Kodak 2000 Annual Report Download - page 52

Note 10: Income Ta x e s
The components of earnings before income taxes and the re l a t e d
p rovis ion for U.S. and other income taxes were as follows:
(in millions) 2 0 0 0 1 9 9 9 1 9 9 8
E a rnings before
income taxes
U . S . $1 , 2 9 4 $1 , 3 9 8 $ 1 , 5 7 8
Outside the U.S. 8 3 8 7 1 1 5 2 8
To t a l $2 , 1 3 2 $2 , 1 0 9 $ 2 , 1 0 6
U.S. income taxes
C u rrent pro v i s i o n $1 4 5 $1 8 5 $ 3 5 1
D e f e rred pro v i s i o n 2 2 5 2 1 5 1 3 6
Income taxes outside
the U.S.
C u rrent pro v i s i o n 2 6 8 2 2 5 1 1 3
D e f e rred pro v i s i o n 3 7 2 3 6 1
State and other
income taxes
C u rrent pro v i s i o n 3 5 6 0 5 0
D e f e rred pro v i s i o n 1 5 9 5
To t a l $7 2 5 $7 1 7 $ 7 1 6
The diff e rences between the provision for income taxes and
income taxes computed using the U.S. federal income tax rate
w e re as follows:
(in millions) 2 0 0 0 1 9 9 9 1 9 9 8
Amount computed using
the statutory rate $7 4 6 $7 3 8 $ 7 3 7
I n c rease (reduction) in
taxes resulting fro m :
State and other
income taxes 3 3 4 5 3 8
Goodwill amort i z a t i o n 4 0 3 6 2 8
E x p o rt sales and
manufacturing
c re d i t s ( 4 8 ) ( 4 5 ) ( 3 9 )
Operations outside
the U.S. ( 7 9 ) ( 3 6 ) ( 1 5 )
O t h e r, net 3 3 ( 2 1 ) ( 3 3 )
P rovision for
income taxes $7 2 5 $7 1 7 $ 7 1 6
The significant components of deferred tax assets and liabilities
w e re as follows:
(in millions) 2 0 0 0 1 9 9 9
D e f e rred tax assets
Postemployment obligations $9 1 6 $9 9 2
R e s t ructuring pro g r a m s –7 4
I n v e n t o r i e s 1 3 9 1 5 3
Tax loss carry f o rw a rd s 1 0 3 9 4
O t h e r 8 8 4 9 0 5
2 , 0 4 2 2 , 2 1 8
Valuation allowance ( 1 0 3 ) ( 9 4 )
To t a l $1 , 9 3 9 $2 , 1 2 4
D e f e rred tax liabilities
D e p re c i a t i o n $5 5 5 $5 2 7
L e a s i n g 2 2 5 2 6 0
O t h e r 5 9 1 5 3 4
To t a l $1 , 3 7 1 $1 , 3 2 1
The valuation allowance is primarily attributable to certain net
operating loss carry f o rw a rds outside the U.S. A majority of the
net operating loss carry f o rw a rds are subject to a five-year expi-
ration period.
Retained earnings of subsidiary companies outs ide the
U.S. were approximately $1,574 million and $1,439 million at
December 31, 2000 and 1999, re s p e c t i v e l y. Retained earnings
at December 31, 2000 are considered to be reinvested indefi-
n i t e l y. If remitted, they would be substantially free of additional
tax. It is not practicable to determine the deferred tax liability for
t e m p o r a ry diff e rences related to these retained earn i n g s .
Note 11: Restructuring Programs and Cost Reduction
During the third quarter of 1999, the Company re c o rded a pre -
tax re s t ructuring charge of $350 million relating to worldwide
manufacturing and photofinishing consolidation and reductions in
selling, general and administrative positions worldwide. The
Company re c o rded $236 million of the $350 million provision as
cost of goods sold, primarily for employee severance costs, asset
write-downs, and shutdown costs related to these actions. The
remaining $114 million was re c o rded as SG &A for employee
severance payments.