Advanced Micro Devices, Inc. Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Income Taxes (Tables)

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2016

The provision for income taxes consists of:



	2016			2015			2014
	(In millions)
Current:
U.S. Federal	$	(2	)	$	(1	)	$	(1	)
U.S. State and Local	—			—			—
Foreign National and Local	21			16			6
Total	19			15			5
Deferred:
U.S. Federal	(1		)	—			—
Foreign National and Local	21			(1		)	—
Total	20			(1		)	—
Provision for income taxes	$	39		$	14		$	5

Schedule of Loss before Income Tax

Loss before income taxes consists of the following:



	2016			2015			2014
	(In millions)
U.S.	$	(604	)	$	(1,100	)	$	(621	)
Foreign	146			454			223
Total pre-tax loss including ATMP JV equity loss	$	(458	)	$	(646	)	$	(398	)

Schedule of Deferred Tax Assets and Liabilities

Deferred income taxes reflect the net tax effects of tax carryovers and temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the balances for income tax purposes. Significant components of the Company’s deferred tax assets and liabilities as of December 31, 2016 and December 26, 2015 are as follows:



	December 31, 2016			December 26, 2015
	(In millions)
Deferred tax assets:
Net operating loss carryovers	$	2,480		$	2,342
Deferred distributor income	26			20
Inventory valuation	26			39
Accrued expenses not currently deductible	65			74
Acquired intangibles	213			257
Tax deductible goodwill	146			192
Federal and state tax credit carryovers	427			400
Foreign capitalized research and development costs	—			60
Foreign research and development ITC credits	341			231
Discount of convertible notes	2			1
Other	83			119
Total deferred tax assets	3,809			3,735
Less: valuation allowance	(3,633		)	(3,669		)
Total deferred tax assets, net of valuation allowance	176			66
Deferred tax liabilities:
Undistributed foreign earnings	(158		)	(33		)
Other	(18		)	(23		)
Total deferred tax liabilities	(176		)	(56		)
Net deferred tax assets	$	—		$	10

Schedule of Deferred Tax Assets and Liabilities, Current and Noncurrent

The breakdown between current and non-current deferred tax assets and deferred tax liabilities as of December 31, 2016 and December 26, 2015 is as follows:



	December 31, 2016			December 26, 2015
	(In millions)
Current deferred tax assets	$	—		$	8
Non-current deferred tax assets	11			48
Current deferred tax liabilities	—			(46		)
Non-current deferred tax liabilities	$	(11	)	$	—
Net deferred tax assets	$	—		$	10

Summary of Tax Attribute Carryforwards

The following is a summary of the various tax attribute carryforwards the Company had as of December 31, 2016. The amounts presented below include amounts related to excess stock option deductions, as discussed above.



Carryforward	Federal		State / Provincial		Expiration
	(In millions)
U.S.-net operating loss carryovers	$	6,973	$	348	2017 to 2036
U.S.-credit carryovers	$	398	$	209	2017 to 2036
Canada-net operating loss carryovers	$	13	$	13	2027 to 2028
Canada-credit carryovers	$	331	$	39	2021 to 2036
Barbados-net operating loss carryovers	$	29	N/A		2017
Other foreign net operating loss carryovers	$	36	N/A		various

Schedule of Effective Income Tax Rate Reconciliation

The table below displays reconciliation between statutory federal income taxes and the total provision (benefit) for income taxes.



	2016			2015			2014
	(In millions)
Statutory federal income tax benefit at 35% rate	$	(160	)	$	(226	)	$	(139	)
State taxes, net of federal benefit	1			1			1
Foreign (income) expense at other than U.S. rates	(1		)	9			1
U.S. valuation allowance generated	201			232			144
Credit monetization	(2		)	(2		)	(2		)
Provision for income taxes	$	39		$	14		$	5

Schedule of Unrecognized Tax Benefits Roll Forward

A reconciliation of the gross unrecognized tax benefits is as follows:



	2016			2015			2014
	(In millions)
Balance at beginning of year	$	38		$	28		$	52
Increases for tax positions taken in prior years	3			11			1
Decreases for tax positions taken in prior years	—			(1		)	—
Increases for tax positions taken in the current year	2			2			2
Decreases for settlements with taxing authorities	—			(2		)	(27		)
Decreases for lapsing of the statute of limitations	(1		)	—			—
Balance at end of year	$	42		$	38		$	28