Intel 2010 Annual Report Download - page 127

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Table of Contents
INTEL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note 28: Taxes
Income before taxes and the provision for taxes consisted of the following:
The difference between the tax provision at the statutory federal income tax rate and the tax provision as a percentage of
income before income taxes (effective tax rate) was as follows:
Income in certain foreign countries is fully exempt from income taxes for a limited period of time due to eligible activities and
certain capital investment actions. These full tax exemptions expire at various dates through 2020; however, the exemptions in
certain countries are eligible for renewal. In 2010, the tax benefit attributable to tax holidays was $256 million with a $0.04
impact on diluted earnings per share. The tax holiday benefits for 2009 and 2008 were $115 million ($0.02 per diluted share)
and $67 million ($0.01 per diluted share), respectively.
During 2010, net income tax benefits attributable to equity-based compensation transactions that were allocated to
stockholders’ equity totaled $40 million (net deficiencies of $41 million in 2009 and net benefits of $8 million in 2008).
95
(Dollars in Millions)
2010
2009
2008
Income before taxes:
U.S.
$
13,926
$
3,229
$
6,117
Non
-
U.S.
2,119
2,475
1,569
Total income before taxes
$
16,045
$
5,704
$
7,686
Provision for taxes:
Current:
Federal
$
4,049
$
604
$
2,781
State
51
(2
)
(38
)
Non
-
U.S.
359
336
345
Total current provision for taxes
$
4,459
$
938
$
3,088
Deferred:
Federal
$
187
$
355
$
(668
)
Other
(65
)
(26
)
Total deferred provision for taxes
$
122
$
397
$
(694
)
Total provision for taxes
$
4,581
$
1,335
$
2,394
Effective tax rate
28.6
%
23.4
%
31.1
%
(In Percentages)
2010
2009
2008
Statutory federal income tax rate
35.0
%
35.0
%
35.0
%
Increase (reduction) in rate resulting from:
Non
-
U.S.
income taxed at different rates
(3.4
)
(12.4
)
(4.2
)
European Commission fine
—
8.9
—
Settlements, effective settlements, and related remeasurements
(0.3
)
(6.4
)
(1.3
)
Research and development tax credits
(0.9
)
(2.0
)
(1.4
)
Domestic manufacturing deduction benefit
(2.1
)
(1.5
)
(1.7
)
Deferred tax asset valuation allowance
—
unrealized losses
(0.2
)
0.2
3.4
Other
0.5
1.6
1.3
Effective tax rate
28.6
%
23.4
%
31.1
%