Safeway 2012 Annual Report Download - page 75

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SAFEWAY INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
63
The components of income tax expense are as follows (in millions):
2012 2011 2010
Current:
Federal $ 180.0 $223.2$180.2
State 21.0 48.0 43.9
Foreign 97.2 156.4 97.8
298.2 427.6 321.9
Deferred:
Federal (33.2) (45.1) (20.7)
State (5.4) (16.0) (5.2)
Foreign 2.6 (2.6) (5.4)
(36.0) (63.7) (31.3)
$ 262.2 $363.9$290.6
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):
2012 2011 2010
Statutory rate 35% 35% 35%
Income tax expense using federal statutory rate $ 289.9 $ 308.7 $ 308.4
State taxes on income net of federal benefit 10.1 20.8 25.2
Canadian tax rate differential —(6.1) (23.1)
Utilization of foreign tax credits (25.1) (28.5) —
Taxes on foreign earnings not permanently reinvested —98.9 —
Other (12.7) (29.9) (19.9)
$ 262.2 $ 363.9 $ 290.6
Income tax expense increased by $98.9 million in 2011 as a result of repatriation taxes on a $1.1 billion
dividend from the Company's Canadian subsidiary to the U.S. parent.
Safeway began to accrue repatriation taxes on the earnings of its Canadian subsidiary in the second quarter
of 2011. As a result of this change in policy, income tax expense was reduced by $28.5 million in 2011 and
$25.1 million in 2012 as Safeway will use foreign tax credits to reduce the U.S. tax on those earnings.