eTrade 2001 Annual Report Download - page 149

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Table of Contents
Deferred income taxes are recorded when revenues and expenses are recognized in different periods for financial statement and tax
return purposes. The temporary differences and tax carryforwards that created deferred tax assets (liabilities) are as follows (in
thousands):
December31, 2001 September30, 2000
Deferred tax assets:
Reserves and allowances $ 3,281 $ 4,013
Basis difference in investments 52,494 (43,511 )
Net operating loss carryforwards 113,882 57,232
Depreciation and amortization 6,324 1,543
Deferred compensation 31,369 3,146
Capitalized technology development 10,161 7,433
Provision for loan loss 7,032 3,591
Undistributed earnings in subsidiaries 8,199 5,563
Alternative minimum tax credit 1,840 1,680
Restructuring reserve and related writedowns 79,704 —
Other 5,947 3,455
Total deferred tax assets 320,233 44,145
Deferred tax liabilities:
Internally developed software (29,598 ) (2,857 )
Acquired intangibles (45,390 ) (6,746 )
Purchased software (3,024 ) (3,024 )
Other (7,322 ) (463 )
Total deferred tax liabilities (85,334 ) (13,090 )
Valuation allowance (69,398 ) (10,537 )
Net deferred tax asset $ 165,501 $ 20,518
The Company recorded a valuation allowance of $69.4 million at December 31, 2001 and $10.5 million at September 30, 2000 for the
deferred tax assets, as full realization of domestic capital loss carryforwards and net operating loss carryforward in certain foreign
countries are not expected.
The effective tax rates differed from the federal statutory rates as follows:
Year Ended
December31,
2001
Three
MonthsEnded
December31,
2000
Year Ended
September30, 2000 Year Ended September30, 1999
Federal statutory rate (35.0 )
%
35.0 % 35.0 % (35.0 )
%
State income taxes, net of
federal tax benefit
(2.9 ) 0.8 5.8 (5.9 )
2002. EDGAR Online, Inc.