Apple 2000 Annual Report Download - page 54

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 5--INCOME TAXES (CONTINUED)
As of September 30, 2000 and September 25, 1999, the significant components of the Company's deferred tax assets and liabilities were (in
millions):
As of September 30, 2000, the Company had operating loss carryforwards for federal tax purposes of approximately $54 million, which expire
in 2012. This does not include approximately $79 million of remaining operating loss carryforwards acquired from NeXT, which expire in
2009 -
2012, and the utilization of which is subject to certain limitations imposed by the Internal Revenue Code. The Company also has Federal
credit carryforwards and various state and foreign tax loss and credit carryforwards, the tax effect of which is approximately $129 million and
which expire between 2001 and 2015. The remaining benefits from tax losses and credits do not expire. As of September 30, 2000, a valuation
allowance of $33 million was recorded against the deferred tax asset for the benefits of tax losses that may not be realized. The valuation
allowance relates primarily to the operating loss carryforwards acquired from NeXT. The net change in the total valuation allowance in 2000
was a decrease of $27 million. Management believes it is more likely than not that forecasted income, including income that may be generated
as a result of certain tax planning strategies, will be sufficient to fully recover the remaining net deferred tax assets.
51
2000 1999
-------- --------
Deferred tax assets:
Accounts receivable and inventory reserves................ $ 24 $ 31
Accrued liabilities and other reserves.................... 97 77
Basis of capital assets and investments................... 65 67
Tax losses and credits.................................... 280 438
----- ----
Total deferred tax assets................................. 466 613
Less valuation allowance.................................... 33 60
----- ----
Net deferred tax assets..................................... 433 553
----- ----
Deferred tax liabilities:
Unremitted earnings of subsidiaries....................... 480 442
Available-for-sale securities............................. 174 84
Other..................................................... 19 12
----- ----
Total deferred tax liabilities............................ 673 538
----- ----
Net deferred tax asset (liability).......................... $(240) $ 15
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