AutoNation 2000 Annual Report Download - page 56

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Current:
Federal .............................. $ 101.3 $ 108.4 $ 105.5
State ................................ 4.3 22.8 9.1
Federal and state deferred ............ 91.3 (111.2) 26.7
Change in valuation allowance ......... -- (16.0) (14.5)
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Provision for income taxes ............ $ 196.9 $ 4.0 $ 126.8
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A reconciliation of the provision for income taxes calculated using the
statutory federal income tax rate to the Company's provision for income taxes
from continuing operations for the years ended December 31 is as follows:
2000 1999 1998
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Provision (benefit) for income taxes at statutory rate of 35% ......... $ 183.8 $ (9.6) $ 123.4
Non-deductible expenses ............................................... 5.8 28.6 10.3
State income taxes, net of federal benefit ............................ 10.1 1.0 7.6
Change in valuation allowance ......................................... -- (16.0) (14.5)
Other, net ............................................................ (2.8) -- --
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Provision for income taxes ............................................ $ 196.9 $ 4.0 $ 126.8
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Components of the net deferred income tax liability at December 31 are as
follows:
2000 1999
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Deferred income tax liabilities:
Book basis in property over tax basis ................. $ 360.8 $ 336.1
Expenses deducted for tax, amortized for book ......... 689.3 705.6
Deferred income tax assets:
Net operating losses .................................. (3.6) (4.2)
Accruals not currently deductible ..................... (278.6) (342.0)
Valuation allowance ................................... 109.3 109.3
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Net deferred income tax liability ....................... $ 877.2 $ 804.8
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At December 31, 2000, the Company had available domestic net operating
loss carryforwards primarily related to acquired businesses of approximately
$9.4 million which begin to expire in the year 2011. In assessing the
realizability of deferred tax assets, management considers whether it is more
likely than not that some portion or all of the deferred tax assets will not be
realized. The Company provides valuation allowances to offset portions of
deferred tax assets due to uncertainty surrounding the future realization of
such deferred tax assets. The Company adjusts the valuation allowance in the
period management determines it is more likely than not that deferred tax
assets will or will not be realized. Future decreases to the valuation
allowance may be allocated to reduce intangible assets associated with business
acquisitions accounted for under the purchase method of accounting.
55
AUTONATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)