Note 10: Income Taxes
The components of earnings before income taxes and the related provision for U.S. and other income taxes were as follows:
|
| (in millions) |
2000 |
|
1999 |
|
1998 |
|
| |
|
|
|
|
|
|
|
|
| Earnings before income taxes |
|
|
|
|
|
|
|
|
| U.S. |
$ |
1,294 |
|
$ |
1,398 |
|
$ |
1,578 |
| Outside the U.S. |
|
838 |
|
|
711 |
|
|
528 |
|
| Total |
$ |
2,132 |
|
$ |
2,109 |
|
$ |
2,106 |
|
| U.S. income taxes |
|
|
|
|
|
|
|
|
| Current provision |
$ |
145 |
|
$ |
185 |
|
$ |
351 |
| Deferred provision |
|
225 |
|
|
215 |
|
|
136 |
| Income taxes outside the U.S. |
|
|
|
|
|
|
|
|
| Current provision |
|
268 |
|
|
225 |
|
|
113 |
| Deferred provision |
|
37 |
|
|
23 |
|
|
61 |
| State and other income taxes |
|
|
|
|
|
|
|
|
| Current provision |
|
35 |
|
|
60 |
|
|
50 |
| Deferred provision |
|
15 |
|
|
9 |
|
|
5 |
|
| Total |
$ |
725 |
|
$ |
717 |
|
$ |
716 |
|
|
|
The differences between the provision for income taxes and income taxes computed using the U.S. federal income tax rate were as follows:
|
| (in millions) |
2000 |
|
1999 |
|
1998 |
|
| |
| Amount computed using the statutory rate |
| Increase (reduction) in taxes resulting from: |
$ |
746 |
|
$ |
738 |
|
$ |
737 |
| State and other income taxes |
|
33 |
|
|
45 |
|
|
38 |
| Goodwill amortization |
|
40 |
|
|
36 |
|
|
28 |
| Export sales and manufacturing credits |
|
(48) |
|
|
(45) |
|
|
(39) |
| Operations outside the U.S. |
|
(79) |
|
|
(36) |
|
|
(15) |
| Other, net |
|
33 |
|
|
(21) |
|
|
(33) |
|
| Provision for income taxes |
$ |
725 |
|
$ |
717 |
|
$ |
716 |
|
|
|
The significant components of deferred tax assets and liabilities were as follows:
|
| (in millions) |
2000 |
|
1999 |
|
| |
| Deferred tax payments |
| Postemployment obligations |
$ |
916 |
|
$ |
992 |
| Restructuring programs |
|
- |
|
|
74 |
| Inventories |
|
139 |
|
|
153 |
| Tax loss carryforwards |
|
103 |
|
|
94 |
| Other |
|
884 |
|
|
905 |
|
| |
|
2,042 |
|
|
2,218 |
| Valuation allowance |
|
(103) |
|
|
(94) |
|
| Total |
|
1,939 |
|
|
2,124 |
|
| Deferred tax liabilities |
|
|
|
|
|
| Depreciation |
|
555 |
|
|
527 |
| Leasing |
|
225 |
|
|
260 |
| Other |
|
591 |
|
|
534 |
|
| Total |
$ |
1,371 |
|
$ |
1,321 |
|
|
|
The valuation allowance is primarily attributable to certain net operating loss carryforwards outside the U.S. A majority of the net operating loss carryforwards are subject to a five-year expiration period.
Retained earnings of subsidiary companies outside the U.S. were approximately $1,574 million and $1,439 million at December 31, 2000 and 1999, respectively.
Retained earnings at December 31, 2000 are considered to be reinvested indefinitely.
If remitted, they would be substantially free of additional tax.
It is not practicable to determine the deferred tax liability for temporary differences related to these retained earnings.
|
