Snapple 2009 Annual Report Download - page 108
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The provision for income taxes attributable to continuing operations has the following components (in
millions):
2009 2008 2007
For the Year Ended December 31,
Current:
Federal.............................................. $ 194 $ 111 $ 199
State ............................................... 22 43 33
Non-U.S. ............................................ 12 37 41
Total current provision .................................. 228 191 273
Deferred:
Federal.............................................. 71 (223) 29
State ............................................... (1) (36) 4
Non-U.S. ............................................ 17 7 16
Total deferred provision ............................... 87 (252) 49
Total provision for income taxes ......................... $ 315 $ (61) $ 322
In 2009, 2008 and 2007, the reported amount of income tax expense is different from the amount of income tax
expense that would result from applying the federal statutory rate due principally to state taxes, tax reserves and the
deduction for domestic production activity. Additionally, with respect to 2008, the most significant difference is the
impairment of goodwill and intangible assets.
The following is a reconciliation of income taxes computed at the U.S. federal statutory tax rate to the income
taxes reported in the Consolidated Statements of Operations (in millions):
2009 2008 2007
For the Year Ended December 31,
Statutory federal income tax of 35% .......................... $ 304 $ (131) $ 287
State income taxes, net .................................... 30 (1) 26
Impact of non-U.S. operations .............................. (14) (8) (2)
Impact of impairments .................................... — 53 —
Indemnified taxes(1)...................................... 17 19 27
Other(2)............................................... (22) 7 (16)
Total provision for income taxes ........................... $ 315 $ (61) $ 322
Effective tax rate ........................................ 36.3% 16.3% 39.4%
(1) Amounts represent tax expense recorded by the Company for which Kraft is obligated to indemnify DPS under
the Tax Indemnity Agreement.
(2) Included in other items is $(5) million and $16 million of non-indemnified tax (benefit) expense the Company
recorded in the years ended December 31, 2009 and 2008, respectively, driven by separation related trans-
actions. There was no non-indemnified tax expense driven by separation related transactions for the year ended
December 31, 2007.
Deferred income taxes reflect the tax consequences on future years of temporary differences between the tax
basis of assets and liabilities and their financial reporting basis using enacted tax rates in effect for the year in which
the temporary differences are expected to reverse.
88
DR PEPPER SNAPPLE GROUP, INC.
NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)