Ford 2004 Annual Report Download - page 66

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6 4
NOTES TO THE FINANCIAL STATEMENTS
The following table illustrates the effect on net income and earnings per share had the fair value method been applied to all
unvested outstanding stock option awards in each year (in millions):
2004 2003 2002
Income/(loss) attributable to Common and Class B
Stock after Preferred Stock dividends, as reported $ 3,487 $ 495 $ (995)
Add: Employee stock option expense included in
reported net income, net of related tax effects 77 112 -
Deduct: Total employee stock option expense
determined under fair value method for all
awards, net of related tax effects (77) (112) (179)
Pro forma net income/(loss) $ 3,487 $ 495 $ (1,174)
Amounts per share:
Basic – as reported $ 1.91 $ 0.27 $ (0.55)
Basic – pro forma 1.91 0.27 (0.65)
Diluted – as reported $ 1.73 $ 0.27 $ (0.54)
Diluted – pro forma 1.73 0.27 (0.64)
NOTE 3. INCOME TAXES
Components of income taxes, excluding discontinued operations, cumulative effects of changes in accounting principles and
equity in net results of affiliated companies accounted for after-tax, are as follows:
2004 2003 2002
Income/(loss) before income taxes (in millions)
U.S. $ 3,099 $ (246) $ 1,211
Non-U.S. 1,501 1,501 (67)
Total $ 4,600 $ 1,255 $ 1,144
Provision for income taxes (in millions)
Current:
Federal $ (119) $ (149) $ (423)
Non-U.S. 1,038 653 547
State and local (148) 32 -
Total Current 771 536 124
Deferred:
Federal 958 (209) 261
Non-U.S. (804) (141) (116)
State and local 12 (63) 73
Total Deferred 166 (413) 218
Total $ 937 $ 123 $ 342
Reconciliation of effective tax rate
U.S. statutory rate 35 % 35 % 35 %
Non-U.S. income taxes (2) (2) (3)
State and local income taxes 1 (2) 5
Deductible dividends (3) (4) (7)
General business credits (3) (12) (20)
Dispositions and restructurings - - 20
Prior year settlements & claims (6) - -
Other (2) (5) -
Effective rate 20 % 10 % 30 %
NOTE 2. Summary of Accounting Policies (Continued)