THQ 2005 Annual Report Download - page 95

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72
Deferred income taxes were:
March 31,March 31,
2005 2004
Federal State Foreign Federal State Foreign
(In thousands)
Current
Deferred income tax assets:
Net operatingloss................. $ — $— $1,323 $— $ — $ —
Allowance for price protection,
returns and doubtful accounts .... 8,6481,235 7748,697 1,242 821
Accruedexpenses................. 6,010 859—1,653 237 —
Stateincometaxes ................ 1,382 — —687 — —
Other—net....................... 401 62626 703109 (551)
Valuationallowance............... — —(330) — — —
Totaldeferredincome taxassets ...... $16,441 $2,156 $2,393 $11,740 $1,588 $ 270
Deferred income tax liabilities:
Software development costs........ (21,722) (3,103) —(12,291)(1,756) —
Other—net....................... (2,502) (358) (146) (169) (24) —
Deferredincometaxes ............... $(7,783) $(1,305) $2,247$(720) $ (192) $ 270
Non-Current
Deferred income tax assets:
Net operatingloss................. $ — $— $ — $— $ 124 $1,951
Other—net....................... 1,534 2192,000 2,163 322 —
Valuation allowance............... ——(1,828)(854) (79) —
Net deferredtax assets ............... $1,534 $219 $ 172 $1,309 $ 367 $1,951
Deferred income tax liabilities:
Software development costs........ (1,045) (149) —(768) (110) —
Depreciation andamortization...... (1,483) (142) — (397) — —
Identifiable intangible assets........ (825) (118) (1,947)(825) (118) —
Other—net....................... (592) (85) (5)(743) (106) —
Deferredincometaxes ............... $(2,411) $ (275) $(1,780) $(1,424) $ 33 $1,951
The valuation allowance increased by $1.3 million during fiscal 2005.
As of March 31, 2005 wehad no federal,no state and $3.3 million of foreign net operating loss
carryforwards. The foreign net operating loss carryforward is indefinite.
Total deferred tax assets and total deferred tax liabilities at March 31, 2005 were $22.9 million and $34.2
million, respectively. Total deferred tax assets and total deferred tax liabilities at March 31, 2004 were
$17.2million and $17.3 million, respectively.
The non-current portion of income tax receivable represents the research and development income tax
credits that we anticipate receiving beyond our normal operating cycle of 12 months.
At March 31, 2005 we had accumulated foreign earnings of $20.2 million. We do not plan to repatriate
these earnings, therefore, no United States income tax has been provided on the foreign earnings.
Additionally, we have not tax effected the cumulative translation adjustment as we have no intention of
repatriating foreign earnings.