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Table of Contents
Amortization of Intangibles
The increase in the Amortization of intangibles was primarily due Maxtor and EVault acquisitions.
Restructuring and Other
During fiscal year 2007, we recorded restructuring costs of approximately $33 million in connection with our ongoing restructuring
activities and reversed $4 million of restructuring accruals relating to the sale of a surplus building impaired in a prior restructuring. These costs
were primarily a result of a restructuring plan established to continue the alignment of our global workforce with existing and anticipated
business requirements, primarily in our U.S. and Far East operations and asset impairments. The restructuring costs were comprised of employee
termination costs of approximately $14 million relating to a reduction in our workforce, approximately $11 million in charges related to impaired
facility improvements and equipment as a result of the alignment plan, and approximately $8 million in charges related to impaired other
intangibles. These restructuring activities are expected to be completed by the end of fiscal year 2008.
Net Other Income (Expense)
Net other income changed by $103 million from net other income of $50 million in fiscal year 2006 to net other expense of $53 million in
fiscal year 2007. The change in Net other income from fiscal year 2006 was primarily due to an increase in interest expense of $81 million
related to our new $1.5 billion long-term debt issued in September 2006, as well as debt acquired in the Maxtor acquisition, and expenses of
$19 million incurred in October 2006 related to the early retirement of our 8% Notes.
Income Taxes
We recorded a benefit from income taxes of $352 million for the fiscal year ended June 29, 2007 compared to a provision for income taxes
of $84 million for the fiscal year ended June 30, 2006. We are a foreign holding company incorporated in the Cayman Islands with foreign and
U.S. subsidiaries that operate in multiple taxing jurisdictions. As a result, our worldwide operating income is either subject to varying rates of tax
or is exempt from tax due to tax holidays or tax incentive programs we operate under in China, Malaysia, Singapore, Switzerland and Thailand.
These tax holidays or incentives are scheduled to expire in whole or in part at various
56
Fiscal Years Ended
(Dollars in millions)
June 29,
2007
June 30,
2006
Change
%
Change
Amortization of intangibles
$
49
$
7
$
42
600
%
Fiscal Years Ended
(Dollars in millions)
June 29,
2007
June 30,
2006
Change
%
Change
Restructuring and other
$
29
$
4
$
25
625
%
Fiscal Years Ended
(Dollars in millions)
June 29,
2007
June 30,
2006
Change
%
Change
Other income (expense), net
$
(53
)
$
50
$
(103
)
-
206
%
Fiscal Years Ended
(Dollars in millions)
June 29,
2007
June 30,
2006
Change
%
Change
Provision for (benefit from) income taxes
$
(352
)
$
84
$
(436
)
-
519
%