EMC 2010 Annual Report Download - page 72
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Table of Contents
EMC CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
Product Warranties
Systems sales include a standard product warranty. At the time of the sale, we accrue for systems' warranty costs. The initial systems' warranty accrual
is based upon our historical experience, expected future costs and specific identification of systems' requirements. Upon expiration of the initial warranty, we
may sell additional maintenance contracts to our customers. Revenue from these additional maintenance contracts is included in deferred revenue and
recognized ratably over the service period. The following represents the activity in our warranty accrual for our standard product warranty (table in
thousands):
Year Ended December 31,
2010 2009 2008
Balance, beginning of the year $ 271,594 $ 269,218 $ 263,561
Provision 120,296 145,517 160,556
Amounts charged to the accrual (155,759) (143,141) (154,899)
Balance, end of the year $ 236,131 $ 271,594 $ 269,218
The provision includes amounts accrued for systems at the time of shipment, adjustments for changes in estimated costs for warranties on systems
shipped in the period and changes in estimated costs for warranties on systems shipped in prior periods. It is not practicable to determine the amounts
applicable to each of the components.
K. Income Taxes
Our provision (benefit) for income taxes consists of (table in thousands):
2010 2009 2008
Federal:
Current $ 518,309 $ 181,578 $ 156,501
Deferred 4,170 7,977 9,681
522,479 189,555 166,182
State:
Current 49,488 13,114 18,387
Deferred (20,419) 13,419 1,128
29,069 26,533 19,515
Foreign:
Current 120,287 30,885 100,879
Deferred (33,538) 5,802 (6,180)
86,749 36,687 94,699
Total provision for income taxes $ 638,297 $ 252,775 $ 280,396
In 2010, 2009 and 2008, we were able to utilize $46.9 million, $68.9 million and $52.6 million, respectively, of net operating loss carryforwards and tax
credits to reduce the current portion of our tax provision.
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