Foot Locker 2008 Annual Report Download - page 66
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50
21. Income Taxes
Following are the domestic and international components of pre-tax (loss) income from continuing operations:
2008 2007 2006
(in millions)
Domestic ........................................................ $(174) $(131) $320
International ..................................................... 74 81 72
Total pre-tax (loss) income ........................................... $(100) $(50) $392
The 2007 income tax provision presented below has been restated to reflect an immaterial correction, see note 2.
The income tax (benefit) provision consists of the following:
2008 2007 2006
(in millions)
Current:
Federal ....................................................... $ 2 $ (3) $ 93
State and local ................................................. 3 (4) 14
International .................................................. 18 43 17
Total current tax provision ........................................ 23 36 124
Deferred:
Federal ....................................................... (42) (52) 10
State and local ................................................. (6) 1 6
International .................................................. 4 (78) 5
Total deferred tax (benefit) provision .................................. (44) (129) 21
Total income tax (benefit) provision ................................... $(21) $ (93) $145
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 $511 million and $476 million at January 31, 2009, and February 2,
2008, respectively.
A reconciliation of the significant differences between the federal statutory income tax rate and the effective
income tax rate on pre-tax (loss) income from continuing operations is as follows:
2008 2007 2006
Federal statutory income tax rate ................................. (35.0)% (35.0)% 35.0%
State and local income taxes, net of federal tax benefit ................ (6.6) (11.0) 3.3
International income taxed at varying rates ......................... (1.7) 7.5 (0.9)
Foreign tax credit utilization .................................... (5.3) (53.1) (1.2)
(Decrease) increase in valuation allowance .......................... 0.2 (120.0) 0.1
Federal/foreign tax settlements .................................. (2.2) — (0.1)
Tax exempt obligations ......................................... — (3.7) (0.5)
Federal tax credits ............................................ (1.2) (1.6) (0.2)
Foreign dividends and gross-up ................................... — 25.4 —
Non-deductible impairment charges ............................... 26.9 — —
Other, net ................................................... 4.1 4.5 1.4
Effective income tax rate ....................................... (20.8)% (187.0)% 36.9%