Intel 2006 Annual Report Download - page 84

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Table of Contents
INTEL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note 12: Provision for Taxes
Income before taxes and the provision for taxes consisted of the following:
The difference between the tax provision at the statutory federal income tax rate and the tax provision attributable to income
before income taxes was as follows:
During 2006, the tax benefit realized for the tax deduction from option exercises and other awards totaled $139 million. The
tax benefit from employee equity incentive plans was $351 million for 2005 and $344 million for 2004.
The American Jobs Creation Act of 2004 (the Jobs Act) created a temporary incentive for U.S. corporations to repatriate
accumulated income earned abroad by providing an 85% dividends-received deduction for certain dividends from controlled
non-U.S. corporations. During 2005, the company’s Chief Executive Officer and Board of Directors approved a domestic
reinvestment plan, under which the company repatriated $6.2 billion in earnings outside the U.S. pursuant to the Jobs Act. The
company recorded additional tax expense in 2005 of approximately $265 million ($0.04 per common share, assuming dilution)
related to this decision to repatriate non-U.S. earnings.
73
(Dollars in Millions)
2006
2005
2004
Income before taxes:
U.S.
$
4,532
$
10,397
$
7,422
Non
-
U.S.
2,536
2,213
2,995
Total income before taxes
$
7,068
$
12,610
$
10,417
Provision for taxes:
Current:
Federal
$
1,997
$
3,546
$
2,787
State
15
289
(69
)
Non
-
U.S.
337
524
390
2,349
4,359
3,108
Deferred:
Federal
(305
)
(360
)
(128
)
Other
(20
)
(53
)
(79
)
(325
)
(413
)
(207
)
Total provision for taxes
$
2,024
$
3,946
$
2,901
Effective tax rate
28.6
%
31.3
%
27.8
%
(In Percentages)
2006
2005
2004
Statutory federal income tax rate
35.0
%
35.0
%
35.0
%
Increase (reduction) in rate resulting from:
State taxes, net of federal benefits
0.8
1.3
(0.4
)
Non
-
U.S.
income taxed at different rates
(4.3
)
(2.0
)
(2.5
)
Export sales benefit
(2.1
)
(2.8
)
(4.8
)
Repatriation of prior years
’
permanently reinvested earnings
—
1.8
—
Share
-
based compensation
0.7
—
—
Other
(1.5
)
(2.0
)
0.5
Income tax rate
28.6
%
31.3
%
27.8
%