Foot Locker 2006 Annual Report Download - page 63

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47
1993 Repositioning and 1991 Restructuring
The Company recorded charges in 1993 and in 1991 to reflect the anticipated costs to sell or close under-performing
specialty and general merchandise stores in the United States and Canada. As of February 3, 2007 the reserve balance
is $3 million.
19 Income Taxes
Following are the domestic and international components of pre-tax income from continuing operations:
2006 2005 2004
(in millions)
Domestic .............................................. $320 $309 $222
International ........................................... 72 96 152
Total pre-tax income ...................................... $392 $405 $374
The income tax provision consists of the following:
2006 2005 2004
(in millions)
Current:
Federal ........................................... $ 93 $ 72 $ 11
State and local ..................................... 14 11 6
International ...................................... 17 35 52
Total current tax provision ............................ 124 118 69
Deferred:
Federal ........................................... 10 22 43
State and local ..................................... 6 7 8
International ...................................... 5 (5) (1)
Total deferred tax provision.............................. 21 24 50
Total income tax provision............................... $145 $142 $119
Provision has been made in the accompanying Consolidated Statements of Operations for additional income
taxes applicable to dividends received or expected to be received from international subsidiaries. The amount of
unremitted earnings of international subsidiaries for which no such tax is provided and which is considered to be
permanently reinvested in the subsidiaries totaled $426 million and $388 million at February 3, 2007, and January 28,
2006, respectively.
A reconciliation of the significant differences between the federal statutory income tax rate and the effective
income tax rate on pre-tax income from continuing operations is as follows:
2006 2005 2004
Federal statutory income tax rate ....................... 35.0% 35.0% 35.0%
State and local income taxes, net of federal tax benefit ...... 3.3 2.8 2.3
International income taxed at varying rates ............... (0.9) 0.8 (0.6)
Foreign tax credit utilization .......................... (1.2) (3.1) (2.5)
Increase (decrease) in valuation allowance ................ 0.1 (1.5) 0.1
Federal/foreign tax settlements ........................ (0.1) 0.4 (3.3)
Tax exempt obligations ............................... (0.5) (0.4) (0.2)
Federal tax credits .................................. (0.2) (0.2) (0.2)
Other, net ......................................... 1.4 1.2 1.1
Effective income tax rate ............................. 36.9% 35.0% 31.7%