Apple 2004 Annual Report Download - page 90

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Note 6—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 $384 million, $250 million and $284 million in
2004, 2003, and 2002, respectively. As of September 25, 2004, approximately $3.2 billion of the Company's cash, cash equivalents, and short-
term investments are held by foreign subsidiaries and are generally based in U.S. dollar-denominated holdings. Amounts held by foreign
subsidiaries are generally subject to U.S. income taxation on repatriation to the U.S. 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 U.S. U.S. income taxes have not been provided on a
cumulative total of $972 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.
86
2004
2003
2002
Federal:
Current
$
34
$
18
$
12
Deferred
56
(7
)
(32
)
90
11
(20
)
State:
Current
5
4
3
Deferred
(18
)
(11
)
6
(13
)
(7
)
9
Foreign:
Current
46
21
29
Deferred
(16
)
(1
)
4
30
20
33
Provision for income taxes
$
107
$
24
$
22