Amgen 2002 Annual Report Download - page 59

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Page 57
AMGEN 2002 ANNUAL REPORT
Note 5. Income taxes
The provision for income taxes includes the following
(in millions):
Years ended December 31, 2002 2001 2000
Current provision:
Federal (including U.S.
possessions) $457.0 $ 625.1 $475.3
State 15.9 78.3 47.5
Foreign 59.8 11.5 6.4
Total current provision 532.7 714.9 529.2
Deferred provision (benefit):
Federal (including U.S.
possessions) 146.1 (104.3) 9.6
State 28.6 (44.0) (3.0)
Total deferred provision
(benefit) 174.7 (148.3) 6.6
$707.4 $ 566.6 $535.8
Deferred income taxes reflect the net tax effects of net
operating loss and credit carryforwards and temporary dif-
ferences between the carrying amounts of assets and lia-
bilities for financial reporting purposes and the amounts used
for income tax purposes. Significant components of the
Company’s deferred tax assets and liabilities are as follows
(in millions):
December 31, 2002 2001
Deferred tax assets:
Acquired net operating loss and
credit carryforwards $ 246.0 $ 45.4
Fixed assets 215.3 29.3
Expenses capitalized for tax purposes 83.3 91.9
Expense accruals 82.7 105.2
Credit carryforwards 40.7 39.4
Other 36.2 28.8
Total deferred tax assets 704.2 340.0
Valuation allowance (22.6) (19.6)
Net deferred tax assets 681.6 320.4
Deferred tax liabilities:
Acquired intangibles (1,817.4) —
Foreign operations (106.7) (1.0)
Purchase of technology rights (62.6) (85.9)
Marketable securities and investments (56.5) (70.4)
Other (39.8) (7.4)
Total deferred tax liabilities (2,083.0) (164.7)
$(1,401.4) $ 155.7
At December 31, 2002, the Company had operating
loss carryforwards of $532.5 million available to reduce
future federal taxable income which begin expiring in 2008.
The Company also had $59.6 million of credit carryfor-
wards against which a partial valuation allowance was estab-
lished. These operating loss and credit carryforwards relate
to the acquisition of companies. In addition, at December
31, 2002, the Company had $40.0 million of state research
and experimentation tax credit carryforward, which has no
expiration date.
The Company recorded gross deferred tax assets of
$410.9 million and gross deferred tax liabilities of $1.8
billion as a result of the Immunex acquisition. The gross
deferred tax assets were composed primarily of net operat-
ing loss and tax credit carryforwards and other temporary
differences. The gross deferred tax liabilities were com-
posed primarily of basis differences related to purchased
identifiable intangible assets.