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Table of Contents
ORACLE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
May 31, 2007
9. INCOME TAXES
The following is a geographical breakdown of income before the provision for income taxes:
Year Ended May 31,
(in millions) 2007 2006 2005
Domestic $ 3,302 $ 2,727 $ 1,956
Foreign 2,684 2,083 2,095
Total $ 5,986 $ 4,810 $ 4,051
The provision for income taxes consists of the following:
Year Ended May 31,
(Dollars in millions) 2007 2006 2005
Current provision:
Federal $ 864 $ 938 $ 624
State 147 97 135
Foreign 757 434 472
Total current provision 1,768 1,469 1,231
Deferred provision (benefit):
Federal 45 (35) (11)
State 4 8 (24)
Foreign (105) (13) (31)
Total deferred benefit (56) (40) (66)
Total provision for income taxes $ 1,712 $ 1,429 $ 1,165
Effective income tax rate 28.6% 29.7% 28.8%
The provision for income taxes differs from the amount computed by applying the federal statutory rate to our
income before provision for income taxes as follows:
Year Ended May 31,
(in millions) 2007 2006 2005
Tax provision at statutory rate $ 2,095 $ 1,684 $ 1,418
Foreign earnings at other than United States rates (580) (426) (380)
State tax expense, net of federal benefit 98 68 66
Dividend pursuant to American Jobs Creation Act of 2004 — — 121
Settlement of audits and expiration of statutes, net (29) — (131)
Other 128 103 71
Provision for income taxes $ 1,712 $ 1,429 $ 1,165
96
Source: ORACLE CORP, 10-K, June 29, 2007 Powered by Morningstar® Document Research℠