Electronic Arts 1999 Annual Report Download - page 42

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(f) Other Business Combinations
Additionally, during the quarter ended June 30, 1998, the Company acquired two software development companies.
In connection with these acquisitions, the Company incurred a charge of $2,279,000 for acquired in-process technology.
The charge was made after the Company concluded that the in-process technology had not reached technological feasi-
bility and had no alternative future use after taking into consideration the potential for usage of the software in different
products and resale of the software.
NOTE 12: INCOME TAXES
The Company’s pretax income from operations for the fiscal years ended March 31, 1999, 1998 and 1997 consisted of the
following components:
(In thousands) 1999 1998 1997
Domestic $ 79,789 $ 51,620 $ 27,614
Foreign 38,669 56,640 48,434
Total pretax income $118,458 $108,260 $ 76,048
Income tax expense (benefit) for the fiscal years ended March 31, 1999, 1998 and 1997 consisted of:
(In thousands) Current Deferred Total
1999:
Federal $ 31,204 $(10,340) $ 20,864
State 4,401 (2,590) 1,811
Foreign 15,715 1,410 17,125
Charge in lieu of taxes
from employee stock plans 5,614 – 5,614
$ 56,934 $ (11,520) $ 45,414
1998:
Federal $ 14,751 $ (7,585) $ 7,166
State 1,361 (727) 634
Foreign 18,561 1,434 19,995
Charge in lieu of taxes
from employee stock plans 7,931 – 7,931
$ 42,604 $ (6,878) $ 35,726
1997:
Federal $ 3,145 $ (3,472) $ (327)
State 804 (674) 130
Foreign 16,543 447 16,990
Charge in lieu of taxes
from employee stock plans 9,210 – 9,210
$ 29,702 $ (3,699) $ 26,003