World Fuel Services 2011 Annual Report Download - page 97

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8. Income Taxes
U.S. and foreign income (loss) before income taxes consist of the following (in thousands):
2010 2009
United States $ 56,836 $ (2,886) $ 3,916
Foreign 181,367 180,416 145,993
$238,203 $177,530 $149,909
The income tax provision (benefit) related to income before taxes consists of the following components
(in thousands):
2010 2009
Current:
U.S. federal statutory tax $ 7,685 $12,245 $ —
State 2,767 1,358 (242)
Foreign 27,514 22,367 20,897
37,966 35,970 20,655
Deferred:
U.S. federal statutory tax 6,218 (3,776) 5,126
State 2,194 (1,926) 625
Foreign (6,771) (1,677) 2,168
1,641 (7,379) 7,919
Non-current tax (income) expense (606) 2,436 3,772
$39,001 $31,027 $32,346
Non-current tax (income) expense is primarily related to tax associated with the reserve for uncertain tax
positions.
A reconciliation of the U.S. federal statutory tax rate to our effective income tax rate is as follows:
2010 2009
U.S. federal statutory tax rate 35.0% 35.0% 35.0%
Foreign earnings, net of foreign taxes (18.7) (18.6) (16.9)
State income taxes, net of U.S. federal income tax benefit 1.3 0.1 —
Other permanent differences (1.2) 1.0 3.5
Effective income tax rate 16.4% 17.5% 21.6%
For 2011, our effective tax rate was 16.4%, for an income tax provision of $39.0 million, as compared to
an effective tax rate of 17.5% and an income tax provision of $31.0 million for 2010. The lower effective
tax rate for 2011 resulted primarily from differences in the actual results of our subsidiaries in tax
jurisdictions with different tax rates as compared to 2010 and the reduction of certain tax reserves for
uncertain tax positions due to statute of limitation lapses.
For 2010, our effective tax rate was 17.5%, for an income tax provision of $31.0 million, as compared to
an effective tax rate of 21.6% and an income tax provision of $32.3 million for 2009. The lower effective
tax rate for 2010 resulted primarily from differences in the actual results of our subsidiaries in tax
jurisdictions with different tax rates as compared to 2009.
U.S. income taxes have not been provided on undistributed earnings of foreign subsidiaries. As of
December 31, 2011 and 2010, we had $794.0 million and $574.4 million, respectively, of earnings
attributable to foreign subsidiaries. Our intention is to reinvest these earnings permanently in active
non-U.S. business operations. Therefore, no tax liability has been accrued for these earnings. Because of
the availability of U.S. foreign tax credits, it is not practicable to determine the amount of U.S. income tax
payable if such earnings are not reinvested indefinitely.
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2011
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2011