Texas Instruments 2014 Annual Report Download - page 50

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FORM 10-K
Included in the non-U.S. effective tax rates reconciling item are benefits from tax holidays of $44 million, $40 million and $51 million in
2014, 2013 and 2012, respectively. The tax benefits relate to our operations in Malaysia and the Philippines, and expire in 2018 and 2017,
respectively. The terms of the Malaysia tax holiday are currently under governmental review as required for the end of the first five years
of the holiday period. We do not expect any potential change in the holiday to have a material impact on the financial statements.
The total provision for 2012 includes $252 million of discrete tax benefits primarily for additional U.S. tax benefits for manufacturing
related to the years 2000 through 2011 and, to a lesser extent, audit adjustments.
The primary components of deferred income tax assets and liabilities were as follows:
December 31,
2014 2013
Deferred income tax assets:
Deferred loss and tax credit carryforwards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 289 $ 345
Accrued expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 248 265
Stock-based compensation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 238 262
Inventories and related reserves . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 157 162
Retirement costs for defined benefit and retiree health care . . . . . . . . . . . . . . . . . . . . . . . . 96 101
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122 148
1,150 1,283
Valuation allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (195) (219)
955 1,064
Deferred income tax liabilities:
Acquisition-related intangibles and fair-value adjustments . . . . . . . . . . . . . . . . . . . . . . . . . (688) (804)
International earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (104) (121)
Property, plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (10) (57)
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (37) (31)
(839) (1,013)
Net deferred income tax asset . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 116 $ 51
The deferred income tax assets and liabilities based on tax jurisdictions are presented on the Consolidated Balance Sheets as follows:
December 31,
2014 2013
Current deferred income tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 347 $ 393
Noncurrent deferred income tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 172 207
Current deferred income tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4) (1)
Noncurrent deferred income tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (399) (548)
Net deferred income tax asset . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 116 $ 51
We make an ongoing assessment regarding the realization of U.S. and non-U.S. deferred tax assets. This assessment is based on our
evaluation of relevant criteria, including the existence of deferred tax liabilities that can be used to absorb deferred tax assets, taxable
income in prior carryback years and expectations for future taxable income. In 2014, we recognized a net decrease of $24 million in our
valuation allowance, due to unutilized tax credits.
We have U.S. and non-U.S. tax loss carryforwards of approximately $108 million, none of which will expire before the year 2024.
A provision has been made for deferred taxes on undistributed earnings of non-U.S. subsidiaries to the extent that dividend payments
from these subsidiaries are expected to result in additional tax liability. The remaining undistributed earnings of approximately
$7.67 billion at December 31, 2014, have been indefinitely reinvested outside of the United States; therefore, no U.S. tax provision
has been made for taxes due upon remittance of these earnings. The indefinitely reinvested earnings of our non-U.S. subsidiaries are
primarily invested in working capital and property, plant and equipment. Determination of the amount of unrecognized deferred income
tax liability is not practical because of the complexities associated with its hypothetical calculation.