 |
|
|
 |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
|
|
14. INCOME TAXES
Income from continuing operations before income taxes included income from foreign operations of $8.0 million in fiscal 2002 and losses from
foreign operations of $0.7 million in fiscal 2003 and $0.4 million in fiscal 2004. The provision for income taxes from continuing operations consisted
of the following:
| |
FISCAL |
|
| (In thousands) |
2002 |
2003 |
2004 |
|
Current:
Federal |
$ |
29,970 |
|
$ |
92,249 |
|
$ |
116,589 |
|
 |
| State |
|
7,917 |
|
|
5,721 |
|
|
(31,420 |
) |
|
| Foreign |
|
3,752 |
|
|
2,371 |
|
|
- |
|
|
| |
|
41,639 |
|
|
100,341 |
|
|
85,169 |
|
|
Deferred:
Federal |
|
(21,617 |
) |
|
33,107 |
|
|
43,720 |
|
|
| State |
|
(3,088 |
) |
|
(3,812 |
) |
|
4,779 |
|
|
| Foreign |
|
- |
|
|
- |
|
|
2,202 |
|
|
| |
|
(24,705 |
) |
|
29,295 |
|
|
50,701 |
|
|
| Total provision for income taxes from continuing operations |
$ |
16,934 |
|
$ |
129,636 |
|
$ |
135,870 |
|
|
|
|
Differences between income taxes calculated using the federal statutory income tax rate of 35% and the provision for income taxes from continuing operations were as follows:
| |
FISCAL |
|
| (In thousands) |
2002 |
2003 |
2004 |
|
| Income from continuing operations before income taxes |
$ |
70,549 |
|
$ |
392,838 |
|
$ |
452,900 |
|
|
|
|
| Statutory federal income tax |
$ |
24,692 |
|
$ |
137,493 |
|
$ |
158,515 |
|
|
| State income tax, net of federal benefit |
|
4,829 |
|
|
1,909 |
|
|
9,053 |
|
|
| Federal research and experimental credits |
|
(4,000 |
) |
|
(6,262 |
) |
|
(7,587 |
) |
|
| Non-deductible merger related charges |
|
16,759 |
|
|
2,726 |
|
|
6,532 |
|
|
| Tax exempt interest |
|
(8,710 |
) |
|
(4,271 |
) |
|
(3,950 |
) |
|
| Tax benefit related to divestiture |
|
(25,770 |
) |
|
(2,228 |
) |
|
- |
|
|
| Deferred tax adjustments |
|
- |
|
|
- |
|
|
7,491 |
|
|
| Reversal of reserves |
|
- |
|
|
- |
|
|
(35,694 |
) |
|
| Other, net |
|
9,134 |
|
|
269 |
|
|
1,510 |
|
|
| Total |
$ |
16,934 |
|
$ |
129,636 |
|
$ |
135,870 |
|
|
|
|
Tax savings from deductions associated with our various stock option plans are not reflected in the current federal and state provisions. Savings were approximately $53.2 million in fiscal 2002, $47.8 million in fiscal 2003 and $27.1 million in fiscal 2004. These amounts were credited to stockholders' equity and reduced taxes payable.
Significant deferred tax assets and liabilities were as follows at the dates indicated.
| |
JULY 31, |
|
| (In thousands) |
2003 |
2004 |
|
Deferred tax assets:
Accruals and reserves not currently deductible |
$ |
45,860 |
|
$ |
35,407 |
|
|
| NOL and tax credits carryforward |
|
29,703 |
|
|
22,441 |
|
|
| Unrealized loss on marketable securities |
|
17,714 |
|
|
15,710 |
|
|
| Merger charges |
|
120,082 |
|
|
107,133 |
|
|
| Fixed asset adjustments |
|
10,826 |
|
|
- |
|
|
| Other, net |
|
1,173 |
|
|
- |
|
|
| Total deferred tax assets |
|
225,358 |
|
|
180,691 |
|
|
Deferred tax liabilities:
Fixed asset adjustments |
|
- |
|
|
3,222 |
|
|
| Other, net |
|
- |
|
|
2,812 |
|
|
| Total deferred tax liabilities |
|
- |
|
|
6,034 |
|
|
| Total net deferred tax assets |
|
225,358 |
|
|
174,657 |
|
|
| Valuation reserve |
|
(7,473 |
) |
|
(7,473 |
) |
|
| Total net deferred tax assets, net of valuation reserve |
$ |
217,885 |
|
$ |
167,184 |
|
|
|
|
We have provided a valuation reserve related to the benefits of certain losses in our foreign subsidiaries and certain state capital loss carryforwards that we believe are unlikely to be realized. The valuation allowance decreased by $4.7 million in fiscal 2002 and increased by $0.7 million in fiscal 2003.
The components of total net deferred tax assets, net of valuation reserve, as shown on our balance sheet were as follows at the dates indicated:
| |
JULY 31, |
|
| (In thousands) |
2003 |
2004 |
|
| Current deferred income taxes |
$ |
34,824 |
|
$ |
31,473 |
|
|
| Long-term deferred income taxes |
|
183,061 |
|
|
135,711 |
|
|
| |
$ |
217,885 |
|
$ |
167,184 |
|
|
|
|
At July 31, 2004, we had U.S. federal net operating loss carryforwards of approximately $1.5 million and foreign net operating loss carryforwards of approximately $4.0 million. These net operating losses will expire at various dates beginning in fiscal 2020 if not utilized. At July 31, 2004, we also had various state tax credit carryforwards totaling approximately $14.8 million. The state credit carryforwards have no expiration date. Utilization of the net operating loss and credit carryforwards may be subject to substantial annual limitation due to ownership change limitations provided by the Internal Revenue Code of 1986, as amended. The annual limitation may result in the expiration of net operating losses before utilization.
|
|
|
