Cisco 2013 Annual Report Download - page 124
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15. Income Taxes
(a) Provision for Income Taxes
The provision for income taxes consists of the following (in millions):
Years Ended July 27, 2013 July 28, 2012 July 30, 2011
Federal:
Current ........................................ $ 601 $1,836 $ 914
Deferred ....................................... 152 (270) (168)
753 1,566 746
State:
Current ........................................ 81 119 49
Deferred ....................................... 48 (53) 83
129 66 132
Foreign:
Current ........................................ 599 477 529
Deferred ....................................... (237) 9 (72)
362 486 457
Total ...................................... $1,244 $2,118 $1,335
Income before provision for income taxes consists of the following (in millions):
Years Ended July 27, 2013 July 28, 2012 July 30, 2011
United States ........................................ $ 3,716 $ 3,235 $1,214
International ........................................ 7,511 6,924 6,611
Total .......................................... $11,227 $10,159 $7,825
The items accounting for the difference between income taxes computed at the federal statutory rate and the provision for
income taxes consist of the following:
Years Ended July 27, 2013 July 28, 2012 July 30, 2011
Federal statutory rate ................................. 35.0% 35.0% 35.0%
Effect of:
State taxes, net of federal tax benefit ................. 0.8 0.4 1.5
Foreign income at other than U.S. rates ............... (16.4) (15.6) (19.4)
Tax credits ..................................... (1.6) (0.4) (3.0)
Domestic manufacturing deduction .................. (1.0) (1.1) (0.3)
Nondeductible compensation ....................... 1.3 1.8 2.5
Tax audit settlement .............................. (7.1) ——
Other, net ...................................... 0.1 0.7 0.8
Total ...................................... 11.1% 20.8% 17.1%
During fiscal 2013, the Internal Revenue Service (IRS) and the Company settled all outstanding items related to the audit of
the Company’s federal income tax returns for the fiscal years ended July 27, 2002 through July 28, 2007. As a result of the
settlement, the Company recognized a net benefit to the provision for income taxes of $794 million. In addition, the American
Taxpayer Relief Act reinstated the U.S. federal R&D credit through December 2013, retroactive to January 1, 2012. As a
result, the tax provision in fiscal 2013 included a tax benefit of $184 million related to the U.S. federal R&D tax credit, of
which $72 million was attributable to fiscal 2012.
During fiscal 2011, the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 reinstated the
U.S. federal R&D tax credit through December 31, 2011, retroactive to January 1, 2010. As a result, the tax provision in fiscal
2011 included a tax benefit of $234 million related to the U.S. federal R&D tax credit, of which $65 million was attributable to
fiscal 2010.
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