Apple 2007 Annual Report Download - page 79
Download and view the complete annual report
Please find page 79 of the 2007 Apple annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.-
1 -
2
-
3
-
4
-
5
-
6
-
7
-
8
-
9
-
10
-
11
-
12
-
13
-
14
-
15
-
16
-
17
-
18
-
19
-
20
-
21
-
22
-
23
-
24
-
25
-
26
-
27
-
28
-
29
-
30
-
31
-
32
-
33
-
34
-
35
-
36
-
37
-
38
-
39
-
40
-
41
-
42
-
43
-
44
-
45
-
46
-
47
-
48
-
49
-
50
-
51
-
52
-
53
-
54
-
55
-
56
-
57
-
58
-
59
-
60
-
61
-
62
-
63
-
64
-
65
-
66
-
67
-
68
-
69 -
70 -
71 -
72 -
73 -
74 -
75 -
76 -
77 -
78 -
79 -
80 -
81 -
82 -
83 -
84 -
85 -
86 -
87 -
88 -
89 -
90
-
91
-
92
-
93
-
94
-
95
-
96
-
97
-
98
-
99
-
100
-
101
-
102
-
103
-
104
-
105
-
106
-
107
-
108
-
109
-
110
-
111
-
112
-
113
-
114
-
115
-
116
-
117
-
118
-
119
-
120
-
121
-
122
-
123
-
124
-
125
-
126
-
127
-
128
-
129
-
130
-
131
-
132
-
133
-
134
-
135
-
136
-
137
-
138
-
139
-
140
-
141
-
142
-
143
-
144
-
145
-
146
-
147
-
148
-
149
-
150
-
151
-
152
-
153
-
154
-
155
-
156
-
157
-
158
-
159
-
160
-
161
-
162
-
163
-
164
-
165
-
166
-
167
-
168
 |
 |
As of September 29, 2007 and September 30, 2006, the significant components of the Company's deferred tax assets and liabilities were (in
millions):
As of September 29, 2007, the Company has tax loss and credit carryforwards in the tax effected amount of $8 million. As of September 29,
2007 and September 30, 2006, a valuation allowance of $5 million was recorded against the deferred tax asset for the benefits of state operating
losses that may not be realized. Management believes it is more likely than not that forecasted income, including income that may be generated
as a result of certain tax planning strategies, together with the tax effects of the deferred tax liabilities, will be sufficient to fully recover the
remaining deferred tax assets.
A reconciliation of the provision for income taxes, with the amount computed by applying the statutory federal income tax rate (35% in 2007,
2006, and 2005) to income before provision for income taxes, is as follows (in millions):
The Company's income taxes payable have been reduced by the tax benefits from employee stock options. The Company receives an income tax
benefit calculated as the difference between the fair market value of the stock issued at the time of the exercise and the option price, tax effected.
The net tax benefits from employee stock option transactions were $398 million, $419 million, and $428 million in 2007, 2006, and 2005,
respectively, and were reflected as an increase to common stock in the Consolidated Statements of Shareholders' Equity.
75
2007
2006
Deferred tax assets:
Accrued liabilities and other reserves
$
679
$
485
Tax losses and credits
8
55
Basis of capital assets and investments
146
124
Accounts receivable and inventory reserves
64
45
Other
161
30
Total deferred tax assets
1,058
739
Less valuation allowance
5
5
Net deferred tax assets
1,053
734
Deferred tax liabilities:
Unremitted earnings of subsidiaries
803
514
Total deferred tax liabilities
803
514
Net deferred tax asset
$
250
$
220
2007
2006
2005
Computed expected tax
$
1,753
$
987
$
633
State taxes, net of federal effect
140
86
(19
)
Indefinitely invested earnings of foreign subsidiaries
(297
)
(224
)
(98
)
Nondeductible executive compensation
6
11
14
Research and development credit, net
(54
)
(12
)
(26
)
Other items
(36
)
(19
)
(24
)
Provision for income taxes
$
1,512
$
829
$
480
Effective tax rate
30
%
29
%
27
%