eBay 2013 Annual Report Download - page 140

eBay Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Deferred tax assets and liabilities are recognized for the future tax consequences of differences between the carrying amounts of assets and
liabilities and their respective tax bases using enacted tax rates in effect for the year in which the differences are expected to be reversed.
Significant deferred tax assets and liabilities consist of the following:
As of December 31, 2013 , our federal, foreign and state net operating loss carryforwards for income tax purposes were approximately
$146 million , $147 million and $569 million , respectively. The federal and state net operating loss carryforwards are subject to various
limitations under Section 382 of the Internal Revenue Code and applicable state tax laws. If not utilized, the federal net operating loss
carryforwards will begin to expire in 2016 and the state net operating loss carryforwards will begin to expire in 2014. As of December 31, 2013
,
our federal and state tax credit carryforwards for income tax purposes were approximately $2 million and $44 million , respectively. If not
utilized, the federal tax credit carryforwards will begin to expire in 2018 and most of the state tax credits carry forward indefinitely.
As of December 31, 2013 and 2012, our federal capital loss carryover amounted to $403 million and $344 million , respectively, which is
subject to a full valuation allowance. The increase in the capital loss carryover and associated valuation allowance is primarily due to the tax loss
on sale of the Kynetic note. If not utilized, the federal capital loss carryover will begin to expire in 2014 and fully expire in 2018.
At December 31, 2013 and 2012 , we maintained a valuation allowance with respect to certain of our deferred tax assets relating primarily
to U.S. capital losses and operating losses in certain states and various non-U.S. jurisdictions that we believe are not likely to be realized.
We have not provided for U.S. federal or foreign income taxes, including withholding taxes on $14.0 billion of our non-U.S. subsidiaries'
undistributed earnings as of December 31, 2013 . We intend to indefinitely reinvest the $14.0 billion of our non-U.S. subsidiaries’ undistributed
earnings in our international operations. Accordingly, we currently have no plans to repatriate those funds. As such, we do not know the time or
manner in which we would repatriate those funds. Because the time or manner of repatriation is uncertain, we cannot determine the impact of
local taxes, withholding taxes and foreign tax credits associated with the future repatriation of such earnings and therefore cannot quantify the
tax liability. In cases where we intend to repatriate a portion of our foreign subsidiaries’ undistributed earnings, we provide U.S. and applicable
foreign taxes on such earnings and such taxes are included in our deferred taxes or tax payable liabilities depending upon the planned timing and
manner of such repatriation. During 2013, we provided U.S. tax on approximately $450 million of our non-U.S. earnings which we expect to
repatriate in the future.
On a regular basis, we develop cash forecasts to estimate our cash needs internationally and domestically. We consider projected cash
needs for, among other things, investments in our existing businesses, potential acquisitions and capital transactions, including repurchases of
our common stock and debt repayments. We estimate the amount of cash available or
F-38
December 31,
2013
2012
(In millions)
Deferred tax assets:
Net operating loss, capital loss and credits
$
310
$
235
Accruals and allowances
341
355
Stock-based compensation
145
133
Discount on note receivable
—
55
Net unrealized losses
5
5
Net deferred tax assets
801
783
Valuation allowance
(186
)
(169
)
$
615
$
614
Deferred tax liabilities:
Unremitted foreign earnings
$
(246
)
$
(220
)
Acquisition-related intangibles
(296
)
(357
)
Depreciation and amortization
(351
)
(302
)
Available-for-sale securities
(332
)
(237
)
Other
(28
)
(21
)
(1,253
)
(1,137
)
$
(638
)
$
(523
)