Tyson Foods 2000 Annual Report Download - page 44

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
TYSON FOODS, INC. 2000 ANNUAL REPORT
NOTE 14: INCOME TAXES
Detail of the provision for income taxes consists of:
in millions
2000 1999 1998
Federal $78 $121 $ 50
State 58(4)
$83 $129 $ 46
Current $36 $143 $ 81
Deferred 47 (14) (35)
$83 $129 $ 46
The reasons for the difference between the effective
income tax rate and the statutory U.S. federal income tax
rate are as follows:
2000 1999 1998
U.S. federal income tax rate 35.0% 35.0% 35.0%
Amortization of excess
of investments over
net assets acquired 4.3 5.3 23.6
State income taxes (benefit) 1.4 1.6 (3.8)
Foreign (benefit) losses (5.2) (6.3) 10.9
Other 0.1 (0.7) (1.0)
35.6% 34.9% 64.7%
The Company follows the liability method in accounting
for deferred income taxes which provides that deferred tax
liabilities are recorded at current tax rates based on the
difference between the tax basis of assets and liabilities and
their carrying amounts for financial reporting purposes
referred to as temporary differences.
The tax effects of major items recorded as deferred tax
assets and liabilities are:
in millions
2000 1999
Deferred tax Deferred tax
Assets Liabilities Assets Liabilities
Property, plant
and equipment $ 5 $200 $ – $238
Suspended taxes
from conversion
to accrual method – 121 – 128
Inventory 291 240
Employee benefits 25 9 31 7
All other 26 82 53 71
$58 $503 $86 $484
Net deferred
tax liability $445 $398
Net deferred tax liabilities are included in other current
liabilities and deferred income taxes on the Consolidated
Balance Sheets.
The suspended taxes from conversion to accrual method
represents the 1987 change from the cash to accrual method of
accounting and is currently being paid down over 20 years
through 2017.
42