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Income Taxes (Tables)
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12 Months Ended |
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Dec. 31, 2012
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| Income Taxes [Abstract] |
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| Schedule of Components of Income Tax Expense (Benefit) |
The components of income tax expense (benefit) for 2012, 2011 and 2010 are presented in the table below.
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Income Tax Expense (Benefit) |
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(Dollars in millions) |
2012 |
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2011 |
|
2010 |
Current income tax expense (benefit) |
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U.S. federal |
$ |
458 |
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$ |
(733 |
) |
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$ |
(666 |
) |
U.S. state and local |
592 |
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|
393 |
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|
158 |
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Non-U.S. |
569 |
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|
613 |
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|
815 |
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Total current expense |
1,619 |
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|
273 |
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|
307 |
|
Deferred income tax expense (benefit) |
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U.S. federal |
(3,433 |
) |
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(2,673 |
) |
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(287 |
) |
U.S. state and local |
(55 |
) |
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(584 |
) |
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201 |
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Non-U.S. |
753 |
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1,308 |
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|
694 |
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Total deferred expense (benefit) |
(2,735 |
) |
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(1,949 |
) |
|
608 |
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Total income tax expense (benefit) |
$ |
(1,116 |
) |
|
$ |
(1,676 |
) |
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$ |
915 |
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| Schedule of Effective Income Tax Rate Reconciliation |
A reconciliation of the expected U.S. federal income tax expense applying the federal statutory tax rate of 35 percent to the Corporation’s actual income tax expense (benefit) and resulting effective tax rate for 2012, 2011 and 2010 are presented in the Reconciliation of Income Tax Expense (Benefit) table.
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Reconciliation of Income Tax Expense (Benefit) |
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2012 |
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2011 |
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2010 |
(Dollars in millions) |
Amount |
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Percent |
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Amount |
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Percent |
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Amount |
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Percent |
Expected U.S. federal income tax expense (benefit) |
$ |
1,075 |
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|
35.0 |
% |
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$ |
(81 |
) |
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35.0 |
% |
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$ |
(463 |
) |
|
35.0 |
% |
Increase (decrease) in taxes resulting from: |
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(1 |
)% |
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State tax expense (benefit), net of federal effect |
349 |
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11.4 |
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(124 |
) |
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233 |
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(17.6 |
) |
Non-U.S. tax differential (1)
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(1,968 |
) |
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(64.1 |
) |
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(383 |
) |
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(190 |
) |
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14.4 |
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Low-income housing credits/other credits |
(783 |
) |
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(25.5 |
) |
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(800 |
) |
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(732 |
) |
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55.4 |
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Tax-exempt income, including dividends |
(576 |
) |
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(18.8 |
) |
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(614 |
) |
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(981 |
) |
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74.2 |
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Changes in prior period UTBs (including interest) |
(198 |
) |
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(6.4 |
) |
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(239 |
) |
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(349 |
) |
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26.4 |
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Non-U.S. statutory rate reductions |
788 |
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25.7 |
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860 |
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392 |
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(29.7 |
) |
Nondeductible expenses |
231 |
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7.5 |
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119 |
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99 |
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(7.5 |
) |
Leveraged lease tax differential |
83 |
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2.7 |
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121 |
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98 |
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(7.4 |
) |
Change in federal and non-U.S. valuation allowances |
41 |
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1.3 |
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(1,102 |
) |
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(1,657 |
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125.4 |
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Goodwill – impairment and other |
— |
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— |
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1,420 |
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4,508 |
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(341.0 |
) |
Subsidiary sales and liquidations |
— |
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— |
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(823 |
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— |
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— |
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Other |
(158 |
) |
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(5.1 |
) |
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(30 |
) |
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(43 |
) |
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3.2 |
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Total income tax expense (benefit) |
$ |
(1,116 |
) |
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(36.3 |
)% |
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$ |
(1,676 |
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n/m |
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$ |
915 |
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(69.2 |
)% |
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(1) |
Includes in 2012, $1.7 billion income tax benefit attributable to the excess of foreign tax credits recognized in the U.S. upon repatriation of the earnings of certain non-U.S. subsidiaries over the related U.S. tax liability.
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n/m = not meaningful
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| Reconciliation of Change in Unrecognized Tax Benefits |
The reconciliation of the beginning unrecognized tax benefits (UTB) balance to the ending balance is presented in the table below.
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Reconciliation of the Change in Unrecognized Tax Benefits |
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(Dollars in millions) |
2012 |
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2011 |
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2010 |
Beginning balance |
$ |
4,203 |
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$ |
5,169 |
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$ |
5,253 |
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Increases related to positions taken during the current year |
352 |
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219 |
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172 |
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Increases related to positions taken during prior years (1)
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142 |
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879 |
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755 |
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Decreases related to positions taken during prior years (1)
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(711 |
) |
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(1,669 |
) |
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(657 |
) |
Settlements |
(205 |
) |
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(277 |
) |
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(305 |
) |
Expiration of statute of limitations |
(104 |
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(118 |
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(49 |
) |
Ending balance |
$ |
3,677 |
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$ |
4,203 |
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$ |
5,169 |
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(1) |
The sum per year of positions taken during prior years differs from the $198 million, $239 million and $349 million in the Reconciliation of Income Tax Expense (Benefit) table due to temporary items and jurisdictional offsets, as well as the inclusion of interest in the Reconciliation of Income Tax Expense (Benefit) table.
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| Summary of Income Tax Examinations |
The Tax Examination Status table summarizes the status of significant examinations (U.S. federal unless otherwise noted) for the Corporation and various subsidiaries as of December 31, 2012.
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Tax Examination Status |
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Years under
Examination
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Status at December 31 2012 |
Bank of America Corporation – U.S. |
2001 – 2009 |
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See below |
Bank of America Corporation – U.S. |
2010 – 2011 |
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Field examination |
Bank of America Corporation – New York (1)
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2004 – 2008 |
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Field examination |
Merrill Lynch – U.S. |
2004 – 2008 |
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See below |
Various – U.K. |
2011 |
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Field examination |
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(1) |
All tax years subsequent to the years shown remain open to examination. |
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| Schedule of Deferred Tax Assets and Liabilities |
Significant components of the Corporation’s net deferred tax assets and liabilities at December 31, 2012 and 2011 are presented in the Deferred Tax Assets and Liabilities table.
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Deferred Tax Assets and Liabilities |
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December 31 |
(Dollars in millions) |
2012 |
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2011 |
Deferred tax assets |
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Net operating loss carryforwards |
$ |
13,863 |
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$ |
14,307 |
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Tax credit carryforwards |
9,529 |
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4,510 |
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Allowance for credit losses |
8,463 |
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11,824 |
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Accrued expenses |
8,099 |
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8,340 |
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Employee compensation and retirement benefits |
4,612 |
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4,792 |
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Security, loan and debt valuations |
2,712 |
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1,091 |
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State income taxes |
2,766 |
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|
2,489 |
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Other |
725 |
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|
1,654 |
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Gross deferred tax assets |
50,769 |
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|
49,007 |
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Valuation allowance |
(2,211 |
) |
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(1,796 |
) |
Total deferred tax assets, net of valuation allowance |
48,558 |
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47,211 |
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Deferred tax liabilities |
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Equipment lease financing |
3,371 |
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3,042 |
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Long-term borrowings |
3,215 |
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3,360 |
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Available-for-sale securities |
2,877 |
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1,811 |
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Mortgage servicing rights |
1,986 |
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1,993 |
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Intangibles |
1,708 |
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1,894 |
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Fee income |
901 |
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1,038 |
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Other |
1,462 |
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2,074 |
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Gross deferred tax liabilities |
15,520 |
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|
15,212 |
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Net deferred tax assets |
$ |
33,038 |
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$ |
31,999 |
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| Deferred Tax Assets And Related Valuation Allowances Recognized For Net Operating And Other Loss Carryforwards And Tax Credit Carryforwards |
The table below summarizes the deferred tax assets and related valuation allowances recognized for the NOL and tax credit carryforwards at December 31, 2012.
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Net Operating Loss and Tax Credit Carryforwards |
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(Dollars in millions) |
Deferred
Tax Asset
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Valuation
Allowance
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Net
Deferred
Tax Asset
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First Year
Expiring
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Net operating losses – U.S. |
$ |
4,911 |
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$ |
— |
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$ |
4,911 |
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After 2027 |
Net operating losses – U.K. |
8,483 |
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— |
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8,483 |
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None (1)
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Net operating losses – other non-U.S. |
469 |
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(296 |
) |
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173 |
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Various |
Net operating losses – U.S. states (2)
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2,136 |
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(932 |
) |
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1,204 |
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Various |
General business credits |
3,349 |
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— |
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3,349 |
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After 2027 |
Foreign tax credits |
6,180 |
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(271 |
) |
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5,909 |
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After 2017 |
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(1) |
The U.K. net operating losses may be carried forward indefinitely. |
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(2) |
The net operating losses and related valuation allowances for U.S. states before considering the benefit of federal deductions were $3.3 billion and $1.4 billion.
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