Safeway 2009 Annual Report Download - page 76

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SAFEWAY INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
Note J: Taxes on Income
The components of (loss) income before income tax expense are as follows (in millions):
2009 2008 2007
Domestic $ (1,315.6) $ 1,241.2 $ 1,141.9
Foreign 362.3 263.4 261.7
$ (953.3) $ 1,504.6 $ 1,403.6
The components of income tax expense are as follows (in millions):
2009 2008 2007
Current:
Federal $ 137.1 $ 251.1 $ 258.3
State 34.3 40.2 37.1
Foreign 114.9 76.3 89.0
286.3 367.6 384.4
Deferred:
Federal (111.4) 142.7 108.4
State (25.6) 24.8 16.9
Foreign (5.1) 4.2 5.5
(142.1) 171.7 130.8
$ 144.2 $ 539.3 $ 515.2
Reconciliation of the provision for income taxes at the U.S. federal statutory income tax rate to the Company's income
taxes is as follows (dollars in millions):
2009 2008 2007
Statutory rate 35% 35% 35%
Income tax (benefit) expense using federal statutory rate $ (333.7) $ 526.6 $ 491.3
State taxes on income net of federal benefit 5.7 42.2 35.1
Non deductible goodwill impairment 549.5 ––
Tax settlements (70.0) (3.3) (2.4)
Other (7.3) (26.2) (8.8)
$ 144.2 $ 539.3 $ 515.2
Income tax expense was reduced by $74.9 million in 2009 for previously unrecognized tax benefits and related interest
income. The recognition of these items is primarily due to the settlement of a claim with the Internal Revenue Service
(“IRS”) with respect to the 2002 and 2003 impairment of the Company’s investment in Dominick’s, and the completion
of the IRS examination of the Company’s tax returns for 2004 and 2005.
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