GILD » Topics » Provision for Income Taxes

This excerpt taken from the GILD 10-Q filed May 7, 2009.

Provision for Income Taxes

Our income tax rate was 26.3% for the three months ended March 31, 2009, compared to 27.9% for the same period in 2008. Our provision for income taxes for the three months ended March 31, 2009 was $209.2 million compared to $188.3 million for the same period in 2008. The tax rate for the three months ended March 31, 2009 differed from the U.S. federal statutory rate of 35% due primarily to tax credits, certain operating earnings from non-U.S. subsidiaries that are considered indefinitely invested outside the United States, partially offset by state taxes. We do not provide for U.S. income taxes on undistributed earnings of our foreign operations that are intended to be permanently reinvested.

As a result of the retrospective application of FSP APB 14-1, we reflected a decrease in our provision for income taxes of $5.1 million for the three months ended March 31, 2008.

This excerpt taken from the GILD 10-K filed Feb 27, 2009.

Provision for Income Taxes

Our provision for income taxes was $723.3 million, $655.0 million and $551.8 million in 2008, 2007 and 2006, respectively. The 2008 effective tax rate of 26.5% differs from the U.S. federal statutory rate of 35% due primarily to tax credits, the resolution of certain tax positions with taxing authorities and certain operating earnings from non-U.S. subsidiaries that are considered indefinitely invested outside the United States, offset by state taxes.

The 2007 effective tax rate of 28.9% differs from the U.S. federal statutory rate of 35% due primarily to tax credits and certain operating earnings from non-U.S. subsidiaries that are considered indefinitely invested outside the United States, offset by state taxes.

Included in our operating income in 2006 were pre-tax charges of $335.6 million and $2.06 billion for the purchased IPR&D expenses associated with our Corus and Myogen acquisitions, respectively. We did not record any income tax benefit related to the purchased IPR&D expenses as such amounts are non-deductible. The 2006 effective tax rate of (86.5)% differs from the U.S. federal statutory rate of 35% due primarily to tax credits and certain operating earnings from non-U.S. subsidiaries that are considered indefinitely invested outside the United States, offset by our federal tax non-deductible purchased IPR&D expenses and state taxes.

In June 2006, the FASB issued FIN 48, which clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements in accordance with SFAS 109 by prescribing a minimum recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. FIN 48 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. FIN 48 is effective for fiscal years beginning after December 15, 2006.

On January 1, 2007, we adopted FIN 48 and increased our liability for unrecognized tax benefits by $14.1 million with a corresponding charge to the opening balance of accumulated deficit, as permitted under FIN 48. In addition, we reclassified $68.4 million of unrecognized tax benefits from short-term income taxes payable and noncurrent deferred tax assets to long-term income taxes payable. As of the date of adoption, we had total federal, state and foreign unrecognized tax benefits of $86.2 million recorded primarily in long-term income taxes payable on our Consolidated Balance Sheet, including accrued liabilities related to interest of $4.0 million. Of the total unrecognized tax benefits, $78.0 million, if recognized, would have reduced our effective tax rate in the period of recognition. As permitted under the provisions of FIN 48, we have continued to classify interest and penalties related to unrecognized tax benefits as part of our income tax provision in our Consolidated Statements of Operations.

As of December 31, 2008 and 2007, we had total federal, state and foreign unrecognized tax benefits of $119.3 million and $111.7 million, respectively, including interest of $10.1 million and $8.3 million, respectively. Of the total unrecognized tax benefits at December 31, 2008 and 2007, $111.1 million and $103.5 million, respectively, if recognized, would reduce our effective tax rate in the period of recognition.

During 2008, we reached agreement with the IRS on several issues related to the examinations of our federal income tax returns for 2003 and 2004. As a result, we reduced our unrecognized tax benefits by $30.0 million.

As of December 31, 2008, we believe it is reasonably possible that our unrecognized tax benefits will decrease by approximately $56.0 million in the next 12 months as we expect to have clarification from the IRS around certain of our uncertain tax positions. With respect to the remaining unrecognized tax benefits, we are currently unable to make a reasonable estimate as to the period of cash settlement, if any, with the respective taxing authorities.

 

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This excerpt taken from the GILD 10-Q filed Oct 31, 2008.

Provision for Income Taxes

Our income tax rate was 27.7% and 28.0% for the three and nine months ended September 30, 2008, respectively, compared to 30.8% and 29.7% for the three and nine months ended September 30, 2007, respectively. Our provision for income taxes for the three and nine months ended September 30, 2008 was $192.7 million and $561.8 million, respectively, compared to $177.7 million and $513.5 million for the three and nine months ended September 30, 2007, respectively. The tax rates for the three and nine months ended September 30, 2008 differed from the U.S. federal statutory rate of 35% due primarily to earnings from operations in certain foreign tax jurisdictions for which no U.S. taxes have been provided because we plan to reinvest such earnings indefinitely outside the United States, which is partially offset by state income taxes. In October 2008 the President signed into law the Emergency Economic Stabilization Act of 2008 which included the extension of the federal research and development tax credit for two years through December 31, 2009. The impact of the extension for 2008 will be included in our fourth quarter provision for income taxes.

This excerpt taken from the GILD 10-Q filed Aug 11, 2008.

Provision for Income Taxes

Our income tax rate was 28.4% and 28.2% for the three and six months ended June 30, 2008, respectively, compared to 28.5% and 29.2% for the three and six months ended June 30, 2007, respectively. Our provision for

 

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income taxes for the three and six months ended June 30, 2008 was $175.7 million and $369.1 million, respectively, compared to $162.3 million and $335.7 million for the three and six months ended June 30, 2007, respectively. The tax rates for the three and six months ended June 30, 2008 differed from the U.S. federal statutory rate of 35% due primarily to certain earnings from operations in foreign tax jurisdictions for which no U.S. taxes have been provided because we plan to reinvest such earnings indefinitely outside the United States, partially offset by state taxes. We do not provide for U.S. income taxes on undistributed earnings of our foreign operations that are intended to be permanently reinvested.

Various factors may have favorable or unfavorable effects on our income tax rate. These factors include, but are not limited to, interpretations of existing tax laws, changes in tax laws and rates, the accounting for stock options and other share-based payments, mergers and acquisitions, changes in accounting standards, future levels of capital expenditures, changes in the mix of earnings in the various tax jurisdictions in which we operate, changes in overall levels of pre-tax earnings and finalization of federal, state and foreign income tax audits. The impact on our income tax provision resulting from the above-mentioned factors may be significant and could have a negative impact on our net income.

This excerpt taken from the GILD 10-Q filed May 2, 2008.

Provision for Income Taxes

Our income tax rate was 28.0% for the quarter ended March 31, 2008, compared to 29.9% for the quarter ended March 31, 2007. Our provision for income taxes for the quarter ended March 31, 2008 was $193.4 million compared to $173.4 million for the quarter ended March 31, 2007. The tax rate for the quarter ended March 31, 2008 differed from the U.S. federal statutory rate of 35% primarily due to tax credits and certain earnings from operations in foreign tax jurisdictions for which no U.S. taxes have been provided because we plan to reinvest such earnings indefinitely outside the United States, partially offset by state taxes. We do not provide for U.S. income taxes on undistributed earnings of our foreign operations that are intended to be permanently reinvested.

Various factors may have favorable or unfavorable effects on our income tax rate. These factors include, but are not limited to, interpretations of existing tax laws, changes in tax laws and rates, the accounting for stock options and other share-based payments, mergers and acquisitions, changes in accounting standards, future levels of capital expenditures, changes in the mix of earnings in the various tax jurisdictions in which we operate, changes in overall levels of pre-tax earnings and finalization of federal, state and foreign income tax audits. The impact on our income tax provision resulting from the above-mentioned factors may be significant and could have a negative impact on our net income.

This excerpt taken from the GILD 10-K filed Feb 27, 2008.

Provision for Income Taxes

Our provision for income taxes was $655.0 million, $551.8 million and $347.9 million in 2007, 2006 and 2005, respectively. The 2007 effective tax rate of 28.9% differs from the U.S. federal statutory rate of 35% due primarily to state taxes, offset by tax credits and certain operating earnings from non-U.S. subsidiaries that are considered indefinitely invested outside the United States.

Included in our operating income in 2006 were pre-tax charges of $335.6 million and $2.06 billion for the IPR&D expenses associated with our Corus and Myogen acquisitions, respectively. We did not record any income tax benefit related to the purchased IPR&D expenses as such amounts are non-deductible. The 2006 effective tax rate of (86.5)% differs from the U.S. federal statutory rate of 35% due primarily to our federal tax non-deductible purchased IPR&D expenses and state taxes, offset by tax credits and certain operating earnings from non-U.S. subsidiaries that are considered indefinitely invested outside the United States.

The 2005 effective tax rate of 29.9% differs from the U.S. federal statutory rate of 35% due generally to state taxes offset by the recognition of previously unbenefitted net operating loss and tax credit carryforwards, certain operating earnings from non-U.S. subsidiaries that are considered indefinitely invested outside the United States, and the one-time benefit for qualifying dividends under the American Jobs Creation Act (AJCA).

On October 22, 2004, the AJCA was signed into law. The AJCA allowed for a deduction of 85% of certain qualified foreign earnings that were repatriated, as defined in the AJCA. We elected to apply this provision to qualifying earnings that were repatriated in 2005. The earnings repatriation resulted in a one-time tax provision benefit of approximately $25.1 million which we recognized in 2005.

 

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In June 2006, the FASB issued FIN 48, which clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements in accordance with SFAS 109 by prescribing a minimum recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. FIN 48 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. FIN 48 is effective for fiscal years beginning after December 15, 2006.

On January 1, 2007, we adopted FIN 48 and increased our liability for unrecognized tax benefits by $14.1 million with a corresponding charge to the opening balance of accumulated deficit, as permitted under FIN 48. In addition, we reclassified $68.4 million of unrecognized tax benefits from short-term income taxes payable and noncurrent deferred tax assets to long-term income taxes payable. As of the date of adoption, we had total federal, state, and foreign unrecognized tax benefits of $86.2 million recorded primarily in long-term income taxes payable on our Consolidated Balance Sheet, including accrued liabilities related to interest of $4.0 million. Of the total unrecognized tax benefits, $78.0 million, if recognized, would have reduced our effective tax rate in the period of recognition. As permitted under the provisions of FIN 48, we will continue to classify interest and penalties related to unrecognized tax benefits as part of our income tax provision in our Consolidated Statements of Operations.

As of December 31, 2007, we had total federal, state, and foreign unrecognized tax benefits of $111.7 million, including interest of $8.3 million. Of the total unrecognized tax benefits, $103.5 million, if recognized, would reduce our effective tax rate in the period of recognition. With respect to the unrecognized tax benefits, we are currently unable to make a reasonably reliable estimate as to the period of cash settlement, if any, with the respective taxing authorities.

This excerpt taken from the GILD 10-Q filed Nov 2, 2007.

Provision for Income Taxes

Our income tax rate was 30.8% and 29.7% for the three and nine months ended September 30, 2007, respectively, compared to 158.4% and 46.3% for the three and nine months ended September 30, 2006, respectively. Included in our operating income for the third quarter of 2006 was a pre-tax charge of $355.6 million for purchased IPR&D expense associated with our Corus acquisition. We did not record any income tax benefit related to the purchased IPR&D charge as such amount is non-deductible. Our provision for income taxes for the three and nine months ended September 30, 2007 was $177.7 million and $513.5 million, respectively, compared to $141.5 million and $409.8 million, respectively, for the three and nine months ended September 30, 2006. The tax rates for the three and nine months ended September 30, 2007 differed from the U.S. federal statutory rate of 35% primarily due to state taxes, offset by tax credits and certain earnings from operations in foreign tax jurisdictions for which no U.S. taxes have been provided because we plan to reinvest such earnings indefinitely outside the United States. We do not provide for U.S. income taxes on undistributed earnings of our foreign operations that are intended to be permanently reinvested.

Various factors may have favorable or unfavorable effects on our income tax rate. These factors include, but are not limited to, interpretations of existing tax laws, changes in tax laws and rates, the accounting for stock options and other share-based payments, our adoption of FIN 48, mergers and acquisitions, future levels of R&D spending, changes in accounting standards, future levels of capital expenditures, changes in the mix of earnings in the various tax jurisdictions in which we operate, changes in overall levels of pre-tax earnings and finalization of federal and state income tax audits. The impact on our income tax provision resulting from the above-mentioned factors may be significant and could have a negative impact on our net income.

This excerpt taken from the GILD 10-Q filed Aug 9, 2007.

Provision for Income Taxes

Our income tax rate was 28.5% and 29.2% for the three and six months ended June 30, 2007, respectively, compared to 33.5% and 33.7% for the three and six months ended June 30, 2006, respectively. Our provision for income taxes for the three and six months ended June 30, 2007 was $162.3 million and $335.7 million, respectively, compared to $133.6 million and $268.3 million, respectively, for the three and six months ended June 30, 2006. The tax rates for the second quarter and first half of 2007 differed from the U.S. federal statutory rate of 35% primarily due to state taxes, offset by tax credits and certain earnings from operations in foreign tax jurisdictions for which no U.S. taxes have been provided because such earnings are planned to be reinvested indefinitely outside the United States, as well as the finalization of certain purchase accounting adjustments related to the Corus and Myogen acquisitions. We do not provide for U.S. income taxes on undistributed earnings of our foreign operations that are intended to be permanently reinvested.

Various factors may have favorable or unfavorable effects on our income tax rate. These factors include, but are not limited to, interpretations of existing tax laws, changes in tax laws and rates, the accounting for stock options and other share-based payments, our adoption of FIN 48, mergers and acquisitions, future levels of R&D spending, changes in accounting standards, future levels of capital expenditures, changes in the mix of earnings in the various tax jurisdictions in which we operate, changes in overall levels of pre-tax earnings and finalization of federal and state income tax audits. The impact on our income tax provision resulting from the above-mentioned factors may be significant and could have a negative impact on our net income.

This excerpt taken from the GILD 10-Q filed May 4, 2007.

Provision for Income Taxes

Our income tax rate was 29.9% for the first quarter of 2007 compared to 33.9% for the first quarter of 2006. Our provision for income taxes for the first quarter of 2007 was $173.4 million compared to $134.7 million for the first quarter of 2006. The tax rate for the first quarter of 2007 differs from the U.S. federal statutory rate of 35% primarily due to state taxes, offset by tax credits and certain earnings from operations in lower tax jurisdictions for which no U.S. taxes have been provided because such earnings are planned to be reinvested indefinitely outside the United States. We do not provide for U.S. income taxes on undistributed earnings of our foreign operations that are intended to be permanently reinvested.

Various factors may have favorable or unfavorable effects on our income tax rate. These factors include, but are not limited to, interpretations of existing tax laws, changes in tax laws and rates, the accounting for stock options and other share-based payments, our adoption of FIN 48, mergers and acquisitions, future levels of R&D spending, changes in accounting standards, future levels of capital expenditures, changes in the mix of earnings in the various tax jurisdictions in which we operate, changes in overall levels of pre-tax earnings and finalization of federal and state income tax audits. The impact on our income tax provision resulting from the above-mentioned factors may be significant and could have a negative impact on our net income.

 

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This excerpt taken from the GILD 10-K filed Feb 27, 2007.

Provision for Income Taxes

Our provision for income taxes was $551.8 million, $347.9 million and $207.1 million in 2006, 2005 and 2004, respectively. Included in our operating income in 2006 were pre-tax charges of $335.6 million and $2.06 billion for purchased IPR&D expenses associated with our Corus and Myogen acquisitions, respectively. The 2006 effective tax rate of (86.5)% differs from the U.S. federal statutory rate of 35% primarily due to our federal tax non-deductible purchased IPR&D expenses and state taxes, offset by tax credits and certain operating earnings from non-U.S. subsidiaries that are considered indefinitely invested outside the United States.

The 2005 effective tax rate of 29.9% differs from the U.S. federal statutory rate of 35% due generally to state taxes offset by the recognition of previously unbenefitted net operating loss and tax credit carryforwards, certain operating earnings from non-U.S. subsidiaries that are considered indefinitely invested outside the United States, and the one-time benefit for qualifying dividends under the American Jobs Creation Act (AJCA).

 

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On October 22, 2004, the AJCA was signed into law. The AJCA allows for a deduction of 85% of certain qualified foreign earnings that are repatriated, as defined in the AJCA. We elected to apply this provision to qualifying earnings that were repatriated in 2005. The earnings repatriation resulted in a one-time tax provision benefit of approximately $25.1 million which we recognized in 2005.

The 2004 effective income tax rate of 31.5% differs from the U.S. federal statutory rate of 35% due generally to the recognition of previously unbenefitted net operating losses and tax credit carryforwards and certain earnings from operations in jurisdictions with lower tax rates than the United States and in jurisdictions for which no U.S. taxes have been provided because such earnings are planned to be reinvested indefinitely outside the United States, partially offset by state taxes.

In June 2006, the FASB issued FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes (FIN 48), an interpretation of SFAS No. 109, Accounting for Income Taxes (SFAS 109). FIN 48 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements in accordance with SFAS 109 by prescribing a minimum recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. FIN 48 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. FIN 48 is effective for fiscal years beginning after December 15, 2006. We have adopted FIN 48 as of January 1, 2007, as required. Our preliminary determination of the impact of adopting this standard is in the range of $10 million to $20 million, and the actual amount will be recorded as a charge to our accumulated deficit on our Consolidated Balance Sheet upon adoption of FIN 48.

This excerpt taken from the GILD 10-Q filed Nov 6, 2006.

Provision for Income Taxes

Our effective tax rate for three and nine months ended September 30, 2006 was 158.4% and 46.3%, respectively. Included in our operating income in the third quarter of 2006 was a pre-tax charge of $355.6 million for purchased IPR&D expense associated with our Corus acquisition. We did not record any income tax benefit related to the purchased IPR&D charge as such amount is non-deductible. Our effective income tax rate was 32.0% for each of the three and nine months ended September 30, 2005. Our provision for income taxes for the third quarter of 2006 was $141.5 million compared to $84.3 million for the third quarter of 2005. Our provision for income taxes for the first nine months of 2006 was $409.8 million compared to $250.5 million for the first nine months of 2005. The effective tax rate for the first nine months of 2006 varied from the statutory rate primarily as a result of our non-deductible purchased IPR&D expense, permanently reinvested earnings of our foreign operations and the tax impact of stock-based compensation expensing under SFAS 123R. We do not provide for U.S. income taxes on undistributed earnings of our foreign operations that are intended to be permanently reinvested.

Various factors may have favorable or unfavorable effects on our income tax rate. These factors include, but are not limited to, interpretations of existing tax laws, our adoption of SFAS 123R relating to the accounting for stock options and other share-based payments, changes in tax laws and rates, mergers and acquisitions, future levels of research and development spending, changes in accounting standards, future levels of capital expenditures, changes in the mix of earnings in the various tax jurisdictions in which we operate and changes in overall levels of pre-tax earnings.

In June 2006, the FASB issued FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes (FIN 48), an interpretation of SFAS No. 109, Accounting for Income Taxes (SFAS 109). FIN 48 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements in accordance with SFAS 109 and prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. FIN 48 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. FIN 48 is effective for fiscal years beginning after December 15, 2006. We are still evaluating what impact, if any, the adoption of this standard will have on our consolidated financial statements.

This excerpt taken from the GILD 10-Q filed Aug 4, 2006.

Provision for Income Taxes

Our effective income tax rate was 33.5% and 33.7% for the three and six months ended June 30, 2006, respectively. Our effective income tax rate was 32.0% for each of the three and six months ended June 30, 2005. Our provision for income taxes for the second quarter of 2006 was $133.6 million compared to $92.2 million for the second quarter of 2005. Our provision for income taxes for the first half of 2006 was $268.3 million compared to $166.2 million for the first half of 2005. The effective tax rate for the first half of 2006 varied from the statutory rate primarily as a result of permanently reinvested earnings of our foreign operations and the tax impact of stock-based compensation expensing under SFAS 123R. We do not provide for U.S. income taxes on undistributed earnings of our foreign operations that are intended to be permanently reinvested.

For the full year 2006, we expect our effective income tax rate to be in the range of 33% to 35%, which includes the impact of our adoption of SFAS 123R. Various factors may have favorable or unfavorable effects on our effective income tax rate during the remainder of 2006 and in subsequent years. These factors include, but are not limited to, changes in tax laws and rates, changes in the interpretations of these laws, changes in accounting rules, future levels of research and development spending, future levels of capital expenditures, changes in the mix of earnings in the various tax jurisdictions in which we operate, changes in overall levels of pre-tax earnings and changes in stock-based compensation.

In July 2006, the Financial Accounting Standards Board issued FASB Interpretation (FIN) No. 48, Accounting for Uncertainty in Income Taxes (FIN 48), an interpretation of SFAS No. 109, Accounting for Income Taxes (SFAS 109). FIN 48 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements in accordance with SFAS 109 and prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. FIN 48 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. FIN 48 is effective for fiscal years beginning after December 15, 2006. We are still evaluating what impact, if any, the adoption of this standard will have on our financial position or results of operations.

This excerpt taken from the GILD 10-Q filed May 3, 2006.

Provision for Income Taxes

Our effective income tax rate was 33.9% for the first quarter of 2006. Our effective income tax rate was 32.0% for the first quarter of 2005. Our provision for income taxes for the first quarter of 2006 was $134.7 million compared to $73.9 million for the first quarter of 2005. The effective tax rate for the first quarter of 2006 varied from the statutory rate primarily as a result of permanently reinvested earnings of our foreign operations and the tax impact of stock-based compensation expensing under SFAS 123R. We do not provide for U.S. income taxes on undistributed earnings of our foreign operations that are intended to be permanently reinvested.

For the full year 2006, we expect our effective income tax rate to be in the range of 33% to 35%, which includes the impact of our adoption of SFAS 123R. Various factors may have favorable or unfavorable effects on our effective income tax rate during the remainder of 2006 and in subsequent years. These factors include, but are not limited to, changes in tax laws and rates, changes in the interpretations of these laws, changes in accounting rules, future levels of research and development spending, future levels of capital expenditures, changes in the mix of earnings in the various tax jurisdictions in which we operate, changes in overall levels of pre-tax earnings and changes in stock-based compensation.

This excerpt taken from the GILD 10-Q filed Nov 4, 2005.

Provision for Income Taxes

 

Our effective income tax rate was 32.0% for the third quarter and first nine months of 2005. Our effective income tax rate was 32.0% for the third quarter of 2004 and 31.3% for the first nine months of 2004. Our provision for income taxes for the third quarter of 2005 was $84.3 million compared to $53.3 million for the third quarter of 2004. Our provision for income taxes for the first nine months of 2005 was $250.5 million compared to $154.8 million for the first nine months of 2004. The effective tax rate for the third quarter and first nine months of 2005 varies from the statutory rate primarily as a result of permanently reinvested earnings of our foreign operations. We do not provide for U.S. income taxes on undistributed earnings of our foreign operations that are intended to be permanently reinvested.

 

Various factors may have favorable or unfavorable effects on our effective tax rate during the remainder of 2005 and in subsequent years. These factors include, but are not limited to, changes in tax laws and rates, changes in the interpretations of these laws, changes in accounting rules, future levels of research and development spending, future levels of capital expenditures, changes in the mix of earnings in the various tax jurisdictions in which we operate, changes in overall levels of pre-tax earnings and the potential repatriation of foreign earnings under the AJCA.

 

On October 22, 2004, the AJCA was signed into law. The AJCA allows for a deduction of 85% of certain foreign earnings that are repatriated, as defined in the AJCA. We are evaluating the effects of the repatriation provisions and will complete this evaluation during the fourth quarter of 2005. The range of possible amounts that we are considering for repatriation during 2005 under this provision is between zero and $300.0 million. The related potential impact on income taxes under this provision if we choose to repatriate foreign earnings under the AJCA, would be a one-time benefit with a range between zero and $30.0 million.

 

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This excerpt taken from the GILD 10-Q filed Aug 4, 2005.

Provision for Income Taxes

 

Our effective income tax rate was 32% for the second quarter and first half of 2005. Our effective income tax rate was 31% for the second quarter and first half of 2004. Our provision for income taxes for the second quarter of 2005 was $92.2 million compared to $50.1 million for the second quarter of 2004. Our provision for income taxes for the first half of 2005 was $166.2 million compared to $101.5 million for the first half of 2004. The effective tax rate for the second quarter and first half of 2005 and 2004 are different from the statutory rate primarily as a result of permanently reinvested earnings of our foreign operations. We do not provide U.S. income taxes on undistributed earnings of our foreign operations that are intended to be permanently reinvested.

 

Various factors may have favorable or unfavorable effects on our effective tax rate during the remainder of 2005 and in subsequent years. These factors include, but are not limited to, changes in tax laws and rates, changes in the interpretations of these laws, changes in accounting rules, future levels of research and development spending, future levels of capital expenditures, changes in the mix of earnings in the various tax jurisdictions in which we operate and changes in overall levels of pre-tax earnings.

 

On October 22, 2004, the American Jobs Creation Act (the AJCA) was signed into law. The AJCA allows for a deduction of 85% of certain foreign earnings that are repatriated, as defined in the AJCA. We may elect to apply this provision to qualifying earnings repatriations in fiscal 2005. We have started an evaluation of the effects of the repatriation provision; however, we do not expect to be able to complete this evaluation until after Congress or the Treasury Department provide additional clarifying language on key elements of the provision. We expect to complete our evaluation of the effects of the repatriation provision within a reasonable period of time following the publication of the additional clarifying language. The range of possible amounts that we are considering for repatriation under this provision is between zero and $500 million (maximum amount allowable to us as defined in the AJCA). Currently, the related potential range of impact on income taxes cannot be reasonably estimated.

 

This excerpt taken from the GILD 10-Q filed May 6, 2005.

Provision for Income Taxes

 

Our effective income tax rate was 32% and 31% for the first quarter of 2005 and 2004, respectively.  Our provision for income taxes for the first quarter of 2005 was $73.9 million compared to $51.4 million for the first quarter of 2004.  The effective tax rates are different from the statutory rate primarily as a result of permanently reinvested earnings of our foreign operations.  We do not provide U.S. income taxes on undistributed earnings of our foreign operations that are intended to be permanently reinvested.

 

Various factors may have favorable or unfavorable effects on our effective tax rate during the remainder of 2005 and in subsequent years.  These factors include, but are not limited to, changes in tax laws and rates, changes in the interpretations of these laws, changes in accounting rules, future levels of research and development spending, future levels of capital expenditures, changes in the mix of earnings in the various tax jurisdictions in which we operate and changes in overall levels of pre-tax earnings.

 

On October 22, 2004, the American Jobs Creation Act (the AJCA) was signed into law.  The AJCA allows for a deduction of 85% of certain foreign earnings that are repatriated, as defined in the AJCA.  We may elect to apply this provision to qualifying earnings repatriations in fiscal 2005.  We have started an evaluation of the effects of the repatriation provision; however, we do not expect to be able to complete this evaluation until after Congress or the Treasury Department provides additional clarifying language on key elements of the provision.  We expect to complete our evaluation of the effects of the repatriation provision within a reasonable period of time following the publication of the additional clarifying language.  The range of possible amounts that we are considering for repatriation under this provision is between zero and $500 million (maximum amount allowable to us as defined in the AJCA).  Currently, the related potential range of impact on the provision for income taxes cannot be reasonably estimated.

 

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