Ingram Micro 2013 Annual Report Download - page 56

Table of Contents
INGRAM MICRO INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(In 000s, except per share data)
Deferred income taxes reflect the tax effect of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes
and the amounts used for income tax purposes. Significant components of our net deferred tax assets and liabilities are as follows:
Fiscal Year End
2013
2012
Deferred tax assets:
Net operating loss carryforwards $293,514
$ 223,790
Tax credit carryforwards 134,573
94,732
Employee benefits, including stock-based compensation 51,764
60,292
Reorganization and restructuring reserves 3,138
4,410
Inventory 32,627
31,999
Depreciation and amortization 38,899
69,264
Allowance on trade accounts receivable 12,991
13,476
Reserves and accruals not currently deductible for income tax purposes 27,545
26,478
Other 33,308
17,700
Total deferred tax assets 628,359
542,141
Valuation allowance (315,312)
(241,095)
Subtotal 313,047
301,046
Deferred tax liabilities: —
Depreciation and amortization (154,079)
(166,239)
Outside basis difference on earnings of foreign subsidiaries (60,345)
(61,560)
Other (15,250)
(17,272)
Total deferred tax liabilities (229,674)
(245,071)
Net deferred tax assets $83,373
$55,975
Out of the amounts shown above, net current deferred tax assets of $83,001 and $106,986 are included in other current assets at December 28, 2013
and December 29, 2012, respectively. Net non-current deferred tax assets of $372 as of December 28, 2013 are included in other non-current assets and net
non-current deferred tax liabilities of $51,011 as of December 29, 2012 are included in deferred income taxes.
We record net deferred tax assets to the extent we believe these assets will more likely than not be realized. In making such determination, we consider all
available positive and negative evidence, including the nature of the deferred tax assets and related statutory limits on utilization, recent operating results,
future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies and recent financial operations. In the event
we were to determine that we would be able to realize our deferred income tax assets in the future in excess of or less than the net recorded amount, we would
make an adjustment to the valuation allowance which would reduce or increase the provision for income taxes.
At December 28, 2013, we had deferred tax assets related to net operating loss carryforwards of $293,514, along with a valuation allowance of
$235,757, with the net amount reflecting the amount more likely than not to be realized. Of the remaining $57,757 of net deferred tax assets associated with
NOL carryforwards, $22,001 has no expiration date. Included in the amounts noted above at December 28, 2013 is $59,494 of deferred tax assets for local
statutory losses that were generated by our Luxembourg subsidiary during 2013, along with an offsetting valuation allowance. A portion of the carryforwards
may expire before being applied to reduce future income tax liabilities. We monitor all of our other deferred tax assets for realizability in a similar manner to
those described above and will record or release valuation allowances as required to reflect the amount more likely than not to be realized.
At December 28, 2013, our total deferred tax assets related to foreign tax credit carryforwards in the U.S. was $134,342 and our total valuation
allowance related to such credit carryforwards was $55,508, with the net amount reflecting the amount more likely than not to be realized based on our
current ability to generate the character of income required to utilize these credits prior to expiry through 2021.
The valuation allowance increased by a net $74,217 during 2013, driven largely by the increase in the valuation allowance on deferred tax assets related
to the net operating losses in Luxembourg and the foreign tax credit carryforwards, as noted above.
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