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PART II
NOTE 9 — Income Taxes
Incomebeforeincometaxesisasfollows:
Year Ended May 31,
(In millions) 2012 2011 2010
Income before income taxes:
United States $ 792 $ 1,084 $ 699
Foreign 2,191 1,760 1,818
TOTAL INCOME BEFORE INCOME TAXES $ 2,983 $ 2,844 $ 2,517
The provision for income taxes is as follows:
Year Ended May 31,
(In millions) 2012 2011 2010
Current:
United States
Federal $ 274 $ 289 $ 200
State 51 57 50
Foreign 495 441 349
Total 820 787 599
Deferred:
United States
Federal (54) (61) 18
State 4 — (1)
Foreign (10) (15) (6)
Total (60) (76) 11
TOTAL INCOME TAX EXPENSE $ 760 $ 711 $ 610
A reconciliation from the U.S. statutory federal income tax rate to the effective income tax rate follows:
Year Ended May 31,
2012 2011 2010
Federal income tax rate 35.0% 35.0% 35.0%
State taxes, net of federal benefit 1.3% 1.3% 1.3%
Foreign earnings -11.5% -10.5% -12.7%
Other, net 0.7% -0.8% 0.6%
EFFECTIVE INCOME TAX RATE 25.5% 25.0% 24.2%
The effective tax rate for fiscal 2012 was 50 basis points higher than the
effective tax rate for fiscal 2011 primarily due to changes in uncertain tax
positions, partially offset by a reduction in the effective tax rate on operations
outside of the United States as a result of changes in geographical mix of
foreign earnings. The effective tax rate for fiscal 2011 was 80 basis points
higher than the effective tax rate for fiscal 2010 primarily due to the change in
geographic mix of earnings. A larger percentage of our earnings in fiscal 2011
were attributable to operations in the U.S., where the statutory tax rate is
generally higher than the effective tax rate on operations outside of the U.S.
This impact was partially offset by changes to uncertain tax positions.
NIKE, INC. Š2012 Form 10-K 55