Sprint - Nextel 2006 Annual Report Download - page 126
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Note 12. Income Taxes
Income tax expense (benefit) allocated to continuing operations consists of the following:
2006 2005 2004
Year Ended December 31,
(in millions)
Current income tax expense (benefit)
Federal .................................................... $(99) $(395) $ (353)
State ...................................................... 119 67 (136)
Total current income tax expense (benefit) ............................ 20 (328) (489)
Deferred income tax expense (benefit)
Federal .................................................... 556 835 (717)
State ...................................................... (88) (37) (32)
Total deferred income tax expense (benefit) ........................... 468 798 (749)
Foreign income tax expense....................................... — — —
Total income tax expense (benefit).................................. $488 $470 $(1,238)
The differences that caused our effective income tax rates to vary from the 35% federal statutory rate for
income taxes related to continuing operations were as follows:
2006 2005 2004
Year Ended December 31,
(in millions)
Income tax expense (benefit) at the federal statutory rate ................. $519 $452 $(1,135)
Effect of:
State income taxes, net of federal income tax effect ................... 47 20 (109)
State law changes, net of federal income tax effect ................... (27) — —
Tax audit settlements.......................................... (42) — —
Other, net .................................................. (9) (2) 6
Income tax expense (benefit)...................................... $488 $470 $(1,238)
Effective income tax rate ........................................ 32.9% 36.4% 38.2%
F-49
SPRINT NEXTEL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)