GE 2005 Annual Report Download - page 98
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(98)
Note 8
Provision for Income Taxes (Restated)
(In millions)
2005
(Restated)
2004
(Restated)
2003
(Restated)
GE
Current tax expense $3,037 $ 2,148 $ 2,468
Deferred tax expense (benefit)
from temporary differences (287) (175) 389
2,750 1,973 2,857
GECS
Current tax expense 1,938 1,510 171
Deferred tax expense (benefit)
from temporary differences (603) 225 1,028
1,335 1,735 1,199
CONSOLIDATED
Current tax expense 4,975 3,658 2,639
Deferred tax expense (benefit)
from temporary differences (890) 50 1,417
Total $4,085 $ 3,708 $ 4,056
GE and GECS file a consolidated U.S. federal income tax return. The GECS provision for current tax expense
includes its effect on the consolidated return.
Consolidated current tax expense includes amounts applicable to U.S. federal income taxes of $2,527
million, $587 million and $1,314 million in 2005, 2004 and 2003, respectively, and amounts applicable to non-U.S.
jurisdictions of $2,241 million, $2,577 million and $1,276 million in 2005, 2004 and 2003, respectively.
Consolidated deferred taxes related to U.S. federal income taxes were benefits of $137 million and $27 million in
2005 and 2004, respectively, compared with an expense of $818 million in 2003.
Deferred income tax balances reflect the effects of temporary differences between the carrying amounts of
assets and liabilities and their tax bases, as well as from net operating loss and tax credit carryforwards, and are
stated at enacted tax rates expected to be in effect when taxes are actually paid or recovered. Deferred income tax
assets represent amounts available to reduce income taxes payable on taxable income in future years. We evaluate
the recoverability of these future tax deductions by assessing the adequacy of future expected taxable income from
all sources, including reversal of temporary differences and forecasted operating earnings. See note 21 for details.
We have not provided U.S. deferred taxes on cumulative earnings of non-U.S. affiliates and associated
companies that have been reinvested indefinitely. These earnings relate to ongoing operations and, at December 31,
2005, were approximately $36 billion. Because of the availability of U.S. foreign tax credits, it is not practicable to
determine the U.S. federal income tax liability that would be payable if such earnings were not reinvested
indefinitely. Deferred taxes are provided for earnings of non-U.S. affiliates and associated companies when we plan
to remit those earnings.