Starbucks 2008 Annual Report Download - page 75

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Defined Contribution Plans
Starbucks maintains voluntary defined contribution plans, both qualified and non-qualified, covering eligible
employees as defined in the plan documents. Participating employees may elect to defer and contribute a portion of
their eligible compensation to the plans up to limits stated in the plan documents, not to exceed the dollar amounts
set by applicable laws. For employees in the United States, the Company matched 25% to 150% of each employee’s
eligible contribution based on years of service, up to a maximum of the first 4% of each employee’s compensation.
The Company’s matching contributions to all US and non-US plans were approximately $25.3 million, $20.1 mil-
lion and $19.3 million in fiscal years 2008, 2007 and 2006, respectively.
Note 15: Income Taxes
The provision for income taxes consisted of the following (in millions):
Fiscal Year Ended Sep 28, 2008 Sep 30, 2007 Oct 1, 2006
Current taxes:
Federal ...................................... $180.4 $326.7 $332.2
State ........................................ 34.3 65.3 57.8
Foreign ...................................... 40.4 31.2 12.4
Deferred taxes, net ............................... (111.1) (39.5) (77.6)
Total.......................................... $144.0 $383.7 $324.8
A reconciliation of the statutory federal income tax rate with the Company’s effective income tax rate was as
follows:
Fiscal Year Ended Sep 28, 2008 Sep 30, 2007 Oct 1, 2006
Statutory rate ................................... 35.0% 35.0% 35.0%
State income taxes, net of federal income tax benefit ...... 2.8 3.4 3.4
Foreign earnings taxed at lower rates .................. (3.6) (1.1) (1.1)
Domestic production activity deduction ................ (2.6) (0.5) (0.6)
Other, net ...................................... (0.3) (0.5) (0.9)
Effective tax rate................................. 31.3% 36.3% 35.8%
US income and foreign withholding taxes have not been provided on approximately $409 million of cumulative
undistributed earnings of foreign subsidiaries and equity investees. The Company intends to reinvest these earnings
for the foreseeable future. If these amounts were distributed to the United States, in the form of dividends or
otherwise, the Company would be subject to additional US income taxes. Determination of the amount of
unrecognized deferred income tax liabilities on these earnings is not practicable because such liability, if any, is
dependent on circumstances existing if and when remittance occurs.
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