Lexmark 2013 Annual Report Download - page 114

2013 2012
Deferred tax assets:
Tax loss carryforwards $ 10.8 $ 12.9
Credit carryforwards 7.5 7.5
Inventories 13.2 14.0
Restructuring 1.2 4.3
Pension and postretirement benefits 52.1 75.2
Warranty 4.3 8.7
Equity compensation 25.6 41.0
Other compensation 21.1 7.1
Foreign exchange 2.0 –
Other 11.1 23.0
Deferred tax liabilities:
Property, plant and equipment (49.8) (37.7)
Intangible assets (68.9) (60.0)
Foreign exchange – (0.8)
30.2 95.2
Valuation allowances (2.9) (4.8)
Net deferred tax assets $ 27.3 $ 90.4
The breakdown between current and long-term deferred tax assets and deferred tax liabilities as of December 31 is as follows:
2013 2012
Current Deferred Tax Assets and Liabilities:
Current Deferred Tax Asset $ 62.9 $ 98.0
Current Deferred Tax Liability (12.2) (17.1)
Net Current Deferred Tax Asset 50.7 80.9
Long-Term Deferred Tax Assets and Liabilities:
Long-Term Deferred Tax Asset 29.7 40.2
Long-Term Deferred Tax Liability (53.1) (30.7)
Net Long-Term Deferred Tax (Liability) Asset (23.4) 9.5
Total Current and Long-Term Net Deferred Tax Asset Balance at December 31 $ 27.3 $ 90.4
The current deferred tax assets and current deferred tax liabilities are included in Prepaid expenses and other current assets and
Accrued liabilities, respectively, on the Consolidated Statements of Financial Position. The long-term deferred tax assets and long-
term deferred tax liabilities are included in Other assets and Other liabilities, respectively, on the Consolidated Statements of
Financial Position.
The Company has federal, state and foreign operating loss carryforwards of $2.5 million, $28.2 million and $30.4 million,
respectively. The state net operating losses are no longer subject to a valuation allowance as the Company believes income will be
sufficient in the future to fully absorb the loss. The state operating loss carryforwards expire in the years 2018 to 2021. The foreign
operating loss carryforwards include $6.0 million with no expiration date. The remainder of the foreign operating loss carryforwards
will expire in the years 2016 to 2025.
The Company has a federal tax credit carryforward of $2.3 million and state tax credit carryforwards of $8.0 million. The state tax
credit carryforwards are subject to a valuation allowance of $1.1 million. The federal tax credit carryforward will expire in 2018. The
state tax credit carryforwards will expire by the year 2026.
Deferred income taxes have not been provided for the undistributed earnings of foreign subsidiaries because such earnings are
indefinitely reinvested. Undistributed earnings of non-U.S. subsidiaries included in the consolidated retained earnings were
approximately $1,623.3 million as of December 31, 2013. It is not practicable to estimate the amount of additional tax that may be
payable on the foreign earnings as there is a significant amount of uncertainty with respect to determining the amount of foreign tax
credits as well as any additional local withholding tax that may arise from the distribution of these earnings. In addition, because such
earnings have been indefinitely reinvested in our foreign operations, repatriation would require liquidation of those investments or a
recapitalization of our foreign subsidiaries, the impact and effects of which are not readily determinable. The Company does not plan
to initiate any action that would precipitate the payment of income taxes.
110