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## NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) 

## APPLIED MATERIALS, INC. 

Deferred tax assets and liabilities are recognized for the estimated future tax effects of temporary differences between the book and tax bases of assets and liabilities. Deferred tax assets are also recognized for net operating loss and tax credit carryovers. Deferred tax assets are offset by a valuation allowance to the extent it is more likely than not that they are not expected to be realized. The components of deferred income tax assets and liabilities were as follows: 

<img src='content_image/1055222.jpg'>

The following table presents a summary of non-current deferred tax assets and liabilities: 

<img src='content_image/1055224.jpg'>

A valuation allowance is recorded to reflect the estimated amount of net deferred tax assets that may not be realized. Changes in the valuation allowance in each fiscal year were as follows: 

<img src='content_image/1055223.jpg'>

