Qualcomm 2012 Annual Report Download - page 77

QUALCOMM Incorporated
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The revaluation of deferred taxes represents the impact of paying current taxes at a higher state effective tax rate than the effective tax rate
that will be in effect when the resulting deferred tax asset or liability is scheduled to reverse. The Company has not recorded a deferred tax
liability of approximately $5.8 billion
related to the United States federal and state income taxes and foreign withholding taxes on approximately
$16.4 billion of undistributed earnings of certain non-United States subsidiaries indefinitely invested outside the United States. Should the
Company decide to repatriate the foreign earnings, the Company would have to adjust the income tax provision in the period management
determined that the earnings will no longer be indefinitely invested outside the United States.
The Company files income tax returns in the United States federal jurisdiction and various state and foreign jurisdictions. Tax audit impacts,
net reflects adjustments to the Company’s prior year estimates of uncertain tax positions as a result of various federal, state and foreign tax
audits. The Company is currently a participant in the Internal Revenue Service (IRS) Compliance Assurance Process, whereby the IRS and the
Company endeavor to agree on the treatment of all tax issues prior to the tax return being filed. The IRS completed its examination of the
Company’s tax return for fiscal 2010 and issued a full acceptance letter during the third quarter of fiscal 2011, resulting in no change to the
income tax provision. The Company is no longer subject to United States federal income tax examinations for years prior to fiscal 2011. In the
fourth quarter of fiscal 2012, the California Franchise Tax Board completed its audit of fiscal 2005 through fiscal 2008, resulting in a decrease to
the tax provision of $10 million . The Company is subject to examination by the California Franchise Tax Board for fiscal years after 2008. The
Company is also subject to income taxes in other taxing jurisdictions in the United States and around the world, many of which are open to tax
examinations for periods after fiscal 2000.
The Company had deferred tax assets and deferred tax liabilities as follows (in millions):
F- 17
2012 2011 2010
Expected income tax provision at federal statutory tax rate
$
2,297
$
1,991
$
1,573
State income tax provision, net of federal benefit
24
283
226
Foreign income taxed at other than U.S. rates
(1,045
)
(1,074
)
(897
)
Tax audit impacts, net
(11
)
1
3
Tax credits
(36
)
(151
)
(55
)
Valuation allowance
55
42
(40
)
Revaluation of deferred taxes
—
69
152
Other
(5
)
(29
)
11
$
1,279
$
1,132
$
973