Note 15

INCOME TAXES

The provision for income taxes on income before equity in net income of joint ventures and dealer transitions consists of:

Undistributed earnings of foreign joint ventures and subsidiaries are not material.

Temporary differences between the financial statement carrying amounts and tax bases of assets and liabilities that give rise to significant portions of deferred income taxes relate to the following:

(1) Certain prior year amounts have been reclassified to conform with the current year presentation.

The Company has recorded a deferred tax asset as of February 26, 1999 of $5.8 million reflecting the benefit of foreign operating loss carry-forwards that expire over the next five years. Realization is dependent on future taxable income of the related foreign operations and tax planning strategies available to the Company. Although realization is not assured, management believes it is more likely than not that deferred tax assets will be realized.

The effective income tax rate on income before equity in net income of joint ventures and dealer transitions varied from the statutory federal income tax rate as set forth in the following table:

During 1999, the provision for income taxes benefited from the favorable resolution of income tax litigation dating back to 1989, primarily related to investment tax credits and accelerated depreciation on the Company's Corporate Development Center. The resolution of these tax matters contributed to a reduced effective tax rate for 1999 and resulted in interest income of $5.8 million.

The Company made income tax payments of $59.3 million, $116.0 million and $44.0 million during 1999, 1998 and 1997, respectively.