Pepsi 2006 Annual Report Download - page 66

2006 2005 2004
Income before income taxes — continuing operations
U.S. ............................................................................................................................. $3,844 $3,175 $2,946
Foreign ....................................................................................................................... 3,145 3,207 2,600
$6,989 $6,382 $5,546
Provision for income taxes — continuing operations
Current: U.S. Federal.............................................................................................. $ 776 $1,638 $1,030
Foreign..................................................................................................... 569 426 256
State ......................................................................................................... 56 118 69
1,401 2,182 1,355
Deferred: U.S. Federal.............................................................................................. (31) 137 11
Foreign..................................................................................................... (16) (26) 5
State ......................................................................................................... (7) 11 1
(54) 122 17
$1,347 $2,304 $1,372
Tax rate reconciliation — continuing operations
U.S. Federal statutory tax rate .................................................................................. 35.0% 35.0% 35.0%
State income tax, net of U.S. Federal tax benefit.................................................... 0.5 1.4 0.8
Taxes on AJCA repatriation....................................................................................... –7.0 –
Lower taxes on foreign results.................................................................................. (6.5) (6.5) (5.4)
Settlement of prior years’ audit................................................................................ –– (4.8)
2006 Tax Adjustments................................................................................................ (8.6) ––
Other, net ................................................................................................................... (1.1) (0.8) (0.9)
Annual tax rate .......................................................................................................... 19.3% 36.1% 24.7%
Deferred tax liabilities
Investments in noncontrolled affiliates.................................................................... $1,103 $ 993
Property, plant and equipment................................................................................. 784 772
Pension benefits......................................................................................................... –863
Intangible assets other than nondeductible goodwill ............................................ 169 135
Zero coupon notes..................................................................................................... 27 35
Other .......................................................................................................................... 221 169
Gross deferred tax liabilities ..................................................................................... 2,304 2,967
Deferred tax assets
Net carryforwards ...................................................................................................... 667 608
Stock-based compensation........................................................................................ 443 426
Retiree medical benefits............................................................................................ 541 400
Other employee-related benefits ............................................................................. 342 342
Pension benefits......................................................................................................... 38 –
Other .......................................................................................................................... 592 520
Gross deferred tax assets........................................................................................... 2,623 2,296
Valuation allowances................................................................................................. (624) (532)
Deferred tax assets, net............................................................................................. 1,999 1,764
Net deferred tax liabilities ........................................................................................ $ 305 $1,203
Deferred taxes included within:
Assets:
Prepaid expenses and other current assets........................................................... $223 $231
Liabilities:
Deferred income taxes ........................................................................................... $528 $1,434
Analysis of valuation allowances
Balance, beginning of year ....................................................................................... $532 $564 $438
Provision/(benefit) .................................................................................................. 71 (28) 118
Other additions/(deductions)................................................................................. 21 (4) 8
Balance, end of year .................................................................................................. $624 $532 $564
Note 5 — Income Taxes
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