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## (3) INCOME TAXES 

Earnings before income taxes derived from International and United States operations for the years ended March 31 are as follows: 

<img src='content_image/272704.jpg'>

Income tax expense (benefit) for the years ended March 31 consists of the following: 

<img src='content_image/272703.jpg'>

Included in other current liabilities at March 31, 2010 and 2009 are income taxes payable of $2.6 million and $24.8 million, respectively. 

The actual income tax expense for the years ended March 31, 2010, 2009, and 2008 differs from the amounts computed by applying the U.S. federal statutory tax rate of 35% to pre-tax earnings as a result of the following: 

<img src='content_image/272702.jpg'>

The company is not liable for U.S. taxes on future undistributed earnings of most of its non-U.S. subsidiaries and business ventures that it considers indefinitely reinvested abroad because the company adopted the provisions of the American Jobs Creation Act of 2004 (the Act) effective April 1, 2005. All previously recorded deferred tax assets and liabilities related to temporary differences, foreign tax credits, or prior undistributed earnings of these entities whose future and prior earnings were anticipated to be indefinitely reinvested abroad were reversed in March 2005. The company’s fiscal 2010, 2009 and 2008 effective tax rate was 3.08%, 17.22% and 18.05%, respectively. 

