Toshiba 2004 Annual Report Download - page 61

59
Thousands of
Millions of yen U.S. dollars
Years ended March 31 200 4 2003 2004
Expected income tax expense ¥ 63,673 ¥ 22,365 $ 600,689
Increase (decrease) in taxes resulting from:
Dividends 11,245 10,799 106,085
Non-deductible expenses for tax purposes 6 ,134 5,076 57 ,868
Net changes in valuation allowance 17,114 15,571 161,453
Tax rate difference relating to foreign subsidiaries (4,187) (7,155) (39,500)
Effect of income tax rate change 3,14 2 4,373 29,642
Other 5,116 (2,497) 48,2 63
Income tax expense ¥102,23 7 ¥ 48,532 $ 964,50 0
The significant components of deferred tax assets and deferred tax liabilities as of March 31, 2004 and 2003 are as
follows:
Thousands of
Millions of yen U.S. dollars
March 3 1 2004 2003 2004
Gross deferred tax assets:
Inventories ¥ 22,583 ¥ 24,970 $ 213,047
Accrued pension and severance costs 107,187 103,998 1 ,011,198
Tax loss carryforwards 127,0 45 194,248 1,198,5 38
Minimum pension liability adjustment 167,189 298,303 1,57 7,255
Accrued bonus 45,214 38,920 426,547
Depreciation and amortization 38,873 34,528 366,726
Other 116,7 80 107,176 1,10 1,698
624,871 802,143 5 ,895,009
Valuation allowance for deferred tax assets (81,2 97) (65,880) (766,953)
Deferred tax assets ¥543,574 ¥736,263 $5,128,056
Thousands of
Millions of yen U.S. dollars
March 3 1 2004 2003 2004
Gross deferred tax liabilities:
Retained earnings appropriated for tax allowable reserves ¥ (15,525 ) ¥ (12,888) $ (146,462)
Unrealized gains on securities (17,31 2) (12,341) (163,321)
Gain on securities contributed to employee retirement
benefit trusts (17,38 1) (17,257) (163,972)
Other (13,774) (16,299) (12 9,943)
Deferred tax liabilities (63,992) (58,785) (603,698)
Net deferred tax assets ¥479,582 ¥677,478 $4,52 4,358
The net changes in the total valuation allowance for the years ended March 31, 2004 and 2003 were an increase of
¥15,417 million ($145,443 thousand) and a decrease of ¥11,764 million, respectively.
The Company’s tax loss carryforwards for each of the corporate and local taxes at March 31, 2004 amounted to
¥283,909 million ($2,678,387 thousand) and ¥353,950 million ($3,339,151 thousand), respectively, the majority of
which will expire during the period from 2005 through 2011. The Company utilized tax loss carryforwards of
¥176,481 million ($1,664,915 thousand) and ¥140,953 million ($1,329,745 thousand) to reduce current corporate
and local taxes, respectively, during the year ended March 31, 2004.
Realization of tax loss carryforwards and other deferred tax assets is dependent on the Company generating
sufficient taxable income prior to their expiration or the Company exercising certain available tax strategies. Although
realization is not assured, management believes it is more likely than not that all of the deferred tax assets, less the
valuation allowance, will be realized. The amount of such net deferred tax assets considered realizable, however, could
be reduced in the near term if estimates of future taxable income during the carryforward period are reduced.
Deferred income tax liabilities have not been provided on undistributed earnings of foreign subsidiaries and
affiliates deemed indefinitely reinvested in foreign operations. As of March 31, 2004, and 2003, the undistributed