Crucial 2013 Annual Report Download - page 98

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Deferred income taxes reflect the net tax effects of temporary differences between the bases of assets and liabilities for
financial reporting and income tax purposes. Deferred tax assets and liabilities consist of the following as of the end of the
periods shown below:
As of 2013 2012
Deferred tax assets:
Net operating loss and credit carryforwards $ 4,048 $ 1,733
Property, plant and equipment 373 16
Accrued salaries, wages and benefits 107 99
Deferred income 39 39
Other 138 92
Gross deferred tax assets 4,705 1,979
Less valuation allowance (3,215)(1,522)
Deferred tax assets, net of valuation allowance 1,490 457
Deferred tax liabilities:
Debt discount (294)(182)
Unremitted earnings on certain subsidiaries (126)(111)
Product and process technology (74)(61)
Other (14)(38)
Deferred tax liabilities (508)(392)
Net deferred tax assets $ 982 $ 65
Reported as:
Current deferred tax assets (included in other current assets) $ 123 $ 19
Noncurrent deferred tax assets 861 47
Current deferred tax liabilities (included in accounts payable and accrued expenses) (2) —
Noncurrent deferred tax liabilities (included in other noncurrent liabilities) — (1)
Net deferred tax assets $ 982 $ 65
The valuation allowance is based on our assessment that it is more likely than not that certain deferred tax assets will not
be realized. We have a valuation allowance against substantially all U.S. net deferred tax assets as well as $1.5 billion related
to our foreign subsidiaries. Elpida represents $912 million of the net deferred tax assets.
As of August 29, 2013, our federal and state net operating loss carryforwards were $4.2 billion and $2.2 billion,
respectively. If not utilized our federal and state net operating loss carryforwards will expire at various dates through 2033. As
of August 29, 2013, our federal and state tax credit carryforwards were $238 million and $203 million, respectively. If not
utilized our federal and state tax credit carryforwards will expire at various dates through 2033.
As of August 29, 2013, our foreign net operating loss carryforwards were $7.0 billion, of which $5.9 billion pertains to
Elpida. Our foreign net operating loss carryforwards will expire at various dates through 2023. We have placed a valuation
allowance against $4.7 billion of these foreign net operating loss carryforwards, of which $3.8 billion pertains to Elpida. This
partial valuation allowance against foreign net operating loss carryforwards, which is primarily attributable to Elpida, results
from our current projections of taxable income, being more likely than not, insufficient to utilize the full amount of the net
operating loss deferred tax assets.
We have approximately $67 million of net tax benefits related to excess stock compensation benefits, which are not
recorded as deferred tax assets. These excess stock compensation benefits will be credited to additional paid-in capital when
recognized. We use the "with and without" method, as described in ASC 740, for purposes of determining when excess tax
benefits have been realized.