Harman Kardon 2007 Annual Report Download - page 68

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55
Note 10 - Income Taxes
The tax provisions and analysis of effective income tax rates are comprised of the following items:
Years
Ended June 30,
($000s omitted) 2007 2006 2005
Provision for Federal income taxes before credits at
statutory rate $
133,772 131,665 117,368
State income taxes
260
211
984
Difference between Federal statutory rate and
foreign effective rate
(1,305)
(2,401)
(8,551)
Dividend repatriation
---
3,350
---
IRS settlement
---
(1,081)
---
Permanent differences
(330)
(524)
(4,224)
Tax benefit from export sales
(1,338)
(2,186)
(2,116)
Change in valuation allowance
---
61
544
Change in other tax liabilities
(1,712)
(2,611)
(2,210)
Reduction in deferred asset due to tax rate changes in
foreign jurisdiction
---
---
3,429
Difference between Federal and financial accounting
for incentive stock option grants
432
853
895
Federal income tax credits
(59,750)
(5,168)
(3,600)
Other
157
(292)
(30)
Total $
70,186
121,877
102,489
We recorded a net increase in the deferred tax asset for foreign income tax credits. Income tax expense
consists of the following:
Years Ended June 30,
($000s omitted)
2007
2006
2005
Current:
Federal
$
3,991
(3,692)
5,226
State
400
325
275
Foreign
107,818
134,610
104,658
112,209
131,243
110,159
Deferred:
Federal
(43,913)
(47,105)
(80,183)
State
---
---
709
Foreign
(8,566)
(7,754)
(
2
,
302
)
(52,479)
(54,859)
(81,776)
Charge in lieu o
f taxes attributable to tax benefit
from employee stock options
10,456
45,493 74,106
Total
$
70,186
121,877
102,489
Deferred taxes are recorded based upon differences between the financial statement and tax basis of assets
and liabilities and available tax loss and credit carryforwards.