EMC 2002 Annual Report Download - page 69

Table of Contents
EMC CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The components of the current and noncurrent deferred tax assets, net are as follows (table in thousands):
December 31,
2002
December 31,
2001
Current deferred tax assets:
Accounts and notes receivable $ 51,169 $ 53,556
Inventory 45,075 105,147
Accrued expenses 74,227 77,088
Deferred revenue 62,414 46,945
Other 17,312 4,861
Total current deferred tax assets $ 250,197 $ 287,597
Noncurrent deferred tax assets (liabilities):
Property, plant and equipment, net $ 16,282 $ 8,838
Intangible and other assets, net (20,604) 58,478
Equity 18,063 14,574
Other noncurrent liabilities (108,152) (128,438)
Credit carryforwards 3,680 3,680
Net operating loss carryforwards 170,774 163,883
Valuation allowance (64,148) (95,237)
Other comprehensive loss 28,031 21,062
Total noncurrent deferred tax assets $ 43,926 $ 46,840
EMC has federal and foreign net operating loss carryforwards of $483.4 million, portions of which are subject to annual limitations. Certain net
operating losses will begin to expire in the year 2003, while others have an unlimited carryforward period. The valuation allowance decreased from $95.2
million at December 31, 2001 to $64.1 million at December 31, 2002. The decrease was primarily attributable to net operating losses of foreign subsidiaries
that were eliminated as a result of liquidating these entities and realizing capital loss carryforwards. The valuation allowance at December 31, 2002 relates to
foreign subsidiaries' operating losses that are subject to limitation, foreign subsidiaries' deferred tax assets and capital loss carryforwards.
Deferred income taxes have not been provided on basis differences related to investments in foreign subsidiaries. These basis differences were
approximately $2,729.4 million and $2,371.2 million at December 31, 2002 and 2001, respectively, and consisted of undistributed earnings permanently
invested in these entities. The unrecognized deferred tax liability associated with these unremitted earnings is approximately $729.7 million and
$604.1 million as of December 31, 2002 and 2001, respectively. Income before income taxes from foreign operations for 2002, 2001 and 2000 was
$161.3 million, $79.3 million and $879.1 million, respectively.
K. Retirement Plans and Retiree Medical Benefits
401(k) Plan
EMC has established a deferred compensation program for certain employees that is qualified under Section 401(k) of the Internal Revenue Code of
1986, as amended. At the end of each calendar quarter, EMC makes a cash contribution that matches 100% of the employee's contribution up to 3% of the
employee's quarterly compensation. Additionally, provided that certain quarterly profit goals are attained, in succeeding quarters, EMC provides an additional
matching contribution of 1% of the employee's quarterly compensation up to a maximum quarterly matching contribution not to exceed 6% of compensation
or $750 per person per quarter. EMC's contribution amounted to $26.5 million in 2002, $28.4 million in 2001 and $23.7 million in 2000.
65