Nike 2006 Annual Report Download - page 60

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NIKE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
The provision for income taxes is as follows:
Year Ended May 31,
2006 2005 2004
(In millions)
Current:
United States
Federal ........................................... $359.0 $279.6 $185.3
State ............................................. 60.6 50.7 43.3
Foreign ............................................... 356.0 292.5 266.8
775.6 622.8 495.4
Deferred:
United States
Federal ........................................... (4.2) 21.9 3.9
State ............................................. (6.8) (5.3) 2.4
Foreign ............................................... (15.0) 8.8 2.7
(26.0) 25.4 9.0
$749.6 $648.2 $504.4
Deferred tax (assets) and liabilities are comprised of the following:
May 31,
2006 2005
(In millions)
Deferred tax assets:
Allowance for doubtful accounts .................................. $ (10.9) $ (15.7)
Inventories ................................................... (43.9) (29.7)
Sales return reserves ............................................ (39.4) (31.5)
Deferred compensation .......................................... (110.6) (89.2)
Reserves and accrued liabilities ................................... (50.6) (20.2)
Property, plant, and equipment .................................... (28.6) (26.4)
Foreign loss carryforwards ....................................... (29.2) (28.9)
Foreign tax credit carryforwards .................................. (9.5) (34.4)
Hedges ...................................................... (25.5) (3.7)
Other ........................................................ (29.1) (22.7)
Total deferred tax assets ..................................... (377.3) (302.4)
Valuation allowance ................................................ 36.6 29.1
Total deferred tax assets after valuation allowance ................ (340.7) (273.3)
Deferred tax liabilities:
Undistributed earnings of foreign subsidiaries ........................ 135.3 130.0
Property, plant and equipment .................................... 91.4 94.9
Intangibles ................................................... 96.8 101.6
Hedges ...................................................... 7.8 4.0
Other ........................................................ 12.5 13.1
Total deferred tax liabilities .................................. 343.8 343.6
Net deferred tax liability ............................................. $ 3.1 $ 70.3
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