Notes
The provision for income taxes is composed of the following charges (benefits):
| |
|
2003 |
|
|
2002 |
|
|
2001 |
|
 |
| Current: |
|
|
|
|
|
|
|
|
|
| Domestic: |
|
|
|
|
|
|
|
|
|
| Federal |
$ |
103,469 |
|
$ |
33,016 |
|
$ |
49,053 |
|
| State and local, including |
|
|
|
|
|
|
|
|
|
| Puerto Rico |
|
3,880 |
|
|
7,900 |
|
|
7,728 |
|
| Foreign |
|
56,330 |
|
|
50,489 |
|
|
44,167 |
|
|
| |
|
163,679 |
|
|
91,405 |
|
|
100,948 |
|
|
| Deferred: |
|
|
|
|
|
|
|
|
|
| Domestic |
|
(741 |
) |
|
57,651 |
|
|
29,342 |
|
| Foreign |
|
(288 |
) |
|
(449 |
) |
|
8,058 |
|
|
| |
|
(1,029 |
) |
|
57,202 |
|
|
37,400 |
|
|
| |
$ |
162,650 |
|
$ |
148,607 |
|
$ |
138,348 |
|
|
In accordance with SFAS No. 109, “Accounting for Income Taxes,” deferred tax assets and liabilities are netted on the balance sheet by separate tax jurisdictions. At September 30, 2003 and 2002, net current deferred tax assets of $85,068 and $71,362, respectively, were included in Prepaid expenses, deferred taxes and other. There were no net non-current deferred tax assets in 2003 and 2002. Net current deferred tax liabilities of $3,385 and $4,635, respectively, were included in Current Liabilities–Income taxes. Net non-current deferred tax liabilities of $91,088 and $77,249, respectively, were included in Deferred Income Taxes and Other. Deferred taxes are not provided on substantially all undistributed earnings of foreign subsidiaries. At September 30, 2003, the cumulative amount of such undistributed earnings approximated $1,798,581 against which substantial tax credits are available. Determining the tax liability that would arise if these earnings were remitted is not practicable.
Deferred income taxes at September 30 consisted of:
| |
2003 |
2002 |
|
| |
|
Assets |
|
|
Liabilities |
|
|
Assets |
|
|
Liabilities |
|
|
| Compensation and benefits |
$ |
149,470 |
|
$ |
— |
|
$ |
161,574 |
|
$ |
— |
|
| Property and equipment |
|
— |
|
|
136,633 |
|
|
— |
|
|
124,718 |
|
| Purchase acquisition adjustments |
|
— |
|
|
46,013 |
|
|
— |
|
|
70,656 |
|
| Other |
|
130,551 |
|
|
104,694 |
|
|
159,546 |
|
|
134,182 |
|
|
| |
|
280,021 |
|
|
287,340 |
|
|
321,120 |
|
|
329,556 |
|
| Valuation allowance |
|
(2,086 |
) |
|
— |
|
|
(2,086 |
) |
|
— |
|
|
| |
$ |
277,935 |
|
$ |
287,340 |
|
$ |
319,034 |
|
$ |
329,556 |
|
|
A reconciliation of the federal statutory tax rate to the Company’s effective tax rate follows:
| |
|
2003 |
|
|
2002 |
|
|
2001 |
|
|
| Federal statutory tax rate |
|
35.0 |
% |
|
35.0 |
% |
|
35.0 |
% |
| State and local income taxes, |
|
|
|
|
|
|
| net of federal tax benefit |
|
.4 |
|
|
1.2 |
|
|
.6 |
|
| Effect of foreign and Puerto Rican |
|
|
|
|
|
|
| income and foreign tax credits |
|
(8.5 |
) |
|
(9.3 |
) |
|
(8.2 |
) |
| Effect of Research, Empowerment |
|
|
|
|
|
|
| Zone, Foreign Sales Corporation/ |
|
|
|
|
|
|
| Extraterritorial Income tax benefits |
|
(3.0 |
) |
|
(2.2 |
) |
|
(3.0 |
) |
| Other, net |
|
(1.0 |
) |
|
(1.1 |
) |
|
(.4 |
) |
|
| |
|
22.9 |
% |
|
23.6 |
% |
|
24.0 |
% |
|
The approximate dollar and diluted per-share amounts of tax reductions related to tax holidays in various countries in which the Company does business were: 2003–$42,050 and $.16; 2002–$40,860 and $.15; and 2001–$43,275 and $.16. The tax holidays expire at various dates through 2018.
The Company made income tax payments, net of refunds, of $110,739 in 2003, $52,603 in 2002, and $53,498 in 2001.
The components of Income Before Income Taxes and Cumulative Effect of Change in Accounting Principle follow:
| |
|
2003 |
|
|
2002 |
|
|
2001 |
|
|
| Domestic, including |
|
|
|
|
|
|
|
|
|
|
| Puerto Rico |
$ |
334,806 |
|
$ |
336,596 |
|
$ |
340,073 |
|
| Foreign |
|
374,900 |
|
|
291,993 |
|
|
236,677 |
|
|
| |
$ |
709,706 |
|
$ |
628,589 |
|
$ |
576,750 |
|
|
|
