Apple 2000 Annual Report Download - page 53

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 5--INCOME TAXES
The provision for income taxes consisted of the following (in millions):
The foreign provision for income taxes is based on foreign pretax earnings of approximately $1,019 million, $612 million, and $315 million in
2000, 1999, and 1998, respectively. A substantial portion of the Company's cash, cash equivalents, and short-term investments is held by
foreign subsidiaries and is generally based in U.S. dollar-
denominated holdings. Amounts held by foreign subsidiaries would be subject to U.S.
income taxation on repatriation to the United States. The Company's consolidated financial statements fully provide for any related tax liability
on amounts that may be repatriated, aside from undistributed earnings of certain of the Company's foreign subsidiaries that are intended to be
indefinitely reinvested in operations outside the United States. U.S. income taxes have not been provided on a cumulative total of $755 million
of such earnings. It is not practicable to determine the income tax liability that might be incurred if these earnings were to be distributed.
Deferred tax assets and liabilities reflect the effects of tax losses, credits, and the future income tax effects of temporary differences between
the consolidated financial statement carrying amounts of existing assets and liabilities and their respective tax bases and are measured using
enacted tax rates that apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.
50
2000 1999 1998
-------- -------- --------
Federal:
Current................................................. $ 9 $ 4 $--
Deferred................................................ 239 30 --
---- --- ---
248 34 --
---- --- ---
State:
Current................................................. -- -- --
Deferred................................................ 23 11 --
---- --- ---
23 11 --
---- --- ---
Foreign:
Current................................................. 37 33 11
Deferred................................................ (2) (3) 9
---- --- ---
35 30 20
---- --- ---
Provision for income taxes................................ $306 $75 $20
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