NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) Deferred income tax assets and liabilities consist of the tax effects of temporary differences related to the following (in thousands): Fiscal Years Ended September 30, 2011 October 1, 2010 Deferred Tax Assets: Current: Inventory .................................................. $ 4,181 $ 4,451 Bad debts .................................................. 162 427 Accrued compensation and benefits ............................. 3,946 2,536 Product returns, allowances and warranty ......................... 1,222 572 Restructuring ............................................... 515 794 Other — net ................................................ 998 943 Current deferred tax assets .................................. 11,024 9,723 Less valuation allowance ................................... (2,431) (2,130) Net current deferred tax assets ............................. 8,593 7,593 Long-term: Intangible assets ............................................ 7,660 9,422 Retirement benefits and deferred compensation .................... 27,921 21,327 Net operating loss carry forwards ............................... 22,143 6,120 Federal tax credits ........................................... 37,717 28,243 State investment credits ....................................... 26,111 24,173 Long-term deferred tax assets ................................ 121,552 89,285 Less valuation allowance ................................... (36,943) (23,480) Net long-term deferred tax assets ........................... 84,609 65,805 Deferred tax assets .................................... 132,576 99,008 Less valuation allowance ............................... (39,374) (25,610) Net deferred tax assets .................................. 93,202 73,398 Deferred Tax Liabilities: Current: Prepaid insurance ........................................... (723) (724) Current deferred tax liabilities ................................ (723) (724) Long-term: Property, plant and equipment ................................. (18,084) (4,636) Other — net ................................................ (208) (272) Intangible assets ............................................ (5,943) (329) Long-term deferred tax liabilities ............................. (24,235) (5,237) Net deferred tax liabilities ............................... (24,958) (5,961) Total deferred tax assets ................................ $ 68,244 $ 67,437 In accordance with GAAP, management has determined that it is more likely than not that a portion of its historic and current year income tax benefits will not be realized. As of September 30, 2011, the Company has maintained a valuation allowance of $39.4 million. This valuation allowance is comprised of $26.1 million related to U.S. State tax credits and $13.3 million related to foreign deferred tax assets of which $11.6 million are foreign deferred tax assets acquired from SiGe. If these benefits are recognized in a future period the valuation Page 108 Skyworks / Annual Report 2011