OfficeMax 2012 Annual Report Download - page 101

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and
deferred tax liabilities at year-end are presented in the following table:
2012 2011
(thousands)
Impairment of note receivable .............................................. $ — $278,269
Minimum tax and other credits carryover ..................................... 121,434 228,224
Net operating loss carryovers ............................................... 31,798 151,787
Deferred gain on Boise Investment .......................................... 68,936 68,936
Compensation obligations ................................................. 177,784 172,403
Operating reserves and accrued expenses ..................................... 50,239 55,679
Investments and deferred charges ........................................... 5,901 3,441
Property and equipment ................................................... — 1,558
Allowances for receivables ................................................. 12,358 12,306
Inventory ............................................................... 6,258 4,216
Tax goodwill ............................................................ 1,319 2,907
Other .................................................................. — 6,891
Total deferred tax assets ................................................... $476,027 $ 986,617
Valuation allowance on NOLs and credits ..................................... $ (30,665) $ (25,543)
Total deferred tax assets after valuation allowance .............................. $445,362 $ 961,074
Timberland installment gain related to Wachovia Guaranteed Installment Note ....... $(260,040) $(260,040)
Timberland installment gain related to Lehman Guaranteed Installment Note ......... — (269,284)
Property and equipment ................................................... (3,290) —
Undistributed earnings .................................................... (6,238) (5,823)
Other .................................................................. (3,157) —
Total deferred tax liabilities ................................................ $(272,725) $(535,147)
Total net deferred tax assets ................................................ $172,637 $ 425,927
Deferred tax assets and liabilities are reported in our Consolidated Balance Sheets as follows:
2012 2011
(thousands)
Current deferred income tax assets ............................................ $ 63,878 $ 55,488
Long-term deferred income tax assets ......................................... 108,759 370,439
Total net deferred tax assets ............................................. $172,637 $425,927
In assessing the value of deferred tax assets, management considers whether it is more likely than not that
some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is
dependent upon the generation of future taxable income during the periods in which those temporary differences
become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future
taxable income, and tax planning strategies in making the assessment of whether it is more likely than not that
some portion or all of the deferred tax assets will not be realized. Management believes it is more likely than not
that the Company will realize the benefits of these deductible differences, except for certain state net operating
losses and other credit carryforwards as noted below. The amount of the deferred tax assets considered realizable,
however, could be reduced if estimates of future taxable income during the carryforward period are reduced.
During 2011, the Company restructured its domestic entities to better support operations resulting in a reduction
in the tax rate related to certain deferred items which was offset by the impairment of state net operating losses.
The Company has a deferred tax asset related to alternative minimum tax credit carryforwards of
approximately $100 million, which are available to reduce future regular federal income taxes, if any, over an
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