AMD 2014 Annual Report Download - page 92

United States. In 2013, the net valuation allowance decreased by $26 million primarily for decreases in deferred
tax assets related to the utilization of net operating losses due to pre-tax book income in Canada. In 2012, the net
valuation allowance increased by $423 million primarily for increases in deferred tax assets related to the net
operating losses generated from pre-tax book losses net of the benefit relating to the SeaMicro acquisition.
Purchase accounting for the SeaMicro acquisition required the establishment of a deferred tax liability related to
the book tax basis differences of identifiable intangible assets that increased goodwill. The deferred tax liability
created an additional source of U.S. future taxable income which resulted in a release of a portion of the
Company’s U.S. valuation allowance.
As of December 27, 2014 and December 28, 2013, the Company had $127 million and $191 million,
respectively, of deferred tax assets subject to a valuation allowance that related to excess stock option deductions,
which are not presented in the deferred tax asset balances. As of December 27, 2014 and December 28, 2013,
$10 million of deferred tax assets subject to valuation allowance related to a deductible discount for tax only
associated with the Company’s 6.00% Convertible Senior Notes due 2015 (the 6.00% Notes). The tax benefit
from these deductions will increase capital in excess of par when realized, if at all.
The following is a summary of the various tax attribute carryforwards the Company had as of December 27,
2014. The amounts presented below include amounts related to excess stock option deductions, as discussed
above.
Carryforward Federal
State /
Provincial Expiration
(In millions)
U.S.-net operating loss carryovers .................................. $5,432 $231 2015 to 2034
U.S.-credit carryovers ............................................ $ 403 $193 2018 to 2034
Canada-net operating loss carryovers ................................ $ 217 $217 2025 to 2028
Canada-credit carryovers ......................................... $ 357 $ 31 2021 to 2034
Canada-R&D pools .............................................. $ 154 $154 no expiration
Barbados-net operating loss carryovers .............................. $ 198 N/A 2015 to 2017
Other foreign net operating loss carryovers ........................... $ 5 N/A various
Utilization of $17 million of the Company’s U.S. federal net operating loss carryforwards are subject to
annual limitations as a result of the ATI Technologies ULC (ATI) acquisition.
The table below displays reconciliation between statutory federal income taxes and the total provision
(benefit) for income taxes.
2014 2013 2012
(In millions)
Statutory federal income tax benefit at 35% rate ........... $ (139) $ (26) $ (426)
State taxes, net of federal benefit ....................... 1 1 1
Foreign (income) expense at other than U.S. rates .......... 1 15 (13)
U.S. valuation allowance generated ..................... 144 22 406
Credit monetization .................................. (2) (3) (2)
Provision (benefit) for income taxes ..................... $ 5 $ 9 $ (34)
The Company has made no provision for U.S. income taxes on approximately $349 million of cumulative
undistributed earnings of certain foreign subsidiaries through December 27, 2014 because it is the Company’s
intention to indefinitely reinvest such earnings. If such earnings were distributed, the Company would incur
additional income taxes of approximately $122 million (after an adjustment for foreign tax credits). These
additional income taxes may not result in income tax expense or a cash payment to the Internal Revenue Service,
but may result in the utilization of deferred tax assets that are currently subject to a valuation allowance.
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