Seagate 2008 Annual Report Download - page 103

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Table of Contents
SEAGATE TECHNOLOGY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
6. Income Taxes (Continued)
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial
reporting purposes and the amounts used for income tax purposes. The significant components of the Company's deferred tax assets and
liabilities were as follows:
At July 3, 2009, the deferred tax asset valuation allowance was $1.3 billion reflecting an increase of approximately $880 million in fiscal
year 2009. The increase in valuation allowance resulted primarily from the liquidation of the Company's wholly owned subsidiary, Maxtor,
effective June 1, 2009 and represents the net effects of the extinguishment of all deferred tax assets related to historical carryover tax attributes
of Maxtor and the increase in deferred tax assets related to losses incurred in connection with the liquidation transaction. The net increase in the
valuation allowance in fiscal year 2008 was $34 million and the net decrease in the valuation allowance in fiscal year 2007 was $580 million.
At July 3, 2009, the Company had $469 million of net deferred tax assets. The realization of $416 million of these deferred tax assets is
primarily dependent on the Company's ability to generate
101
(Dollars in millions)
July 3,
2009
June 27,
2008
Deferred Tax Assets
Accrued warranty
$
162
$
156
Inventory valuation accounts
44
44
Receivable reserves
16
15
Accrued compensation and benefits
132
139
Depreciation
140
166
Restructuring allowance
17
13
Other accruals and deferred items
67
110
Net operating losses and tax credit carry
-
forwards
1,151
585
Capitalized research and development
1
29
Other assets
11
13
Total Deferred Tax Assets
1,741
1,270
Valuation allowance
(1,313
)
(433
)
Net Deferred Tax Assets
428
837
Deferred Tax Liabilities
Unremitted earnings of certain foreign entities
(1
)
(4
)
Acquired intangible assets
(11
)
(25
)
Total Deferred Tax Liabilities
(12
)
(29
)
Net Deferred Tax Assets/(Liabilities)
416
808
Deferred taxes on Inter
-
company transactions
53
82
Total Deferred Tax Assets
$
469
$
890
As Reported on the Balance Sheet
Current assets
—
Deferred Income taxes
$
94
$
274
Non
-
current assets
—
Deferred Income Taxes
375
616
Other non
-
current liabilities
—
—
Total Deferred Income Taxes
$
469
$
890