Crucial 2014 Annual Report Download - page 92

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As of August 28, 2014, we had a valuation allowance of $1.29 billion against substantially all U.S. net deferred tax assets,
primarily related to net operating loss carryforwards. The valuation allowance is based on our assessment of the deferred tax
assets that are more likely than not to be realized. As of August 28, 2014, we had partial valuation allowances of $979 million
for Japan and $179 million for our other foreign subsidiaries against net deferred tax assets, primarily related to net operating
loss carryforwards. As of August 28, 2014, we had $3.95 billion of net operating loss carryforwards in Japan of which $2.76
billion is subject to a valuation allowance. Our valuation allowance decreased $712 million in 2014 primarily due to the
utilization of U.S. and foreign net operating losses as well as adjustments based on management's reassessment of the amount
of foreign net operating losses that are more likely than not to be realized.
As of August 28, 2014, our federal, state and foreign net operating loss carryforward amounts and expiration periods as
reported to tax authorities, were as follows:
Year of Expiration U.S. Federal State Japan Other
Foreign Total
2015 - 2019 $ — $ 102 $ 83 $ 513 $ 698
2020 - 2024 — 179 3,862 872 4,913
2025 - 2029 2,081 934 — — 3,015
2030 - 2033 1,812 493 — — 2,305
Indefinite — — — 39 39
$ 3,893 $ 1,708 $ 3,945 $ 1,424 $ 10,970
As of August 28, 2014, our federal and state tax credit carryforward amounts and expiration periods were as follows:
Year of Tax Credit Expiration Federal State Total
2015 - 2019 $ 9 $ 69 $ 78
2020 - 2024 91 55 146
2025 - 2029 78 38 116
2030 - 2034 72 — 72
Indefinite — 31 31
$ 250 $ 193 $ 443
We have not recognized deferred tax assets of $207 million for excess tax benefits that arose directly from tax deductions
related to equity compensation greater than amounts recognized for financial reporting. These excess stock compensation
benefits will be credited to additional paid-in capital if realized. We use the "with and without" method, as described in ASC
740, for purposes of determining when excess tax benefits have been realized.
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 liabilities. Remaining undistributed earnings of
$4.91 billion as of August 28, 2014 have been indefinitely reinvested; therefore, no provision has been made for taxes due on
approximately $6.55 billion of the excess of the financial reporting amount over the tax basis of investments in foreign
subsidiaries that are indefinitely reinvested. Determination of the amount of unrecognized deferred tax liabilities related to
investments in these foreign subsidiaries is not practicable.