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Scitex in Agreement to Resolve IRS Audit

Tuesday, February 24, 2004

Press release from the issuing company

TEL AVIV, Israel, February 23 -- Scitex Corporation Ltd. today announced that it has entered into an agreement with the US Internal Revenue Service to resolve a US federal income tax audit of Scitex's US subsidiaries for the years 1992 through 1996. Under the terms of the agreement, Scitex agreed to an assessment of $5.7 million of additional federal income taxes for these years to resolve the remaining proposed IRS assessment of an additional $29.6 million of federal income taxes. When added to a previous "partial agreed assessment" by the IRS for $10.6 million of federal income taxes, Scitex's total additional federal income taxes for these years as a result of the IRS audit will be $16.3 million. This amount does not include interest and additional state income taxes that will result from the agreement with the IRS. Scitex is currently working to determine such amounts. Scitex had previously made advance payments to the IRS of $21.5 million for federal income taxes relating to the audit period and had established reserves for additional liabilities arising out of the audit. At this stage after initial review, Scitex estimates that the final additional cash cost of the IRS audit (taking into consideration the $16.3 million of assessment, state taxes and interest thereon, and after application of the $21.5 million advance payment), will be in the range of $7 to $14 million. Scitex has sufficient reserves on its books to cover the anticipated additional payment.

 

 

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