First Data 2009 Annual Report Download - page 136

FIRST DATA CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note 8: Income Taxes
Successor Predecessor
Year ended
December 31,
Period from
September 25, 2007
through
December 31,
2007
Period from
January 1, 2007
through
September 24,
2007(in millions) 2009 2008
Components of pretax (loss) income before discontinued
operations:
Domestic ................................. $(1,799.2) $(3,983.1) $(473.0) $558.1
Foreign ................................... 205.8 (324.1) 34.0 137.4
$(1,593.4) $(4,307.2) $(439.0) $695.5
(Benefit) provision for income taxes before discontinued
operations:
Federal ................................... $ (579.6) $ (667.8) $(182.9) $ 55.0
State and local ............................. (38.8) (46.6) (5.8) 36.3
Foreign ................................... 39.6 15.2 12.6 34.5
$ (578.8) $ (699.2) $(176.1) $125.8
The Company’s effective tax rates from continuing operations differ from statutory rates as follows:
Successor (1) Predecessor
Year ended
December 31,
Period from
September 25, 2007
through
December 31,
2007
Period from
January 1, 2007
through
September 24,
20072009 2008
Federal statutory rate .......................... 35.0% 35.0% 35.0% 35.0%
State income taxes, net of federal income tax
benefit ............................... 2.1 1.1 0.8 1.9
Nontaxable income from noncontrolling
interests .............................. 1.6 1.3 3.1 (5.2)
Foreign rate differential .................... 2.5 1.2 (2.0) (2.2)
Interest earned on municipal investments ...... 0.0 0.0 8.3 (15.7)
Dividend exclusion ....................... 0.0 0.0 1.0 (1.6)
Valuation allowances ...................... (1.7) (0.1) (6.1) (0.2)
Liability for unrecognized tax benefits ........ (2.5) (0.7) (1.5) 3.0
Prior year income tax return true-ups ......... 0.0 0.2 0.0 1.9
Non-deductible merger related expenses ....... 0.0 0.0 (0.2) 2.7
Goodwill impairment ...................... (0.3) (24.4) 0.0 0.0
Other .................................. (0.4) 2.6 1.7 (1.5)
Effective tax rate ............................. 36.3% 16.2% 40.1% 18.1%
(1) The change from pretax income in predecessor periods to a pretax loss in the successor periods caused a
general shift in several components of the tax rate reconciliation.
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