Seagate 2014 Annual Report Download - page 52
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IncomeTaxes
Werecordedanincometaxprovisionof$228millionforfiscalyear2015comparedtoanincometaxbenefitof$14millionforfiscalyear2014.Ourfiscal
year2015incometaxprovisionincludedapproximately$193millionofnetincometaxexpenseduetothefinalauditassessmentreceivedfromtheJiangsu
ProvinceStateTaxBureauofthePeople'sRepublicofChina(Chinaassessment)forcalendaryears2007through2013.Ourfiscalyear2014benefitfromincome
taxesincluded$58millionofincometaxbenefitsrelatedtothereversalofaportionofthevaluationallowancesrecordedinpriorperiodsandanetdecreaseintax
reservesrelatedtoauditsettlementsoffsetbytaxreservesonnon-U.S.taxpositionstakeninpriorfiscalyears.
OurIrishtaxresidentparentholdingcompanyownsvariousU.S.andnon-U.S.subsidiariesthatoperateinmultiplenon-Irishincometaxjurisdictions.Our
worldwideoperatingincomeiseithersubjecttovaryingratesofincometaxorisexemptfromincometaxduetotaxholidayprogramsweoperateunderin
Malaysia,SingaporeandThailand.Thesetaxholidaysarescheduledtoexpireinwholeorinpartatvariousdatesthrough2022.
Ourincometaxprovisionrecordedforfiscalyear2015differedfromtheprovisionforincometaxesthatwouldbederivedbyapplyingtheIrishstatutoryrate
of25%toincomebeforeincometaxes,primarilyduetotheneteffectof(i)taxbenefitsrelatedtonon-U.S.earningsgeneratedinjurisdictionsthataresubjecttotax
holidaysortaxincentiveprogramsandareconsideredindefinitelyreinvestedoutsideofIreland,(ii)taxexpenseassociatedwiththeChinaassessmentrecorded
duringtheDecember2014quarter,and(iii)anincreaseinvaluationallowanceforcertaindeferredtaxassets.TheacquisitionofLSI'sFlashBusinessdidnothave
amaterialimpactonoureffectivetaxrate.Ourincometaxbenefitrecordedforfiscalyear2014differedfromtheprovisionforincometaxesthatwouldbederived
byapplyingtheIrishstatutoryrateof25%toincomebeforeincometaxes,primarilyduetotheneteffectof(i)taxbenefitsrelatedtonon-U.S.earningsgenerated
injurisdictionsthataresubjecttotaxholidaysortaxincentiveprogramsandareconsideredindefinitelyreinvestedoutsideofIreland,and(ii)adecreasein
valuationallowanceforcertaindeferredtaxassets.TheacquisitionofXyratexdidnothaveamaterialimpactonoureffectivetaxrateinfiscalyear2014.Fiscal
year2014includedavaluationallowancereleaseassociatedwithpost-acquisitionrestructuring.
Basedonournon-U.S.ownershipstructureandsubjectto(i)potentialfutureincreasesinourvaluationallowancefordeferredtaxassets;and(ii)afuture
changeinourintentiontoindefinitelyreinvestearningsfromoursubsidiariesoutsideofIreland,weanticipatethatoureffectivetaxrateinfutureperiodswill
generallybelessthantheIrishstatutoryrate.
AtJuly3,2015,ourdeferredtaxassetvaluationallowancewasapproximately$929million.
AtJuly3,2015,wehadnetdeferredtaxassetsof$612million.Therealizationofthesedeferredtaxassetsisprimarilydependentonourabilitytogenerate
sufficientU.S.taxableincomeinfutureperiods.Althoughrealizationisnotassured,webelievethatitismorelikelythannotthatthesedeferredtaxassetswillbe
realized.Theamountofdeferredtaxassetsconsideredrealizable,however,mayincreaseordecreaseinsubsequentperiodswhenwere-evaluatetheunderlying
basisforourestimatesoffutureU.S.andcertainnon-U.S.taxableincome.
AsofJuly3,2015,approximately$422millionand$90millionofourtotalU.S.netoperatinglossandtaxcreditcarryforwards,respectively,aresubjectto
anaggregateannuallimitationof$46millionpursuanttoU.S.taxlaw.
49
FiscalYearsEnded
(Dollarsinmillions)
July3,
2015
June27,
2014 Change
%
Change
Provisionfor(benefitfrom)incometaxes $ 228 $ (14) $ 242 1,729%