2000 2001 2002 $1,559 $1,440 $ 494 pols & BellSouth Final F... x Q The consolidated balance sheets reflect the anticipated tax impact of future taxable income or deductions implicit in th consolidated balance sheets in the form of temporary differ ences. These temporary differences reflect the difference between the basis in assets and liabilities as measured in the consolidated financial statements and as measured by tax laws using enacted tax rates. The provision for income taxes is summarized as follows: Current Federal 100% O Areconciliation of the federal statutory income tax rate to our effective tax rate follows: Fodorol statutory tax rato State income taxes, net of 2000 2001 2002 36.0% 35.0% 35% federal income tax beneft het earnings (losses) of equity affiliates 1.9 2.3 22 19 (0.3) Change in foreign valuation allowance 1.0 18 7.1 Investment tax credits 10.7) 10.99 (0.6) Tax over book basis in State foreign investments (0.7) (0.9) 100 88 36 Other 10.5) 10.9 (2.7) Foreign 104 97 109 Effective tax rate 36.0% 36.0% 40.8% $1,763 $1,625 $ 639 Deferred, net Federal $.600 $ (210) $1,101 State 97 54 110 Foreign (25) 25 (34) $672 5 (131) $1,265 Investment tax credits, net Federal $ 139 Foreign (18) $167 $ 03) (4) 5 (27) Total provision for incometaxes 52,378 $ (47) $1,447 (10) $ (37) $1,867 Temporary differences which gave rise to deferred tax assets and (liabilities) at December 31 were as follows: Unrealized loss on marketable securities Loan impairments Operating loss and tax credit carryforwards 2001 2002 $ 601 6 112 425 869 Capital loss carrylorwards 326 Restructuring accruot 216 161 Alowance for uncollectibles 172 112 Foreign subsidiary basis differential 130 - Regulatory accruals 64 25 Other 176 79 1,784 1.690 Valuation allowance (470) (906) $1,314 5784 Deferred tax assets Property related Equity investments Issue bosk accounting Licenses Compensation related Other Deferred tax liabilities Unamortized investment tax credes Nat delarred tax liability $0.968) $(2.17 (641) (982) (288) (246) (190) (126) (183) (410) (99) (176) 14.360) (5111) (5.4) (27) $3,100) 5(4,354) f. Cannot determine 3. How much of BellSouth's provision for income taxes for fiscal 2002 was due on its tax return (federal, state, and foreign)? a. 1,572 b. 2,897 c. 225 d. 494 e. 639 4. What is your estimate of the amount of income taxes BellSouth paid during fiscal 2002? a. 225 b. 505 c. 639 919 Need to understand where beginning and ending balance come from. e. 1,867 2. (2 points) (3 points) a. How much of BellSouth's provision for income taxes for fiscal 2002 was due on its tax return (federal, state, and foreign)? The current portion of the provision in fiscal 2002 was $639. b. What is your estimate of the amount of income taxes BellSouth paid during fiscal 2002? 919 ows provided by (used for) operating activities: ome Taxes Payable 505 639 225 2 Beginning balance Current portion of provision Taxes paid Ending balance 3,117 ments to reconcile net income to net cash provided by operating activities