Costco 2002 Annual Report Download - page 40

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Note 6—Income Taxes
The provisions for income taxes for fiscal 2002, 2001 and 2000 are as follows:
2002 2001 2000
Federal:
Current .............................................. $331,455 $285,460 $290,995
Deferred ............................................. 5,263 1,102 2,894
Total federal ........................................ 336,718 286,562 293,889
State:
Current .............................................. 48,256 55,484 57,753
Deferred ............................................. 4,269 (415) 2,072
Total state .......................................... 52,525 55,069 59,825
Foreign:
Current .............................................. 46,197 19,161 64,210
Deferred ............................................. 2,761 40,600 3,034
Total foreign ........................................ 48,958 59,761 67,244
Total provision for income taxes ............................ $438,201 $401,392 $420,958
In the fourth quarter of fiscal 2002 the Company adjusted the annual effective tax rate used in calculating
the tax provision from 40% to 38.5%, resulting in the reduction in the income tax provision in the fourth quarter
of $11,315.
Reconciliation between the statutory tax rate and the effective rate for fiscal 2002, 2001 and 2000 is as
follows:
2002 2001 2000
Federal taxes at statutory rate ............... $398,364 35.00% $351,218 35.00% $368,338 35.00%
State taxes, net ........................... 34,145 3.00 35,824 3.57 40,202 3.82
Foreign taxes, net ........................ 2,732 0.24 10,938 1.09 10,221 0.97
Other .................................. 2,960 0.26 3,412 0.34 2,197 0.21
Provision at effective tax rate ............... $438,201 38.50% $401,392 40.00% $420,958 40.00%
The components of the deferred tax assets and liabilities are as follows:
September 1,
2002
September 2,
2001
Accrued liabilities ...................................... $151,520 $136,987
Deferred membership fees ................................ 137,231 111,391
Other ................................................ 30,271 17,776
Total deferred tax assets ............................... 319,022 266,154
Property and equipment .................................. 175,344 127,243
Merchandise inventories ................................. 51,951 40,601
Other ................................................ 46,686 40,976
Total deferred tax liabilities ............................ 273,981 208,820
Net deferred tax assets ................................... $ 45,041 $ 57,334
The deferred tax accounts at September 1, 2002 and September 2, 2001 include current deferred income tax
assets of $173,602 and $160,662, respectively, and non-current deferred income tax liabilities of $128,561 and
$103,328, respectively. Current deferred income tax assets are included in other current assets.
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