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Income Taxes
The provision for income taxes consisted of:
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 |
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 |
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| Current taxes: |
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|
|
|
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| |
U.S. and state |
$4,027 |
|
$4,744 |
|
$3,243 |
|
| |
International |
281 |
|
535 |
|
514 |
|
|
| |
|
Current taxes |
4,308 |
|
5,279 |
|
3,757 |
|
| Deferred taxes |
(202 |
) |
(425 |
) |
47 |
|
|
| |
|
|
Provision for income taxes |
$4,106 |
|
$4,854 |
|
$3,804 |
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|
U.S. and international components of income before income taxes were:
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| |
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| U.S. |
$10,649 |
|
$11,860 |
|
$ |
9,189 |
|
| International |
1,242 |
|
2,415 |
|
2,336 |
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Income before income taxes |
$11,891 |
|
$14,275 |
|
$11,525 |
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In 1999, the effective tax rate was 35.0%, excluding the impact of the gain on the sale of Softimage, Inc. In 2000, the effective tax rate was 34.0%, and included the effect of a 2.5% reduction from the U.S. statutory rate for tax credits and a 1.5% increase for other items. In 2001, the effective tax rate was 33.0%, and included the effect of a 3.1% reduction from the U.S. statutory rate for tax credits and a 1.1% increase for other items. The components of the differences between the U.S. statutory tax rate and the Company’s effective tax rate in 1999 were not significant.
Deferred income taxes were:
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| Deferred income tax assets: |
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Revenue items |
$ 1,320 |
|
$ 1,469 |
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| |
Expense items |
2,122 |
|
1,761 |
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|
| |
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Deferred income tax assets |
3,442 |
|
3,230 |
|
|
| Deferred income tax liabilities: |
|
|
|
|
| |
Unrealized gain on investments |
(874 |
) |
(395 |
) |
| |
International earnings |
(1,766 |
) |
(1,667 |
) |
| |
Other |
(121 |
) |
(55 |
) |
|
| |
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Deferred income tax liabilities |
$(2,761 |
) |
$(2,117 |
) |
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During fiscal 2001, the U.S. Tax Court issued an adverse ruling which is being appealed to the 9th Circuit Court of Appeals for taxes assessed in 1990 and 1991. Income taxes, except for 1990 and 1991 assessments, have been settled with the Internal Revenue Service (IRS) for all years through 1994. The IRS is examining the Company’s 1995 and 1996 U.S. income tax returns. Management believes any adjustments which may be required will not be material to the financial statements. Income taxes paid were $874 million in 1999, $800 million in 2000, and $1.3 billion in 2001.
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