AbbVie 2013 Annual Report Download - page 97
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Deferred Tax Assets and Liabilities
as of December 31 (in millions) 2013 2012
Deferred tax assets
Compensation and employee benefits $ 279 $ 190
Accruals and reserves 252 173
Chargebacks and rebates 333 403
Deferred revenue 348 283
Depreciation 64 42
State income taxes 67 87
Other 122 274
Net operating losses and other credit carryforwards 115 92
Total deferred tax assets 1,580 1,544
Valuation allowances (43) (7)
Total net deferred tax assets $ 1,537 $1,537
Deferred tax liabilities
Excess of book basis over tax basis of intangible assets $ (508) $ (500)
Repatriation of foreign earnings (606) —
Total deferred tax liabilities $(1,114) $ (500)
Net deferred tax asset $ 423 $1,037
In 2013, certain prior period amounts were reclassified to conform with the current period
presentation, primarily in connection with reclassifying prepaid taxes of $777 million associated with
deferred intercompany profit in inventory from current deferred income taxes to prepaid expenses and
other in the combined balance sheet as of December 31, 2012.
As of December 31, 2013 and 2012, the company has loss carryforwards for U.S. tax purposes totaling
approximately $585 million and $419 million, respectively, which are available for use by the company
between 2014 and 2033. As of December 31, 2013, the company has state tax credit carryforwards of
$53 million. As of December 31, 2013 and 2012, the company has loss carryforwards for foreign tax
purposes totaling approximately $95 million and $114 million, respectively. The majority of the foreign
loss carryforwards do not have an expiration period. As of December 31, 2013 and 2012, the company
has recorded valuation allowances of $43 million and $7 million, respectively, related to certain state
net operating losses and credit carryforwards that are not expected to be realized.
Deferred income taxes have not been provided on approximately $21 billion of the undistributed
earnings of foreign subsidiaries as these earnings have been indefinitely reinvested for continued use in
foreign operations. It is not practicable to determine the tax effect of a distribution of these earnings.
Unrecognized Tax Benefits
years ended December 31 (in millions) 2013 2012 2011
Balance as of January 1 $ 1,140 $1,039 $1,645
Increase due to current year tax positions 195 370 294
Increase due to prior year tax positions — 1 149
Decrease due to current year tax positions — — (15)
Decrease due to prior year tax positions — (220) (604)
Settlements — (50) (430)
Separation-related adjustments (1,088) — —
Balance as of December 31 $ 247 $1,140 $1,039
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