Adaptec 2002 Annual Report Download - page 76

Year Ended December 31,
−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−
(in thousands) 2002 2001 2000
−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−
Income (loss) before provision for income taxes $ (83,865) $ (656,817) $ 177,710
Federal statutory tax rate 35% 35% 35%
Income taxes at U.S. Federal statutory rate $ (29,353) $ (229,886) $ 62,198
State taxes, net of federal benefit − − 224
In process research and development costs − − 13,370
Goodwill and other intangible assets 398 16,188 11,297
Impairment of goodwill and purchased intangible assets − 94,440 −
Acquisition costs − − 13,291
Deferred stock compensation 984 14,414 9,576
Incremental taxes on foreign earnings 1,971 1,535 9,093
Other 421 (97) 530
Valuation allowance 6,721 85,643 (17,167)
−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−
Provision for (recovery of) income taxes $ (18,858) $ (17,763) $ 102,412
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Significant components of the Company's deferred tax assets and liabilities are
as follows:
December 31,
−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−
(in thousands) 2002 2001
−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−
Deferred tax assets:
Net operating loss carryforwards $ 198,215 $ 176,838
State tax loss carryforwards 12,975 10,926
Credit carryforwards 29,900 26,180
Reserves and accrued expenses 20,652 19,058
Restructuring and other charges 52,979 67,207
Depreciation and amortization 9,262 10,553
Deferred income 3,809 4,800
Deferred stock compensation − 221
−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−
Total deferred tax assets 327,792 315,783
Valuation allowance (326,238) (305,929)
−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−
Total net deferred tax assets 1,554 9,854
−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−
Deferred tax liabilities:
Capitalized technology (498) (369)
Unrealized gain on investments (2,737) (17,715)
−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−
Total deferred tax liabilities (3,235) (18,084)
−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−
Total net deferred taxes $ (1,681) $ (8,230)
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At December 31, 2002, the Company has approximately $583.4 million of federal
net operating losses, which will expire through 2022. Approximately $6.4 million
of the federal net operating losses is subject to ownership change limitations
provided by the Internal Revenue Code of 1986. The Company also has
approximately $216.2 million of state tax loss carryforwards, which expire
through 2022. The utilization of a portion of these state losses is also subject
to ownership change limitations provided by the various states' income tax
legislation.
Included in the credit carryforwards are $18.9 million of federal research and
development credits which expire through 2022, $549,000 of foreign tax credits
which expire in 2003, $497,000 of federal AMT credits which carryforward
indefinitely, $11.1 million of state research and development credits which do
not expire, $1.3 million of state research and development credits which expire
through 2007, and $1.5 million of state manufacturer's investment credits which
expire through 2012.
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