Redbox 2012 Annual Report Download - page 80

Change in Valuation Allowance
Dollars in thousands Year Ended December 31,
2012 2011 2010
Decrease in valuation allowance ...................... $— $(8,947) $(982)
Deferred Tax Assets Relating to Income Tax Loss Carryforwards
Our deferred tax assets relating to income tax loss carryforwards and expiration periods are summarized as
below:
Dollars in thousands December 31, 2012
Federal State Foreign
Net operating loss carryforwards ................ $ 49,705 $ 62,839 $3,135
Deferred tax assets related to net operating loss
carryforwards ............................. $ 17,397 $ 2,133 $ 826
Years that net operating loss carryforwards will
expire between ............................ 2024 and 2030 2016 and 2030 2033
Based upon our projections for future taxable income over the periods in which the deferred tax assets are
deductible, we believe it is more likely than not that we will realize the benefits of these deductible differences.
U.S. Federal Tax Credits and Expiration Periods
The following is the information pertaining to our U.S. federal tax credits as well as the expiration periods:
Dollars in thousands December 31, 2012
Amount Expiration
U.S Federal tax credits:
Foreign tax credits ......................................... $2,380 2015 to 2023
Research and development tax credits .......................... 4,024 2013 to 2032
Other general business tax credits ............................. 197 2032
Alternative minimum tax credits .............................. 728 Donotexpire
Illinois state tax credits ..................................... 1,562 2015 to 2017
California U.S. Federal and State tax credits ..................... 335 Donotexpire
Total U.S. Federal tax credits ............................ $9,226
On January 2, 2013, the President signed H.R. 8, the American Taxpayer Relief Act of 2012, which retroactively
extended a number of tax deductions and credits that otherwise would have expired, including the research and
development credit. If this legislation had been enacted in 2012, the Company would have reported a research
and development credit in its deferred tax assets.
We did not provide for U.S. income taxes on undistributed earnings of foreign operations because they were
considered permanently invested outside of the U.S. Upon repatriation, some of these earnings would generate
foreign tax credits, which may reduce the U.S. tax liability associated with any future foreign dividend. At
December 31, 2012, the cumulative amount of earnings upon which U.S. income taxes have not been provided
was approximately $14.4 million.
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