Dell 2004 Annual Report Download - page 51

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Table of Contents
of this excess book basis. The excess book basis of $2.9 billion excludes the $4.1 billion to be repatriated under the Act.
The components of Dell's net deferred tax asset are as follows:
January 28, January 30,
2005 2004
(in millions)
Deferred tax assets:
Deferred revenue $ 241 $ 86
Inventory and warranty provisions 232 260
Investment impairments and unrealized gains 23 39
Provisions for product returns and doubtful accounts 22 21
Capital loss 6 96
Leasing — 69
Other 99 104
623 675
Deferred tax liabilities:
Fixed assets (156) (129)
Leasing (10) —
Other (26) (74)
(192) (203)
Net deferred tax asset $ 431 $ 472
Current portion (included in other current assets) $ 425 $ 339
Non-current portion (included in other non-current assets) 6 133
Net deferred tax asset $ 431 $ 472
A portion of Dell's operations operate at a reduced tax rate or free of tax under various tax holidays which expire in whole or in part during fiscal
2012 through 2019. Many of these holidays may be extended when certain conditions are met. The income tax benefits attributable to the tax
status of these subsidiaries were estimated to be approximately $280 million ($0.11 per share) in fiscal 2005, $210 million ($0.08 per share) in
fiscal 2004, and $137 million ($0.05 per share) in fiscal 2003.
The effective tax rate differed from the statutory U.S. federal income tax rate as follows:
Fiscal Year Ended
January 28, January 30, January 31,
2005 2004 2003
U.S. federal statutory rate 35.0% 35.0% 35.0%
Foreign income taxed at different rates (11.6) (7.3) (7.9)
Tax repatriation charge 6.3 — —
Other 1.8 1.3 2.8
Effective tax rate 31.5% 29.0% 29.9%
The increase in Dell's fiscal 2005 effective tax rate, compared to fiscal 2004 and fiscal 2003, is due to the aforementioned tax repatriation
charge, partially offset by a higher proportion of operating profits attributable to foreign jurisdictions.
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