Adobe 2000 Annual Report Download - page 65

Download and view the complete annual report

Please find page 65 of the 2000 Adobe annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 79

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79

Total income tax expense differs from the expected tax expense (computed by multiplying
the United States federal statutory rate of 35% for fiscal years 2000, 1999, and 1998 by
income before income taxes) as a result of the following:
DECEMBER 1 DECEMBER 3 NOVEMBER 27
YEARS ENDED 2000 1999 1998
Computed “expected”
tax expense $ 155,309 $ 131,050 $ 58,693
State tax expense,
net of federal benefit 12,403 14,419 6,068
Nondeductible goodwill 958 — 2,011
Tax-exempt income (3,868) (2,650) (4,190)
Tax credits (8,000) (2,450) (4,708)
Foreign tax rate differential (571) — 1,406
Other, net (300) (3,693) 3,270
$ 155,931 $ 136,676 $ 62,550
The tax effects of the temporary differences that give rise to significant portions of the
deferred tax assets and liabilities as of fiscal 2000 and 1999 are presented below:
DECEMBER 1 DECEMBER 3
YEARS ENDED 2000 1999
Deferred tax assets:
Acquired technology $ 11,920 $ 14,916
Reserves and deferred revenue 29,625 38,159
Net operating loss carryforwards — 933
Other 608 821
Total gross deferred tax assets 42,153 54,829
Deferred tax asset valuation allowance (525) (1,458)
Total deferred tax assets 41,628 53,371
Deferred tax liabilities:
Depreciation and amortization (5,164) (3,176)
Unrealized gains on investments (14,379) (37,867)
Other
(892) (164)
Total deferred tax liabilities (20,435) (41,207)
Net deferred tax assets $ 21,193 $ 12,164
We provide United States income taxes on the earnings of foreign subsidiaries unless the
subsidiaries’ earnings are considered permanently reinvested outside the United States.
For financial reporting purposes, a valuation allowance has been established for certain
deferred assets related to the write-down of investments. Management believes that it is
more likely than not that the results of future operations will generate sufficient taxable
income to realize the net deferred tax assets.