3Ware 2001 Annual Report Download - page 39

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N O T E S T O C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S
6.I N C O M E TA X E S
The provision for income taxes consists of the following:
Fiscal Year Ended March 31,
(in thousands) 1999 2000 2001
Current:
Federal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 9,860 $21,966 $ —
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 202
State . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,064 2,976 308
Total current . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,924 24,942 510
Deferred:
Federal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (362) 65 (1,392)
State . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (329) 360 (199)
Total deferred . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (691) 425 (1,591)
$10,233 $25,367 $ (1,081)
The provision for income taxes reconciles to the amount computed by applying the federal statutory rate (35%) to
income before income taxes as follows:
Fiscal Year Ended March 31,
1999 2000 2001
(in thousands) $ % $ % $ %
Tax at federal statutory rate . . . . . . . . . . . . . . . $ 9,578 35% $25,897 35% $ (153,053) 35%
Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — — 70,735 (16)
In-process research and development . . . . . . . . — — — — 106,152 (24)
Foreign sales corporation . . . . . . . . . . . . . . . . (387) (1) (873) (1) — —
Tax exempt interest . . . . . . . . . . . . . . . . . . . . — — (312) — (8,231) 2
State taxes, net of federal benefit . . . . . . . . . . . 478 1 2,294 3 3,042 (1)
Federal tax credits . . . . . . . . . . . . . . . . . . . . . . (1,216) (5) (2,122) (3) (17,000) 4
State tax credits . . . . . . . . . . . . . . . . . . . . . . . — — (1,097) (2) (5,760) 1
Merger costs and deferred compensation . . . . . 763 3 213 — 2,841 (1)
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,017 4 1,367 2 193 —
$10,233 37% $25,367 34% $ (1,081) —
Significant components of the Company’s deferred tax assets and liabilities for federal and state income taxes are as
shown below:
March 31,
(in thousands) 1999 2000 2001
Deferred tax assets:
Inventory write-downs and other reserves . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,850 $2,433 $ 14,470
Net operating loss carryforwards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,719 — 127,531
Capitalization of inventory and research and development costs . . . . . . . . . . . . . . 313 405 2,208
Research and development credit carryforwards . . . . . . . . . . . . . . . . . . . . . . . . . 298 1,364 29,126
State income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47 140 —
Other credit carryforwards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 447 — 1,235
Total deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,674 4,342 174,570
Deferred tax liabilities:
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (101) (194) (547)
Purchase accounting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — (266,466)
Total deferred tax liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (101) (194) (267,013)
Net deferred tax assets (liabilities) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $4,573 $4,148 $ (92,443)
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