Adaptec 2003 Annual Report Download - page 79
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Year Ended December 31,
(in thousands) 2003 2002 2001
Current:
State $ 4 $ 4 $ 4
Foreign (8,987) (27,291) (7,034)
(8,983) (27,287) (7,030)
Deferred:
Foreign 1,131 8,429 (10,733)
1,131 8,429 (10,733)
Recovery of income taxes $ (7,852) $ (18,858) $ (17,763)
A reconciliation between the Company’s effective tax rate and the U.S. Federal statutory rate is as follows:
Year Ended December 31,
(in thousands) 2003 2002 2001
Income (loss) before provision for income taxes $ (15,843) $ (83,865) $ (656,817)
Federal statutory tax rate 35% 35% 35%
Income taxes at U.S. Federal statutory rate (5,545) (29,353) (229,886)
Goodwill and other intangible assets — 398 16,188
Impairment of goodwill and purchased intangible assets — — 94,440
Deferred stock compensation 353 984 14,414
Incremental tax (recovery) on foreign earnings (19,639) 1,971 1,535
Additional recovery of prior year taxes (3,517)
Other — 421 (97)
Valuation allowance 20,496 6,721 85,643
Recovery of income taxes $ (7,852) $ (18,858) $ (17,763)
Significant components of the Company’s deferred tax assets and liabilities are as follows:
December 31,
(in thousands) 2003 2002
Deferred tax assets:
Net operating loss carryforwards $ 219,043 $ 198,215
State tax loss carryforwards 18,186 12,975
Credit carryforwards 31,948 29,900
Reserves and accrued expenses 16,199 20,652
Restructuring and other charges 7,343 52,979
Depreciation and amortization 8,966 9,262
Deferred income 3,543 3,809
Deferred stock compensation — —
Total deferred tax assets 305,228 327,792
Valuation allowance (305,107) (326,238)
Total net deferred tax assets 121 1,554
Deferred tax liabilities:
Capitalized technology (195) (498)
Unrealized gain on investments (1,167) (2,737)
Total deferred tax liabilities (1,362) (3,235)
Total net deferred taxes $ (1,241) $ (1,681)
At December 31, 2003, the Company has approximately $637.2 million of federal net operating
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