Apple 2007 Annual Report Download - page 78

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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 $2.2 billion, $1.5 billion, and $922 million in 2007, 2006, and
2005, respectively. As of September 29, 2007, $6.5 billion of the Company's cash, cash equivalents, and short-term investments were 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 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 $2.4 billion 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.
74
2007
2006
2005
Federal:
Current
$
1,219
$
619
$
305
Deferred
85
56
144
1,304
675
449
State:
Current
112
56
66
Deferred
9
14
(91
)
121
70
(25
)
Foreign:
Current
103
101
59
Deferred
(16
)
(17
)
(3
)
87
84
56
Provision for income taxes
$
1,512
$
829
$
480