Electronic Arts 2002 Annual Report Download - page 66

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Income tax expense (benefit) for the fiscal years ended March 31, 2002, 2001 and 2000 consisted of:
(In thousands) CURRENT DEFERRED TOTAL
2002:
Federal$60,728 $ (44,277) $ 16,451
State 1,048 (672) 376
Foreign 4,306 2,295 6,601
Charge in lieu of taxes from employee stock plans for Class A 22,541 — 22,541
$88,623 $ (42,654) $ 45,969
2001:
Federal$(4,233) $ (19,975) $ (24,208)
State 582 (13,809) (13,227)
Foreign 6,981 541 7,522
Charge in lieu of taxes from employee stock plans for Class A 25,750 — 25,750
$29,080 $ (33,243) $ (4,163)
2000:
Federal$2,766 $ 3,231 $ 5,997
State 299 859 1,158
Foreign 15,573 (2,649) 12,924
Charge in lieu of taxes from employee stock plans 32,563 — 32,563
$51,201 $ 1,441 $ 52,642
The components of the net deferred tax assets as of March 31, 2002 and 2001 consist of:
(In thousands) 2002 2001
Deferred tax assets:
Accruals, reserves and other expenses $53,891 $76,603
Net operating loss carryforwards 50,174 6,662
Tax credits 46,118 27,066
Total 150,183 110,331
Deferred tax liabilities:
Undistributed earnings of DISC (913) (1,189)
Prepaid royalty expenses (11,342) (44,678)
Fixed assets (35,266) (4,456)
Total (47,521) (50,323)
Net deferred tax asset $102,662 $60,008
At March 31, 2002, deferred tax assets of $38,597,000 and $64,065,000 were included in other current
assets and other assets, respectively.
At March 31, 2002, the Company had Federal net operating loss carryforwards of approximately
$127,000,000 for income tax reporting purposes, which expire in 2021 and 2022.The Company also had
state net operating loss carryforwards of approximately $177,000,000 for income tax reporting purposes,
which expire beginning in 2006.
The Company also has research and experimental tax credits aggregating approximately $25,000,000
and $10,000,000 for federal and California purposes, respectively.The federal credit carryforwards expire
from 2006 to 2022.The California credits carry over indefinitely until utilized.The Company also has for-
eign tax credit carryforwards of approximately $10,500,000, which expire from 2003 to 2007.
The differences between the statutory income tax rate and the Company’s effective tax rate, expressed
as a percentage of income (loss) before provision for (benefit from) income taxes, for the years ended March
31, 2002, 2001 and 2000 were as follows:
2002 2001 2000
Statutory Federal tax rate 35.0% (35.0%) 35.0%
State taxes, net of Federal benefit 1.5% (10.0%) 1.5%
Differences between statutory rate and foreign effective tax rate (3.0%) 20.2% (2.8%)
Research and development credits (3.4%) (4.7%) (1.7%)
Other 0.9% (1.5%) (1.0%)
31.0% (31.0%) 31.0%
EA 2002 AR
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