Intel 2012 Annual Report Download - page 95

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Deferred and Current Income Taxes
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and
liabilities for financial reporting purposes and the amounts for income tax purposes. Significant components of our
deferred tax assets and liabilities at year-ends were as follows:
(In Millions)
2012
2011
Deferred tax assets
Accrued compensation and other benefits .....................................................................................
$ 1,125
$ 1,016
Share-based compensation............................................................................................................
638
732
Deferred income.............................................................................................................................
637
616
Inventory.........................................................................................................................................
506
613
Unrealized losses on investments and derivatives.........................................................................
36
293
State credits and net operating losses ...........................................................................................
297
230
Other, net........................................................................................................................................
654
756
Gross deferred tax assets ...........................................................................................................
3,893
4,256
Valuation allowance........................................................................................................................
(389)
(373)
Total deferred tax assets .............................................................................................................
$ 3,504
$ 3,883
Deferred tax liabilities
Property, plant and equipment .......................................................................................................
$ (2,325)
$ (2,329)
Licenses and intangibles ................................................................................................................
(778)
(915)
Convertible debt .............................................................................................................................
(856)
(799)
Investment in foreign subsidiaries ..................................................................................................
(213)
(214)
Other, net........................................................................................................................................
(269)
(208)
Total deferred tax liabilities .........................................................................................................
$ (4,441)
$ (4,465)
Net deferred tax assets (liabilities) .............................................................................................
$ (937)
$ (582)
Reported as:
Current deferred tax assets........................................................................................................
$ 2,117
$ 1,700
Non-current deferred tax assets.................................................................................................
358
335
Non-current deferred tax liabilities .............................................................................................
(3,412)
(2,617)
Net deferred tax assets (liabilities) .............................................................................................
$ (937)
$ (582)
Non-current deferred tax assets are included within other long-term assets on the consolidated balance sheets.
The valuation allowance is based on our assessment that it is more likely than not that certain deferred tax assets will not
be realized in the foreseeable future. The valuation allowance as of December 29, 2012 included allowances related to
unrealized state credit carryforwards of $284 million and matters related to our non-U.S. subsidiaries of $105 million.
As of December 29, 2012, our federal, state, and non-U.S. net operating loss carryforwards for income tax purposes were
approximately $271 million, $365 million, and $635 million, respectively. The majority of the non-U.S. net operating loss
carryforwards have no expiration date. The remaining non-U.S. as well as the U.S. federal and state net operating loss
carryforwards expire at various dates through 2032. A significant amount of the net operating loss carryforwards in the
U.S. relates to acquisitions and, as a result, is limited in the amount that can be recognized in any one year. The non-U.S.
net operating loss carryforwards include $412 million that is not likely to be recovered and has been reduced by a
valuation allowance.
As of December 29, 2012, we had not recognized U.S. deferred income taxes on a cumulative total of $17.5 billion of
undistributed earnings for certain non-U.S. subsidiaries and $2.6 billion of other basis differences of our investments in
certain non-U.S. subsidiaries primarily related to McAfee. Determining the unrecognized deferred tax liability related to
investments in these non-U.S. subsidiaries that are indefinitely reinvested is not practicable. We currently intend to
indefinitely reinvest those earnings and other basis differences in operations outside the U.S.
Current income taxes receivable of $866 million as of December 29, 2012 ($191 million as of December 31, 2011) is
included in other current assets. Current income taxes payable of $711 million as of December 29, 2012 ($335 million as
of December 31, 2011) is included in other accrued liabilities.