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11. INCOME TAXES
The provision for income taxes consisted of the following (in millions):
Years Ended July 31, 2004 July 26, 2003 July 27, 2002
Federal:
Current $ 968 $1,041 $ 929
Deferred 469 6 (480)
1,437 1,047 449
State:
Current 230 138 117
Deferred (19) 2 (68)
211 140 49
Foreign:
Current 274 270 344
Deferred 102 (22) (25)
376 248 319
Total $2,024 $1,435 $817
The Company paid income taxes of $644 million, $1.4 billion, and $909 million in fiscal 2004, 2003, and 2002, respectively.
Income before provision for income taxes consisted of the following (in millions):
Years Ended July 31, 2004 July 26, 2003 July 27, 2002
United States $2,743 $3,325 $1,550
International 4,249 1,688 1,160
Total $6,992 $ 5,013 $ 2,710
The items accounting for the difference between income taxes computed at the federal statutory rate and the provision for income
taxes consisted of the following:
Years Ended July 31, 2004 July 26, 2003 July 27, 2002
Federal statutory rate 35.0% 35.0% 35.0%
Effect of:
State taxes, net of federal tax benefit 1.8 1.8 1. 8
Export sales benefit (0.4) (0.2) (1.5)
Foreign income at other than U.S. rates (8.3) (8.9) (4.9)
Nondeductible in-process R&D —— 0.9
Nondeductible deferred stock-based compensation 1.2 0.8 1.9
Tax credits (0.4) — (3.4)
Other, net —0.1 0.3
Total 28.9% 28.6% 30.1%
62 CISCO SYSTEMS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS