Symantec 2007 Annual Report Download - page 114

The principal components of deferred tax assets are as follows:
2007 2006
March 31,
(In thousands)
Deferred tax assets:
Tax credit carryforwards . ................................... $ 50,929 $ 45,911
Net operating loss carryforwards of acquired companies ............. 211,888 274,103
Other accruals and reserves not currently tax deductible ............. 61,192 75,905
Deferred revenue .......................................... 50,499 18,503
Loss on investments not currently tax deductible .................. 16,177 18,313
Book over tax depreciation .................................. 1,331 48,021
State income taxes ........................................ 523 13,738
Convertible Debt .......................................... 201,730 —
Other .................................................. 44,052 38,488
638,321 532,982
Valuation allowance ......................................... (60,117) (66,324)
Deferred tax assets ........................................ 578,204 466,658
Deferred tax liabilities:
Acquired intangible assets ................................... (565,893) (688,857)
Unremitted earnings of foreign subsidiaries ...................... (163,103) (125,996)
Other .................................................. — (2,376)
Net deferred tax (liabilities) assets ............................... $(150,792) $(350,571)
Of the $60 million total valuation allowance provided against our deferred tax assets, approximately
$54 million is attributable to acquisition-related assets, the benefit of which will reduce goodwill when and if
realized. The valuation allowance decreased by $6 million in fiscal 2007, all of which was attributable to
acquisition-related assets, the benefit of which reduced goodwill. The valuation allowance increased by $59 million
in fiscal 2006, of which approximately $58 million was attributable to acquisition-related assets.
As of March 31, 2007, we have net operating loss and credit carryforwards attributable to various acquired
companies of approximately $302 million and $14 million, respectively, which, if not used, will expire between
fiscal 2012 and 2025. These net operating loss carryforwards are subject to an annual limitation under Internal
Revenue Code §382, but are expected to be fully realized. Furthermore, we have state net loss and credit
carryforwards attributable to various acquired companies of approximately $500 million and $34 million, respec-
tively, which will expire in various fiscal years. In addition, we have foreign net operating loss carryforwards
attributable to various acquired foreign companies of approximately $659 million, which, under current applicable
foreign tax law, can be carried forward indefinitely.
As of March 31, 2007, no provision has been made for federal or state income taxes on $1 billion of cumulative
unremitted earnings of certain of our foreign subsidiaries, since we plan to indefinitely reinvest these earnings. As of
March 31, 2007, the unrecognized deferred tax liability for these earnings was $290 million.
In the March 2005 quarter, we repatriated $500 million from certain of our foreign subsidiaries under
provisions of the American Jobs Creation Act of 2004, or the Jobs Act, enacted in October 2004. We recorded a tax
charge for this repatriation of $54 million in the March 2005 quarter.
In May 2005, clarifying language was issued by the U.S. Department of Treasury and the Internal Revenue
Service, or IRS, with respect to the treatment of foreign taxes paid on the earnings repatriated under the Jobs Act and
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SYMANTEC CORPORATION
Notes to Consolidated Financial Statements — (Continued)