Nike 2011 Annual Report Download - page 48

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48 NIKE,INC.-Form10-K
PARTII
Note9Income Taxes
NOTE9 Income Taxes
Income before income taxes is as follows:
(Inmillions)
Year Ended May31,
2011 2010 2009
Income before income taxes:
UnitedStates $ 1,084 $ 699 $ 846
Foreign 1,760 1,818 1,111
$ 2,844 $ 2,517 $ 1,957
The provision for income taxes is as follows:
(Inmillions)
Year Ended May31,
2011 2010 2009
Current:
UnitedStates
Federal $ 289 $ 200 $ 410
State 57 50 46
Foreign 441 349 308
787 599 764
Deferred:
UnitedStates
Federal (61) 18 (251)
State — (1) (8)
Foreign (15) (6) (35)
(76) 11 (294)
$ 711 $ 610 $ 470
A reconciliation from the U.S. statutory federal income tax rate to the effective income tax rate follows:
Year Ended May31,
2011 2010 2009
Federal income tax rate 35.0% 35.0% 35.0%
State taxes, net of federal benefi t 1.3% 1.3% 1.2%
Foreign earnings -10.2% -13.6% -14.9%
Other, net -1.1% 1.5% 2.7%
EFFECTIVE INCOME TAX RATE 25.0% 24.2% 24.0%
The effective tax rate for the year ended May31,2011 of 25.0% increased
from the fi scal 2010 effective tax rate of 24.2% due primarily to the change in
geographic mix of earnings. A larger percentage of our earnings before income
taxes in the current year are attributable to operations in the UnitedStates
where the statutory tax rate is generally higher than the tax rate on operations
outside of the U.S. This impact was partially offset by changes to uncertain
tax positions. Our effective tax rate for the year ended May31,2010 of 24.2%
increased from the fi scal 2009 effective rate of 24.0%. The effective tax rate
for fi scal 2009 includes a tax benefi t related to charges recorded for the
impairment of Umbro’s goodwill, intangible and other assets.