SanDisk 2010 Annual Report Download - page 221

This is a TAB type table. Insert
conts here. Annual Report
Notes To Consolidated Financial Statements
Income (loss) before provision for income taxes consisted of the following (in thousands):
Fiscal Years Ended
January 2,
2011
January 3,
2010
December 28,
2008
United States .............................................. $ 1,273,081 $ 412,646 $ (1,908,020)
International ............................................... 184,352 91,155 (44,354)
Total ................................................. $ 1,457,433 $ 503,801 $ (1,952,374)
The Company’s provision for income taxes differs from the amount computed by applying the federal
statutory rates to income (loss) before taxes as follows:
Fiscal Years Ended
January 2,
2011
January 3,
2010
December 28,
2008
U.S. federal statutory rate ..................................... 35.0% 35.0% 35.0%
State taxes, net of federal benefit ............................... (0.6) 0.8 0.5
Non-deductible share-based compensation expense ................. 0.2 1.9 (0.7)
Impairment of goodwill ...................................... — — (17.9)
Valuation allowance ......................................... (17.4) (8.0) (18.5)
Tax-exempt interest income ................................... (0.7) (2.2) 1.1
Foreign earnings at other than U.S. rates ......................... (5.1) (10.8) (1.0)
Other ..................................................... (0.6) 0.9 (0.3)
Effective income tax rates ................................. 10.8% 17.6% (1.8)%
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 return reporting
purposes. Significant components of the Company’s net deferred tax assets as of January 2, 2011 and January 3,
2010 were as follows (in thousands):
January 2,
2011
January 3,
2010
Deferred tax assets:
Deferred income on shipments to distributors and retailers and deferred revenue
recognized for tax purposes .......................................... $ 35,119 $ 25,975
Accruals and reserves not currently deductible ............................. 77,998 125,112
Depreciation and amortization not currently deductible ...................... 41,434 56,141
Deductible share-based compensation .................................... 66,961 65,281
Unrealized loss on investments ......................................... 18,105 36,189
Unrealized foreign exchange loss ........................................ 78,753 71,478
Net operating loss carryforwards ........................................ 25,215 26,083
Tax credit carryforward ............................................... 6,072 60,315
Other .............................................................. 21,748 27,359
Gross deferred tax assets .............................................. 371,405 493,933
Valuation allowance ...................................................... (11,198) (321,132)
Deferred tax assets, net of valuation allowance ................................. 360,207 172,801
Deferred tax liabilities:
Acquired intangible assets ............................................. (5,685) (11,152)
Unrealized gain on investments ......................................... (16,913) (25,852)
Unrealized foreign exchange gain ....................................... (92,144) (56,920)
U.S. taxes provided on unremitted earnings of foreign subsidiaries ............. (28,844) (26,338)
Total deferred tax liabilities ................................................ (143,586) (120,262)
Net deferred tax assets .................................................... $ 216,621 $ 52,539
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