Intel 1994 Annual Report Download - page 26

The tax benefit associated with dispositions from employee stock plans reduced taxes currently payable for 1994 by $61 million and for 1993
by $68 million. Such benefits are credited to Common Stock and capital in excess of par value when realized.
The provision for taxes reconciles to the amount computed by applying the statutory U.S. federal rate of 35% for 1994 (35% for 1993 and 34%
for 1992) to income before taxes as follows:
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial
reporting purposes and the amounts used for income tax purposes. Significant components of the Company's deferred tax assets and liabilities
at fiscal year-ends are as follows:
During 1992, in accordance with SFAS No. 96, deferred income taxes were provided for significant temporary differences. The principal items
making up the 1992 deferred tax expense included $42 million for depreciation reduced by $18 million for inventory valuation and other
reserves, and $12 million of other items.
The Company's U.S. income tax returns for the years 1978 through 1987 have been examined by the Internal Revenue Service (IRS). In 1989,
the Company received a notice of proposed deficiencies from the IRS totaling $36 million, exclusive of penalties and interest, for the years
1978 through 1982. These proposed deficiencies relate primarily to operations in Puerto Rico. In 1989, the Company filed a petition in the U.S.
Tax Court contesting these proposed deficiencies and subsequently reached settlement of certain issues with the IRS. In 1993, the U.S. Tax
Court ruled in favor of the Company on the export source issue and for the IRS on another, smaller issue. The IRS has appealed the decision to
the United States Court of Appeals for the Ninth Circuit, and the Company has filed a cross
-
appeal of the decision.
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991 981 345
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State:
Current 162 150 71
Foreign:
Current 134 127 79
Deferred 28 (23) 7
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162 104 86
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Total provision for taxes $1,315 $1,235 $ 502
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Effective tax rate 36.5% 35.0% 32.0%
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(In millions) 1994 1993 1992
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Computed expected tax $1,261 $1,235 $ 533
State taxes, net of federal benefits 105 98 47
Research and experimental credit (11) (23) (7)
Foreign sales corporation benefit (50) (46) (36)
Provision for combined
foreign and U.S. taxes on
certain foreign income at
rates (less) greater
than U.S. rate (37) 1 (17)
Other 47 (30) (18)
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Provision for taxes $1,315 $1,235 $ 502
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(In millions) 1994 1993
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Deferred tax assets:
Accrued compensation and other benefits $ 49 $ 44
Accrued advertising 17 18
Deferred income 127 76
Inventory valuation and related reserves 255 77
Interest and taxes 54 72
Other, net 50 23
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552 310
Deferred tax liabilities:
Depreciation (338) (245)
Unremitted earnings of certain subsidiaries (51) (52)
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(389) (297)
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Net deferred tax asset $ 163 $ 13
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