THQ 2006 Annual Report Download - page 74

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66
12.Income Taxes
United States and foreign income before taxes and details of the provision for income tax are as follows (in
thousands):
Fiscal Year Ended March 31,
2006 2005 2004
Income before income taxes:
United States ................................................. $31,454 $ 6 8,933 $ 4 6,115
Foreign...................................................... 10,778 9,322 9,121
$ 42,232 $ 7 8,255 $ 5 5,236
Provision for income tax expense (benefit):
Current
Federal.................................................... $(11,165) $ 373 $9,054
State ...................................................... 957 (3,687 ) 2,407
Foreign.................................................... 5,325 2,593 4,495
Total current ............................................... (4,883) (721 ) 15,956
Deferred
Federal.................................................... 9,238 8,050 2,775
State...................................................... (5,016) 1,421 319
Foreign.................................................... (1,679) 1,754 (2,020)
Total deferred.............................................. 2,543 11,225 1,074
Add back benefit (expense) recorded to stockholders’ equity:
Tax benefit related to stock option exercises...................... 10,612 6,640 2,367
Tax expense related to unrealized gain on investments............. (372) (1,940 ) —
Provision for income tax......................................... $7,900 $ 1 5,204 $ 1 9,397
The differences between the U.S. federal statutory tax rate and our effective tax rate, expressed as a
percentage of income before income taxes and minority interest, were as follows:
Fiscal Year Ended
March 31,
2006 2005 2004
U.S. federal statutory tax rate.............................................. 35.0% 35.0%35.0%
State taxes, net of federal benefit and research and development credits. ........ (2.3)(2.2) 3.6
Research anddevelopment credits......................................... (5.4)(7.9) —
Tax exempt interest income................................................ (5.1)(1.1) (1.0)
Rate differences in foreigntaxes and other .................................. (3.5)(4.4) (2.5)
Effective tax rate....................................................... 18.7%19.4% 35.1%