AMD 2011 Annual Report Download - page 101

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Deferred income taxes reflect the net tax effects of tax carryovers and temporary differences between the
carrying amounts of assets and liabilities for financial reporting purposes and the balances for income tax
purposes. Significant components of the Company’s deferred tax assets and liabilities as of December 31, 2011
and December 25, 2010 are as follows:
December 31,
2011
December 25,
2010
(In millions)
Deferred tax assets:
Net operating loss carryovers ....................... $ 991 $ 948
Deferred distributor income ........................ 63 60
Inventory valuation .............................. 25 31
Accrued expenses not currently deductible ............ 111 88
Acquired intangibles ............................. 427 460
Tax deductible goodwill .......................... 375 427
Investments .................................... — 157
Federal and state tax credit carryovers ............... 358 348
Foreign capitalized research and development costs ..... 85 49
Foreign research and development ITC credits ......... 272 265
Discount of convertible notes ...................... 59 126
Other ......................................... 275 289
Total deferred tax assets ....................... 3,041 3,248
Less: valuation allowance ......................... (2,978) (3,223)
63 25
Deferred tax liabilities:
Capitalized interest ............................... (1) (4)
Acquired intangibles ............................. — (1)
Investments .................................... (31) —
Other ......................................... (17) (7)
Total deferred tax liabilities .................... (49) (12)
Net deferred tax assets ................................ $ 14 $ 13
The breakdown between current and long-term deferred tax assets and deferred tax liabilities as of
December 31, 2011 and December 25, 2010 is as follows:
December 31,
2011
December 25,
2010
(In millions)
Current deferred tax assets ............................. $ 1 $—
Non-current deferred tax assets ......................... 13 17
Current deferred tax liabilities .......................... — (4)
Net deferred tax assets ................................ $ 14 $ 13
Current deferred tax assets and current deferred tax liabilities are included in captions “Prepaid expenses
and other current assets” and “Accrued Liabilities”, respectively, on the consolidated balance sheet. Non-current
deferred tax assets and non-current deferred tax liabilities are included in captions “Other assets” and “Other
long-term liabilities”, respectively, on the consolidated balance sheet.
As of December 31, 2011, substantially all of the Company’s U.S. and foreign deferred tax assets, net of
deferred tax liabilities, continued to be subject to a valuation allowance. The realization of these assets is
dependent on substantial future taxable income which, at December 31, 2011, in management’s estimate, is not
more likely than not to be achieved. In 2011, the net valuation allowance decreased by $245 million primarily for
decreases in deferred tax assets related to the utilization of net operating losses due to pre-tax book income and a
change in the book to tax basis in investments. In 2010, the net valuation allowance decreased by $56 million
primarily for decreases in deferred tax assets related to the utilization of net operating losses due to pre-tax book
income and the utilization of foreign research and development credits to offset prior period audit adjustments,
95