Oracle 2013 Annual Report Download - page 129

Table of Contents
ORACLE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
May 31, 2014
The components of our deferred tax liabilities and assets were as follows:
We provide for United States income taxes on the undistributed earnings and the other outside basis temporary differences of foreign
subsidiaries unless they are considered indefinitely reinvested outside the United States. During the third quarter of fiscal 2012, we increased the
number of foreign subsidiaries in countries with lower statutory rates than the United States, the earnings of which we consider to be indefinitely
reinvested outside the United States. If these subsidiaries generate sufficient earnings in the future, our provision for income taxes may continue
to be favorably affected to a meaningful extent, although any such favorable effects could be significantly reduced under a variety of
circumstances. At May 31, 2014, the amount of temporary differences related to undistributed earnings and other outside basis temporary
differences of investments in foreign subsidiaries upon which United States income taxes have not been provided was approximately $32.4
billion and $6.9 billion, respectively. If these undistributed earnings were repatriated to the United States, or if the other outside basis differences
were recognized in a taxable transaction, they would generate foreign tax credits that would reduce the federal tax liability associated with the
foreign dividend or the otherwise taxable transaction. At May 31, 2014, assuming a full utilization of the foreign tax credits, the potential net
deferred tax liability associated with these temporary differences of undistributed earnings and other outside basis temporary differences would
be approximately $10.0 billion and $2.2 billion, respectively.
Our net deferred tax assets were $1.4 billion and $1.5 billion as of May 31, 2014 and 2013, respectively. We believe it is more likely than not
that the net deferred tax assets will be realized in the foreseeable future. Realization of our net deferred tax assets is dependent upon our
generation of sufficient taxable income in future years in appropriate tax jurisdictions to obtain benefit from the reversal of temporary
differences, net operating
125
May 31,
(in millions)
2014
2013
Deferred tax liabilities:
Unrealized gain on stock
$
(130
)
$
(130
)
Acquired intangible assets
(1,804
)
(1,795
)
Unremitted earnings
(510
)
(249
)
Total deferred tax liabilities
$
(2,444
)
$
(2,174
)
Deferred tax assets:
Accruals and allowances
$
440
$
481
Employee compensation and benefits
1,062
997
Differences in timing of revenue recognition
210
158
Depreciation and amortization
243
243
Tax credit and net operating loss carryforwards
2,810
2,706
Other
96
44
Total deferred tax assets
$
4,861
$
4,629
Valuation allowance
$
(1,053
)
$
(999
)
Net deferred tax assets
$
1,364
$
1,456
Recorded as:
Current deferred tax assets
$
914
$
974
Non
-
current deferred tax assets
837
766
Current deferred tax liabilities (in other current liabilities)
(129
)
(111
)
Non
-
current deferred tax liabilities (in other non
-
current liabilities)
(258
)
(173
)
Net deferred tax assets
$
1,364
$
1,456