87 The components of deferred tax assets and liabilities were as follows (in millions):   Dec 31, 2012 Dec 31, 2011 Deferred tax assets:     Net operating loss carryforwards $ 78.2 $ 53.0 Pension and retiree benefits accruals 46.4 34.2 Inventory 20.0 16.2 Depreciation and fixed assets 7.7 6.7 Tax credit carryforwards 6.5 6.9 Other liabilities 49.4 52.8 Valuation allowance (74.3 ) (40.1 ) Total deferred tax assets 133.9 129.7 Deferred tax liabilities:     Convertible debt discount 147.7 131.2 Inventory 1.5 1.9 Depreciation and fixed assets 89.8 83.4 Intangibles 58.8 44.0 Other 6.5 18.8 Total deferred tax liabilities 304.3 279.3 Net deferred tax assets (liabilities) $ (170.4 ) $ (149.6 ) The valuation of deferred tax assets is dependent on, among other things, the ability of the Company to generate a suf ficient level of future taxable income in relevant taxing jurisdictions. In estimating future taxable income, the Company has considered both positive and negative evidence and has considered the implementation of prudent and feasible tax planning strategies. The Company has and will continue to review on a quarterly basis its assumptions and tax planning strategies and, if the amount of the estimated realizable net deferred tax asset is less than the amount currently on the balance sheet, the Company will reduce its deferred tax asset, recognizing a non-cash char ge against reported earnings. In the third quarter of 2012 , the Company updated its 2012 forecasts and substantially completed its 2013 global business planning process, which indicated continuing weakness in its Iberian market and business. After weighing all positive and negative evidence, including the three year cumulative loss position, and factoring in prudent and feasible tax  planning strategies, management judged that it was not more likely than not that a future tax benefit for the deferred tax assets of its Spanish and Portuguese business units would be realized. T ax expense of $1 1.5 million was recorded in 2012 to establish a full valuation allowance against Spanish and Portuguese deferred tax assets, of which $1.8 million related to the beginning of the year net deferred tax asset position. In the fourth quarter of 2012 , a valuation allowance was also recorded against deferred tax assets in the Company's German business unit. The German business unit incurred an equipment failure in the fourth quarter that adversely impacted its ability to meet its contractual obligations for its lar ge project work and reduced profit expectations. In addition, the German business is encountering certain other project delay/cancellation and warranty issues. After weighing all positive and negative evidence, including the three year cumulative loss position, and factoring in prudent and feasible tax planning strategies, management judged that it was not more likely than not that a future tax benefit for the deferred tax assets of its German business would be realized. T ax expense of $8.3 million was recorded in 2012 to establish a full valuation allowance against German deferred tax assets, none of which related to a beginning of the year net deferred tax asset position. A full valuation allowance was also recorded in the fourth quarter of 2012 for the Company's Colombian distribution business since it was rendered redundant by the fourth quarter acquisition of Procables. The Colombian distribution business will be wound down and is expected to generate losses until the business is terminated. T ax expense of $1.1 million was recorded in 2012 to establish a full valuation allowance against the Colombian deferred tax assets, of which $0.2 million related to the beginning of the year net deferred tax asset position. The Company continuously monitors the deferred tax position of all business units to determine whether a valuation allowance should be recorded. Full valuation allowances are currently recorded against deferred tax assets in ten significant business units. The Company is closely monitoring the deferred tax asset situation in New Zealand. The New Zealand business unit has been operating at mar ginal profitability in recent years due to depressed economic conditions and increased competition in the local market. After weighing all positive and negative evidence and factoring in prudent and feasible tax planning strategies, management has judged that it is more likely than not that a future tax benefit for the New Zealand business's $5.8 million of net deferred tax T able of Contents