 2010 and 2009, we were able to utilize $19.5 million, $46.9 million and $68.9 million, respectively, of net operating loss carryforwards and tax
credit carryforwards to reduce the current portion of our tax provision.
The effective income tax rate is based upon the income for the year, the composition of the income in different countries, and adjustments, if any, for
the potential tax consequences, benefits or resolutions of tax audits. A reconciliation of our income tax provision to the statutory federal tax rate is as follows:
2011 2010 2009
Statutory federal tax rate 35.0% 35.0% 35.0%
State taxes, net of federal taxes 0.7 1.0 1.0
Resolution of uncertain tax positions (1.7) (0.6) (4.5)
Tax rate differential for international jurisdictions and other international related tax items (14.4) (12.2) (17.5)
U.S. tax credits (2.8) (3.3) (3.1)
Changes in valuation allowance — (0.6) —
International reorganization of acquired companies — 3.2 4.4
Permanent items 2.5 2.5 4.2
Other 0.4 (0.5) (1.1)
19.7% 24.5% 18.4%
Substantially all the tax rate differential for international jurisdictions was driven by earnings of our Irish subsidiaries.
In 2010, a reorganization of international operations was effected which included the transfer of certain assets of Isilon, Archer Technologies and Bus-
Tech into the single EMC international holding company, which negatively impacted the rate by 3.2 percentage points.
In 2009, we effected a plan to reorganize our international operations by transferring certain assets of our RSA and Data Domain entities and legacy
foreign corporations owned directly by EMC into a single EMC international holding company. As a result of this reorganization, we incurred income taxes
which negatively impacted the rate by 4.4 percentage points.
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