|
Note 5. Income
Taxes
Earnings before
income taxes are comprised of the following:
| |
Dollar
amounts in millions |
1998
|
|
1997
|
|
1996
|
|
|
|
|
|
|
|
|
|
|
|
| |
Domestic
earnings
|
|
$
413
|
|
$
432
|
|
$
614
|
|
| |
Foreign
earnings
|
|
50
|
|
107
|
|
106
|
|
| |
|
|
|
$
463
|
|
$ 539
|
|
$
720
|
|
| |
|
|
|
|
|
|
|
|
|
| |
Provisions
for income taxes include the following:
|
|
|
|
|
|
|
|
| |
Dollar
amounts in millions |
1998
|
|
1997
|
|
1996
|
|
| |
Federal:
|
|
|
|
|
|
|
|
| |
|
Current |
|
$
(7)
|
|
$
65
|
|
$
41
|
|
| |
|
Deferred |
|
138
|
|
86
|
|
166
|
|
| |
|
|
|
131
|
|
151
|
|
207
|
|
| |
State:
|
|
|
|
|
|
|
|
| |
|
Current |
|
8
|
|
6
|
|
2
|
|
| |
|
Deferred |
|
10
|
|
3
|
|
16
|
|
| |
|
|
|
18
|
|
9
|
|
18
|
|
| |
Foreign:
|
|
|
|
|
|
|
|
| |
|
Current |
|
8
|
|
45
|
|
33
|
|
| |
|
Deferred |
|
12
|
|
(8)
|
|
(1)
|
|
| |
|
|
|
20
|
|
37
|
|
32
|
|
| |
|
|
|
$
169
|
|
$
197
|
|
$
257
|
|
| |
|
|
|
|
|
|
|
|
|
|
| |
A
reconciliation between the federal statutory tax rate
and the company's effective tax rate follows: |
|
| |
Dollar
amounts in millions |
1998
|
|
1997
|
|
1996
|
|
| |
|
|
|
|
|
|
|
|
| |
Statutory
tax on income |
|
35.0%
|
|
35.0%
|
|
35.0%
|
|
| |
State
income taxes, net of federal tax benefit |
|
2.8
|
|
1.3
|
|
2.4
|
|
| |
All
other, net |
|
(1.3)
|
|
.2
|
|
(1.7)
|
|
| |
Effective
income tax rate |
|
36.5%
|
|
36.5%
|
|
35.7%
|
|
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
The net deferred
income tax (liabilities) assets include the following components:
| |
Dollar
amounts in millions |
|
|
|
December
27, 1998
|
December
28, 1997
|
| |
|
|
|
|
| |
Current
(included in prepaid expenses) |
|
$
98
|
$
90
|
| |
Noncurrent
|
|
(1,404)
|
(1,418)
|
| |
Real
estate and related assets (included
in other assets) |
|
16
|
28
|
| |
Total |
|
$
(1,290)
|
$
(1,300)
|
| |
|
|
|
|
| |
The
deferred tax (liabilities) assets are comprised of the following:
|
| |
Dollar
amounts in millions |
|
|
|
| |
|
|
December
27, 1998
|
December
28, 1997
|
| |
|
|
|
|
| |
Depreciation |
|
$
(1,260)
|
$
(1,352)
|
| |
Depletion |
|
(207)
|
(176)
|
| |
Capitalized
interest and taxes real estate development |
|
(68)
|
(71)
|
| |
Other |
|
(240)
|
(189)
|
| |
Total
deferred tax (liabilities) |
|
(1,775)
|
(1,788)
|
| |
Pension
and other postretirement benefits |
|
100
|
128
|
| |
Charges
for impairment of long-lived assets |
|
39
|
43
|
| |
Alternative
minimum tax credit carry forward |
|
69
|
63
|
| |
Other |
|
277
|
254
|
| |
Total
deferred tax assets |
|
485
|
488
|
| |
|
|
$
(1,290)
|
$
(1,300)
|
| |
|
|
|
|
As of December
27, 1998, the company has available approximately $69 million of
alternative minimum tax credit carry forward, which does not expire,
and foreign tax credit carry forwards of $1 million, $1 million
and $1 million expiring in 2001, 2002 and 2003, respectively.
The company
intends to reinvest undistributed earnings of certain foreign subsidiaries;
therefore, no U.S. taxes have been provided. These earnings totaled
approximately $789 million at the end of 1998. While it is not practicable
to determine the income tax liability that would result from repatriation,
it is estimated that withholding taxes payable upon repatriation
would approximate $40 million. >
|
|
