AMD 2013 Annual Report Download - page 96

Canada. In 2012, the net valuation allowance increased by $423 million primarily for increases in deferred tax
assets related to the net operating losses generated from pre-tax book losses net of the benefit relating to the
SeaMicro acquisition. Purchase accounting for the SeaMicro acquisition required the establishment of a deferred
tax liability related to the book tax basis differences of identifiable intangible assets that increased goodwill. The
deferred tax liability created an additional source of U.S. future taxable income which resulted in a release of a
portion of the Company’s U.S. valuation allowance. In 2011, the net valuation allowance decreased by $245
million primarily for decreases in deferred tax assets related to the utilization of net operating losses due to pre-
tax book income and a change in the book to tax basis in investments.
As of December 28, 2013 and December 29, 2012, the Company had $191 million and $192 million,
respectively, of deferred tax assets subject to a valuation allowance that related to excess stock option deductions,
which are not presented in the deferred tax asset balances. As of December 28, 2013 and December 29, 2012,
$10 million of deferred tax assets subject to valuation allowance related to a deductible discount for tax only
associated with the Company’s 6.00% Convertible Senior Notes due 2015 (the 6.00% Notes). The tax benefit
from these deductions will increase capital in excess of par when realized.
The following is a summary of the various tax attribute carryforwards the Company had as of December 28,
2013. The amounts presented below include amounts related to excess stock option deductions, as discussed
above.
Carryforward Federal
State /
Provincial Expiration
(In millions)
U.S.-net operating loss carryovers .................................. $4,598 $269 2018 to 2033
U.S.-credit carryovers ............................................ $ 399 $188 2018 to 2033
Canada-net operating loss carryovers ................................ $ 355 $355 2025 to 2028
Canada-credit carryovers ......................................... $ 387 $ 34 2021 to 2033
Canada-R&D pools .............................................. $ 82 $ 82 noexpiration
Barbados-net operating loss carryovers .............................. $ 287 N/A 2014 to 2017
Other foreign net operating loss carryovers ........................... $ 8 N/A various
Utilization of $17 million of the Company’s U.S. federal net operating loss carryforwards are subject to
annual limitations as a result of the ATI Technologies ULC (ATI) acquisition.
The table below displays reconciliation between statutory federal income taxes and the total provision
(benefit) for income taxes.
2013 2012 2011
(In millions)
Statutory federal income tax provision (benefit) at 35% rate ..... $(26) $(426) $ 172
State taxes, net of federal benefit .......................... 1 1 1
Foreign income at other than U.S. rates ..................... 15 (13) (2)
U.S. valuation allowance generated (utilized) ................ 22 406 (171)
Credit monetization ..................................... (3) (2) (4)
Provision (benefit) for income taxes ........................ $ 9 $ (34) $ (4)
The Company has made no provision for U.S. income taxes on approximately $354 million of cumulative
undistributed earnings of certain foreign subsidiaries through December 28, 2013 because it is the Company’s
intention to permanently reinvest such earnings. If such earnings were distributed, the Company would incur
additional income taxes of approximately $124 million (after an adjustment for foreign tax credits). These
additional income taxes may not result in income tax expense or a cash payment to the Internal Revenue Service,
but may result in the utilization of deferred tax assets that are currently subject to a valuation allowance.
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