Crucial 2012 Annual Report Download - page 82

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Deferred income taxes reflect the net tax effects of temporary differences between the bases of assets and liabilities for
financial reporting and income tax purposes. Deferred tax assets and liabilities consist of the following as of the end of the
periods shown below:
As of 2012 2011
Deferred tax assets:
Net operating loss and credit carryforwards $ 1,816 $ 1,558
Accrued salaries, wages and benefits 99 99
Deferred income 39 55
Other 76 55
Gross deferred tax assets 2,030 1,767
Less valuation allowance (1,535)(1,220)
Deferred tax assets, net of valuation allowance 495 547
Deferred tax liabilities:
Debt discount (182)(138)
Unremitted earnings on certain subsidiaries (111)(117)
Product and process technology (61)(50)
Property, plant and equipment (38)(107)
Intangible assets (17)(24)
Other (21)(41)
Deferred tax liabilities (430)(477)
Net deferred tax assets $ 65 $ 70
Reported as:
Current deferred tax assets (included in other current assets) $ 19 $ 26
Noncurrent deferred tax assets (included in other noncurrent assets) 47 60
Noncurrent deferred tax liabilities (included in other noncurrent liabilities) (1)(16)
Net deferred tax assets $ 65 $ 70
We have a valuation allowance against substantially all U.S. net deferred tax assets. As of August 30, 2012, our federal,
state and foreign net operating loss carryforwards were $3.5 billion, $2.2 billion and $737 million respectively. If not utilized,
substantially all of our federal and state net operating loss carryforwards will expire in 2023 to 2032 and the foreign net
operating loss carryforwards will begin to expire in 2017. As of August 30, 2012, our federal and state tax credit carryforwards
were $208 million and $203 million, respectively. If not utilized, substantially all of our federal and state tax credit
carryforwards will expire in 2013 to 2032. As a consequence of prior business acquisitions, utilization of the tax benefits for
some of the tax carryforwards is subject to limitations imposed by Section 382 of the Internal Revenue Code and some portion
or all of these carryforwards may not be available to offset any future taxable income.
The changes in valuation allowance of $315 million and $(75) million in 2012 and 2011, respectively, are primarily due to
uncertainties of realizing certain U.S. and foreign net operating losses and certain tax credit carryforwards.
Provision has been made for deferred taxes on undistributed earnings of non-U.S. subsidiaries to the extent that dividend
payments from such companies are expected to result in additional tax liability. Remaining undistributed earnings of
$1.1 billion as of August 30, 2012 have been indefinitely reinvested; therefore, no provision has been made for taxes due upon
remittance of these earnings. Determination of the amount of unrecognized deferred tax liability on these unremitted earnings
is not practicable.