3Ware 1999 Annual Report Download - page 38

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6. INCOME TAXES
The provision for income taxes consists of the following (in thousands):
Year Ended March 31,
1997 1998 1999
Current:
Federal $380 $3,606 $ 9,860
State 279 682 1,064
Total current 659 4,288 10,924
Deferred:
Federal — (3,558) (362)
State — (324) (329)
Total deferred — (3,882) (691)
$659 $ 406 $10,233
The provision for income taxes reconciles to the amount computed by applying the federal statutory rate (35%) to income
before income taxes as follows (in thousands):
Year Ended March 31,
1997 1998 1999
$% $ % $%
Tax at federal statutory rate $2,441 35% $5,468 35% $ 9,578 35%
Increase (decrease) in valuation allowance
of deferred tax assets (2,343) (34) (5,094) (32) — —
Foreign sales corporation — — (309) (2) (387) (1)
Federal alternative minimum tax 380 5 — — — —
State taxes, net of federal benefit 181 3 233 1 478 1
Federal tax credits — — (281) (2) (1,216) (5)
Merger costs and deferred compensation — — — — 763 3
Other — — 389 3 1,017 4
$ 659 9% $ 406 3% $10,233 37%
Significant components of the Company’s deferred tax assets and liabilities for federal and state income taxes
as of March 31, 1998 and 1999 are as shown on the following page. At March 31, 1998, the effective tax rate is computed
based on a full reduction of the valuation allowance and realization of the deferred tax asset.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
36
1999
AMCC