Western Digital 2008 Annual Report Download - page 82

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(1) The first quarter of 2008 included $60 million for taxes related to the license of intellectual property to subsidiaries
and $49 million for acquired in-process research and development. The fourth quarter of 2008 included $15 million
for taxes related to the license of intellectual property to subsidiaries.
(2) The fourth quarter of 2007 included a $126 million benefit to income taxes from an adjustment to the valuation
allowance for deferred income taxes. This benefit is net of an adjustment made in the fourth quarter to reduce the
deferred tax asset and the related valuation allowance by approximately $21 million to correct the amount of state
deferred tax asset recognized in prior periods. As both the deferred tax asset and the related valuation allowance were
overstated in prior periods, there was no net effect to the total assets or net income as reported in those prior periods,
or in the fourth quarter of 2007.
76
WESTERN DIGITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)