Intel 2002 Annual Report Download - page 52

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The tax benefit associated with dispositions from employee stock plans reduced taxes currently payable for 2002 by $270 million
($435 million for 2001 and $887 million for 2000).
The provision for taxes reconciles to the amount computed by applying the statutory federal rate of 35% to income before taxes as follows:
The company reduced its tax provision for 2002 by approximately $75 million due to the tax benefit related to the sale of certain businesses
in 2002.
The company reduced its tax provision for 2001 by $100 million due to an increase in the tax benefit related to export sales for 2000,
including the impact of a revision in the tax law. This change in estimated taxes was reflected in the federal tax return for 2000 filed in 2001.
In 2000, the Internal Revenue Service (IRS) closed its examination of the company's tax returns for years up to and including 1998.
Resolution was reached on a number of issues, including adjustments related to the intercompany allocation of profits. As part of this closure, the
company reversed previously accrued taxes, reducing the tax provision for 2000 by $600 million.
62
During 2001, the IRS commenced an examination of years 1999 and 2000. Although the outcome of tax audits is always uncertain,
management believes that adequate amounts of tax have been provided for any adjustments that are expected to result for these years.
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 were as follows:
Current $
542
$
903
$
3,809
Deferred
(417
)
(65
)
633
486
3,744
State:
Current
143
142
454
Non
-
U.S.:
Current
292
366
473
Deferred
(102
)
(65
)
311
264
408
Total provision for taxes
$
1,087
$
892
$
4,606
Effective tax rate
25.9
%
40.9
%
30.4
%
(In Millions)
2002
2001
2000
Computed expected tax
$
1,471
$
764
$
5,299
State taxes, net of federal benefits
93
92
295
Non
-
U.S. income taxed at different rates
(248
)
(336
)
(363
)
Non
-
deductible acquisition
-
related costs
53
667
444
Tax impact related to divestitures
(75
)
—
—
Export sales benefit
(128
)
(245
)
(230
)
Reversal of previously accrued taxes
—
—
(
600
)
Other
(79
)
(50
)
(239
)
Provision for taxes
$
1,087
$
892
$
4,606
(In Millions)
2002
2001
Deferred tax assets
Accrued compensation and benefits
$
185
$
120