Crucial 2015 Annual Report Download - page 85

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83
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 as well as carryforwards. Deferred tax assets and liabilities consist of the
following:
As of 2015 2014
Deferred tax assets:
Net operating loss and tax credit carryforwards $ 2,869 $ 3,162
Accrued salaries, wages and benefits 143 152
Other accrued liabilities 97 113
Property, plant and equipment — 284
Other 86 104
Gross deferred tax assets 3,195 3,815
Less valuation allowance (2,051)(2,443)
Deferred tax assets, net of valuation allowance 1,144 1,372
Deferred tax liabilities:
Debt discount (207)(291)
Unremitted earnings on certain subsidiaries (162)(115)
Product and process technology (43)(29)
Other (57)(67)
Deferred tax liabilities (469)(502)
Net deferred tax assets $ 675 $ 870
Reported as:
Current deferred tax assets (included in other current assets) $ 104 $ 228
Noncurrent deferred tax assets 597 816
Current deferred tax liabilities (included in accounts payable and accrued expenses) (4)(4)
Noncurrent deferred tax liabilities (included in other noncurrent liabilities) (22)(170)
Net deferred tax assets $ 675 $ 870
As of September 3, 2015, we had a valuation allowance of $1.16 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 September 3, 2015, we had partial valuation allowances of
$710 million for Japan and $177 million for our other foreign subsidiaries against net deferred tax assets, primarily related to
net operating loss carryforwards. As of September 3, 2015, we had $3.81 billion of net operating loss carryforwards in Japan of
which $2.19 billion is subject to a valuation allowance. Our valuation allowance decreased $392 million in 2015 primarily due
to the utilization of U.S. and foreign net operating losses as well as adjustments based on management's assessment of the
amount of foreign net operating losses that are more likely than not to be realized.
We have a full valuation allowance for our net deferred tax asset associated with our U.S. operations. Management
continues to evaluate future projected financial performance to determine whether such performance is sufficient evidence to
support a reduction in or reversal of the valuation allowances. The amount of the deferred tax asset considered realizable could
be adjusted if significant positive evidence increases. Income taxes on U.S. operations for 2015 and 2014 were substantially
offset by changes in the valuation allowance.