World Fuel Services 2012 Annual Report Download - page 93

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Non-current tax (income) expense is primarily related to income tax associated with the reserve for
uncertain tax positions.
A reconciliation of the U.S. federal statutory income tax rate to our effective income tax rate is as follows:
2011 2010
U.S. federal statutory tax rate 35.0% 35.0% 35.0%
Foreign earnings, net of foreign taxes (16.7) (18.7) (18.6)
State income taxes, net of U.S. federal income tax benefit 0.6 1.3 0.1
Other permanent differences (2.9) (1.2) 1.0
Effective income tax rate 16.0% 16.4% 17.5%
For 2012, our effective income tax rate was 16.0%, for an income tax provision of $38.2 million, as
compared to an effective income tax rate of 16.4% and an income tax provision of $39.0 million for 2011.
The lower effective income tax rate for 2012 resulted primarily from differences in the actual results of
our subsidiaries in tax jurisdictions with different income tax rates as compared to 2011, the reduction of
certain income tax reserves for uncertain tax positions due to a discrete item related to a change in
estimate, statute of limitation lapses, and the settlement of an income tax audit.
For 2011, our effective income tax rate was 16.4%, for an income tax provision of $39.0 million, as
compared to an effective income tax rate of 17.5% and an income tax provision of $31.0 million for 2010.
The lower effective income tax rate for 2011 resulted primarily from differences in the actual results of
our subsidiaries in tax jurisdictions with different income tax rates as compared to 2010 and the
reduction of certain income tax reserves for uncertain tax positions due to statute of limitation lapses.
U.S. income taxes have not been provided on undistributed earnings of foreign subsidiaries. As of
December 31, 2012 and 2011, we had $934.5 million and $794.0 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 income 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.
74
2012