| |
13. Income Taxes
The components of the income tax provision are summarized as follows:
| |
2003 |
2002 |
2001 |
|
Current expense (benefit)
|
|
|
|
|
Federal |
$ |
5,048 |
$) |
2,586 |
$ |
(22,298) |
|
State |
544 |
262) |
(3,199) |
|
| |
5,592 |
2,848) |
(25,497) |
| Deferred expense (benefit) |
12,511 |
(5,050) |
20,096) |
|
| Income tax expense (benefit) |
$ |
18,103 |
$ |
(2,202) |
$ |
(5,401) |
|
The effective tax rate differs from the statutory rate primarily
as a result of the following:
|
2003 |
2002 |
2001 |
|
|
Statutory rate
|
35.0 |
% |
35.0 |
% |
35.0 |
% |
| Patronage refunds |
(13.8 |
) |
(35.1 |
) |
(37.4 |
) |
| State income tax, net of federal benefit |
2.0 |
|
(0.3 |
) |
(0.5 |
) |
| Amortization of goodwill |
0.3 |
|
0.5 |
|
0.4 |
|
| Effect of foreign operations |
(1.4 |
) |
(4.2 |
) |
1.5 |
|
| Disposal of investment |
– |
|
– |
|
(5.1 |
) |
| Taxes previously not benefited |
(5.3 |
) |
– |
|
(2.4 |
) |
| Other, net |
1.0 |
|
1.8 |
|
0.3 |
|
|
| Effective tax rate |
17.8 |
% |
(2.3 |
)% |
(8.2 |
)% |
|
The significant components of the deferred tax assets and liabilities
at December 31 are as follows:
| |
2003 |
2002 |
|
Deferred tax assets related to:
|
|
|
|
Deferred patronage |
$ |
44,074 |
$ |
4,323) |
|
Accrued expenses |
65,729 |
25,160) |
|
Allowance for doubtful accounts |
7,246 |
9,012) |
|
Inventories |
– |
2,252) |
|
Asset impairments |
4,038 |
10,232) |
|
Joint ventures |
15,041 |
–) |
|
Net operating loss carryforward |
6,503 |
48,312) |
|
Deferred tax credits |
6,796 |
–) |
|
| Total deferred tax assets |
149,427 |
99,291) |
|
| Deferred tax liabilities related to: |
|
) |
|
Property, plant and equipment |
80,190 |
65,157) |
|
Inventories |
13,191 |
–) |
|
Intangibles |
6,786 |
17,800) |
|
Joint ventures |
– |
1,292) |
|
Deferred revenue |
20,693 |
–) |
|
Other, net |
3,493 |
347) |
|
| Total deferred tax liabilities |
124,353 |
84,596) |
|
| Net deferred tax assets |
$ |
25,074 |
$ |
14,695 |
|
SFAS No. 109 “Accounting for Income Taxes” requires
consideration of a valuation allowance if it is “more likely
than not” that benefits of deferred tax assets will not be
realized. Management has determined, based on prior earnings history
and anticipated earnings, that no valuation allowance is necessary.
Income taxes (recovered) paid in 2003, 2002, and 2001 were $(6.6)
million, $(21.7) million and $22.3 million, respectively.
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