Dell 2006 Annual Report Download - page 87
Download and view the complete annual report
Please find page 87 of the 2006 Dell annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.-
1 -
2
-
3
-
4
-
5
-
6
-
7
-
8
-
9
-
10
-
11
-
12
-
13
-
14
-
15
-
16
-
17
-
18
-
19
-
20
-
21
-
22
-
23
-
24
-
25
-
26
-
27
-
28
-
29
-
30
-
31
-
32
-
33
-
34
-
35
-
36
-
37
-
38
-
39
-
40
-
41
-
42
-
43
-
44
-
45
-
46
-
47
-
48
-
49
-
50
-
51
-
52
-
53
-
54
-
55
-
56
-
57
-
58
-
59
-
60
-
61
-
62
-
63
-
64
-
65
-
66
-
67
-
68
-
69
-
70
-
71
-
72
-
73
-
74
-
75
-
76
-
77 -
78 -
79 -
80 -
81 -
82 -
83 -
84 -
85 -
86 -
87 -
88 -
89 -
90 -
91 -
92 -
93 -
94 -
95 -
96 -
97 -
98
-
99
-
100
-
101
-
102
-
103
-
104
-
105
-
106
-
107
-
108
-
109
-
110
-
111
-
112
-
113
-
114
-
115
-
116
-
117
-
118
-
119
-
120
-
121
-
122
-
123
-
124
-
125
-
126
-
127
-
128
-
129
-
130
-
131
-
132
-
133
-
134
-
135
-
136
-
137
-
138
-
139
-
140
-
141
-
142
-
143
-
144
-
145
-
146
-
147
-
148
-
149
-
150
-
151
-
152
-
153
-
154
-
155
-
156
-
157
-
158
-
159
-
160
-
161
-
162
-
163
-
164
-
165
-
166
-
167
-
168
-
169
-
170
-
171
-
172
-
173
-
174
-
175
-
176
 |
 |
Table of Contents
DELL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
NOTE 4 — Income Taxes
The provision for income taxes consists of the following:
Fiscal Year Ended
February 2, February 3, January 28,
2007 2006 2005
As As
Restated Restated
(in millions)
Current:
Domestic $ 846 $ 1,141 $ 881
Foreign 178 263 215
Tax repatriation (benefit) charge — (85) 280
Deferred (262) (313) 9
Provision for income taxes $ 762 $ 1,006 $ 1,385
Income before income taxes included approximately $2.6 billion, $3.0 billion, and $2.3 billion related to foreign operations in
Fiscal 2007, 2006, and 2005, respectively. On October 22, 2004, the American Jobs Creation Act of 2004 (the "Act") was
signed into law. Among other items, the Act created a temporary incentive for U.S. multinationals to repatriate accumulated
income earned outside the U.S. at an effective tax rate of 5.25%, versus the U.S. federal statutory rate of 35%. In the fourth
quarter of Fiscal 2005, Dell recorded an initial estimated income tax charge of $280 million based on the decision to
repatriate $4.1 billion of foreign earnings. This tax charge included an amount relating to a drafting oversight that
Congressional leaders expected to correct in calendar year 2005. On May 10, 2005, the Department of Treasury issued
further guidance that addressed the drafting oversight. In the second quarter of Fiscal 2006, Dell reduced its original estimate
of the tax charge by $85 million as a result of the guidance issued by the Treasury Department in May 2005. As of
February 3, 2006, Dell had completed the repatriation of the $4.1 billion in foreign earnings. No foreign income was
repatriated during Fiscal 2007.
Deferred taxes have not been recorded on the excess book basis in the amount of approximately $7.9 billion in the shares of
certain foreign subsidiaries because these basis differences are not expected to reverse in the foreseeable future and are
expected to be permanent in duration. These basis differences arose primarily through the undistributed book earnings of the
subsidiaries that Dell intends to reinvest indefinitely. The basis differences could reverse through a sale of the subsidiaries,
the receipt of dividends from the subsidiaries as well as various other events. Net of available foreign tax credits, residual
income tax of approximately $2.4 billion would be due upon a reversal of this excess book basis.
84