Note 15

INCOME TAXES

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

(in millions)
Year Ended	Feb 25, 2000	Feb 26, 1999	Feb 27, 1998
Current income taxes:
Federal	$ 98.9)	$ 115.7)	$ 115.7)
State and local	4.5)	9.0)	9.5)
Foreign	19.2)	2.9)	10.4)
	122.6)	127.6)	135.6)
Deferred income taxes:
Federal	(4.6)	(3.1)	(0.8)
State and local	(0.1)	(0.3)	(0.3)
Foreign	(2.4)	0.7	(3.6)
	(7.1)	(2.7)	(4.7)
	$ 115.5)	$ 124.9)	$ 130.9)

The company has not provided for U.S. income taxes on undistributed earnings of foreign subsidiaries totaling $130.8 million at February 25, 2000, as foreign subsidiary undistributed earnings are considered permanently invested in those businesses. These amounts would be subject to possible U.S. taxation only if remitted as dividends. Foreign withholding taxes could be payable upon remittance of these earnings. Subject to certain limitations, the withholding taxes would then be available for use as credit against the U.S. tax liability. However, the determination of the hypothetical amount of unrecognized deferred U.S. taxes on undistributed earnings of foreign entities is not practicable.

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:

(in millions)
		Feb 25, 2000	Feb 26, 1999
Deferred income tax assets:
Employee benefit       plan obligations		$ 112.2)	$ 107.9)
Reserves and allowances		50.9)	29.2)
Foreign losses		3.6)	5.8)
Other		7.1)	12.3)
Total deferred income tax assets		173.8)	155.2)
Deferred income tax liabilities:
Property and equipment		(45.4)	(39.6)
Intangible assets		(24.0)	—
Net leased assets		(12.1)	(6.4)
Net deferred income tax assets		92.3)	109.2)
Current portion		78.1)	68.7)
Non-current portion		$ 14.2)	$ 40.5)

The Company has recorded a deferred tax asset as of February 25, 2000 of $3.6 million reflecting the benefit of foreign operating loss carry-forwards that expire at various dates through 2007. 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:

Year Ended	Feb 25, 2000	Feb 26, 1999	Feb 27, 1998
Statutory federal     income tax rate	35.0%)	35.0%)	35.0%)
State and local     income taxes	1.6)%	2.5)%	2.7)%
Tax exempt interest	—	—	(0.2)%
Goodwill and intangible     asset amortization     and write-offs	1.0)%	0.3)%	0.2)%
Research and     development credit	(0.3)%	(0.4)%	(0.6)%
Other	1.7)%	(0.4)%	1.4)%
Effective income tax rate	39.0%)	37.0%)	38.5%)

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 $123.2 million, $59.3 million and $116.0 million during 2000, 1999 and 1998, respectively.