|
Note
10. Income Taxes
Income
before income taxes and equity in earnings of Henkel-Ecolab
consisted of:
| (thousands) |
2001 |
2000 |
1999 |
| Domestic
|
$249,026 |
$275,754 |
$232,684 |
| Foreign
|
40,719 |
42,780 |
34,554 |
| |
|
|
|
| Total |
$289,745 |
$318,534 |
$267,238 |
| |
|
|
|
The
provision for income taxes consisted of:
| (thousands) |
2001 |
2000 |
1999 |
| Federal
and state |
$107,055
|
$120,318
|
$106,582 |
| Foreign
|
13,303 |
20,781 |
7,090 |
|
|
|
|
| Currently
payable |
120,358
|
141,099
|
113,672 |
| Federal
and state |
(1,940) |
(8,930) |
(10,229) |
| Foreign
|
(1,010) |
(2,674) |
6,326 |
| |
|
|
|
| Deferred
|
(2,950) |
(11,604) |
(3,903) |
| |
|
|
|
| Provision
for income taxes |
$117,408
|
$129,495
|
$109,769 |
| |
|
|
|
The
company’s overall net deferred tax assets and deferred tax liabilities
were comprised of the following:
| December
31 (thousands) |
2001 |
2000 |
1999 |
| Deferred
tax assets |
|
|
|
Postretirement
health care
and pension benefits |
$
47,792 |
$ 43,089 |
$36,664 |
| Other
accrued liabilities |
55,758 |
55,608 |
46,024 |
| Loss
carryforwards |
18,679 |
4,337 |
2,145 |
| Other,
net |
17,552 |
10,923 |
14,401 |
| Valuation
allowance |
(1,462) |
(1,462) |
(1,462) |
| |
|
|
|
| Total
|
138,319 |
112 ,495 |
97,772 |
| |
|
|
|
| Deferred
tax liabilities |
|
|
|
Property,
plant and equipment
basis differences
|
40,956
|
31,183 |
27,001 |
| Intangible
assets |
26,381 |
|
|
| Other,
net |
5,403 |
3,835 |
4,479 |
| |
|
|
|
| Total |
72,740 |
35,018 |
31,480 |
| |
|
|
|
| Net
deferred tax assets |
$
65,579 |
$ 77,477 |
$66,292 |
| |
|
|
|
A
reconciliation of the statutory U.S. federal income tax rate
to the company’s effective income tax rate was:
| |
2001
|
2000
|
1999 |
| Statutory
U.S. rate |
35.0% |
35.0% |
35.0% |
| State
income taxes, net of federal benefit |
4.2 |
3.9 |
4.2 |
| Foreign
operations |
|
0.1 |
0.6 |
| Other,
net |
1.3 |
1.7 |
1.3 |
| |
|
|
|
| Effective
income tax rate |
40.5% |
40.7% |
41.1% |
| |
|
|
|
Cash
paid for income taxes was approximately $99 million in 2001,
$128 million in 2000 and $94 million in 1999.
As of December 31, 2001, undistributed earnings of international
subsidiaries, including Henkel-Ecolab, of approximately $220
million, were considered to have been reinvested indefinitely
and, accordingly, the company has not provided U.S. income taxes
on such earnings. If those earnings were remitted to the company,
applicable income taxes would be substantially offset by available
foreign tax credits.
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