Eli Lilly 2012 Annual Report Download - page 82

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Significant components of our deferred tax assets and liabilities as of December 31 are as follows:
2012 2011
Deferred tax assets
Compensation and benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,081.8 $ 1,286.5
Tax credit carryforwards and carrybacks. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 703.2 695.3
Tax loss carryforwards and carrybacks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 370.1 406.1
Asset purchases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 366.8 386.2
Sale of intangibles. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 278.6 207.1
Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 232.8 214.9
Intercompany profit in inventories. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 159.6 277.2
Product return reserves. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 153.8 146.2
Contingencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113.2 94.5
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 361.5 292.8
Total gross deferred tax assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,821.4 4,006.8
Valuation allowances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (675.8) (611.9)
Total deferred tax assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,145.6 3,394.9
Deferred tax liabilities
Unremitted earnings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (920.4) (940.2)
Intangibles. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (708.8) (797.6)
Inventories. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (573.4) (489.2)
Property and equipment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (407.1) (451.0)
Financial instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (257.0) (196.9)
Total deferred tax liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,866.7) (2,874.9)
Deferred tax assets - net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 278.9 $ 520.0
At December 31, 2012 and 2011, no individually significant items were classified as “Other” deferred tax
assets.
The deferred tax asset and related valuation allowance amounts for U.S. federal and state net operating
losses and tax credits shown above have been reduced for differences between financial reporting and tax
return filings.
Based on filed tax returns, we have tax credit carryforwards and carrybacks of $973.2 million available to
reduce future income taxes; $433.4 million will be carried back; $0.7 million of the tax credit carryforwards
will expire between 10 and 20 years; and $3.7 million of the tax credit carryforwards will never expire. The
remaining portion of the tax credit carryforwards is related to federal tax credits of $80.3 million, international
tax credits of $93.6 million, and state tax credits of $361.5 million, all of which are substantially reserved.
At December 31, 2012, based on filed tax returns we had net operating losses and other carryforwards for
international and U.S. income tax purposes of $737.5 million: $309.7 million will expire within 5 years;
$394.5 million will expire between 5 and 20 years; and $33.4 million of the carryforwards will never expire.
Deferred tax assets related to state net operating losses of $100.7 million and $16.4 million of other state
carryforwards are substantially reserved.
Domestic and Puerto Rican companies contributed approximately 54 percent, 24 percent, and 45 percent for
the years ended December 31, 2012, 2011, and 2010, respectively, to consolidated income before income
taxes. We have a subsidiary operating in Puerto Rico under a tax incentive grant. The current tax incentive
grant will not expire prior to 2017.
At December 31, 2012, we had an aggregate of $20.98 billion of unremitted earnings of foreign subsidiaries
that have been or are intended to be permanently reinvested for continued use in foreign operations and that,
if distributed, would result in additional income tax expense at approximately the U.S. statutory rate.
Cash payments of income taxes totaled $992.0 million, $943.0 million, and $861.0 million, for the years ended
December 31, 2012, 2011, and 2010, respectively.