expiration of the U.S. federal research and development credit at the end of 2011. These items collectively caused our annual effective tax rate to be higher than both the 35% U.S. federal
statutory rate and our effective tax rates in 2011 and 2010. In 2011 and 2010, the favorable impact of earnings in lower tax
rate jurisdictions offset the adverse impact of foreign jurisdiction losses and as a result, the effective tax rate in both years was lower than the 35% U.S. federal statutory rate.
Deferred income tax assets and liabilities are as follows (in millions):
|
|
|
|
|
|
|
|
|
| |
|
Year Ended
December
31, |
|
| |
|
2012 |
|
|
2011 |
|
| Deferred tax assets: |
|
|
|
|
|
|
|
|
| Net operating losses U.S. - Federal/States (1) |
|
$ |
47 |
|
|
$ |
43 |
|
| Net operating losses foreign (2) |
|
|
289 |
|
|
|
113 |
|
| Accrued liabilities, reserves, & other expenses |
|
|
482 |
|
|
|
412 |
|
| Stock-based compensation |
|
|
281 |
|
|
|
178 |
|
| Deferred revenue |
|
|
129 |
|
|
|
41 |
|
| Assets held for investment |
|
|
129 |
|
|
|
64 |
|
| Other items |
|
|
133 |
|
|
|
98 |
|
| Tax credits (3) |
|
|
12 |
|
|
|
7 |
|
|
|
|
|
|
|
|
|
|
| Total gross deferred tax assets |
|
|
1,502 |
|
|
|
956 |
|
| Less valuation allowance (4) |
|
|
(415 |
) |
|
|
(227 |
) |
|
|
|
|
|
|
|
|
|
| Deferred tax assets, net of valuation allowance |
|
|
1,087 |
|
|
|
729 |
|
| Deferred tax liabilities: |
|
|
|
|
|
|
|
|
| Depreciation & amortization |
|
|
(698 |
) |
|
|
(572 |
) |
| Acquisition related intangible assets |
|
|
(274 |
) |
|
|
(231 |
) |
| Other items |
|
|
(29 |
) |
|
|
(21 |
) |
|
|
|
|
|
|
|
|
|
| Net deferred tax assets (liabilities), net of valuation allowance |
|
$ |
86 |
|
|
$ |
(95 |
) |
|
|
|
|
|
|
|
|
|
| (1) |
Excluding $9 million and $116 million of deferred tax assets at December 31, 2012 and 2011, related to net operating losses that result from excess stock-based
compensation and for which any benefit realized will be recorded to stockholders’ equity. |
| (2) |
Excluding $2 million and $13 million of deferred tax assets at December 31, 2012 and 2011, related to net operating losses that result from excess stock-based
compensation and for which any benefit realized will be recorded to stockholders’ equity. |
| (3) |
Excluding $146 million and $278 million of deferred tax assets at December 31, 2012 and 2011, related to tax credits that result from excess stock-based
compensation and for which any benefit realized will be recorded to stockholders’ equity. |
| (4) |
Relates primarily to deferred tax assets that would only be realizable upon the generation of future capital gains and net income in certain foreign taxing
jurisdictions. |
As of December 31, 2012, our federal, foreign, and state net operating loss carryforwards
for income tax purposes were approximately $89 million, $1.1 billion, and $606 million. The federal and state net operating loss carryforwards are subject to limitations under Section 382 of the Internal Revenue Code and applicable state tax
law. If not utilized, a portion of the federal, foreign, and state net operating loss carryforwards will begin to expire in 2026, 2013, and 2013, respectively. As of December 31, 2012, our tax credit carryforwards for income tax purposes were
approximately $158 million. If not utilized, a portion of the tax credit carryforwards will begin to expire in 2020.
69
|
