AutoNation 2015 Annual Report Download - page 84

Table of Contents
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Deferred income tax asset and liability components at December 31 are as follows:
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Deferred income tax assets:
Inventory $ 35.1
$ 28.9
Receivable reserves 2.9
3.0
Warranty, chargeback, and self-insurance liabilities 63.5
57.8
Other accrued liabilities 32.6
25.1
Deferred compensation 28.5
24.0
Stock-based compensation 24.3
26.8
Loss carryforwards—federal and state 13.3
7.2
Other, net 6.8
13.2
Total deferred income tax assets 207.0
186.0
Valuation allowance (2.4)
(2.5)
Deferred income tax assets, net of valuation allowance 204.6
183.5
Deferred income tax liabilities:
Long-lived assets (intangible assets and property) (263.8)
(233.6)
Other, net (19.4)
(19.2)
Total deferred income tax liabilities (283.2)
(252.8)
Net deferred income tax liabilities $ (78.6)
$ (69.3)
As discussed in Note 1 above, in November 2015, the FASB issued an accounting standard update that requires deferred tax liabilities and assets be
classified as noncurrent in a classified statement of financial position. As permitted, we adopted this accounting standard update prospectively effective
October 1, 2015. Accordingly, our net deferred tax liability of $78.6 million is classified as Deferred Income Taxes in the accompanying Consolidated
Balance Sheet as of December 31, 2015. We did not adjust prior periods retrospectively for the new accounting standard, and therefore, as of December 31,
2014, $68.6 million of current deferred income tax assets are classified as Other Current Assets and $137.9 million of noncurrent deferred income tax
liabilities are classified as Deferred Income Taxes in the accompanying Consolidated Balance Sheet.
Income taxes refundable included in Receivables, net totaled $11.7 million at December 31, 2015. Income taxes payable included in Other Current
Liabilities totaled $17.5 million at December 31, 2014.
At December 31, 2015, we had $110.3 million of gross domestic state net operating loss carryforwards and capital loss carryforwards, and $4.2 million of
state tax credits, all of which result in a deferred tax asset of $7.3 million and expire from 2016 through 2033. At December 31, 2015, we had $2.4 million of
valuation allowance related to these loss carryforwards. In assessing the realizability of deferred tax assets, we consider whether it is more likely than not that
some portion or all of the deferred tax assets will not be realized. We provide valuation allowances to offset portions of deferred tax assets due to uncertainty
surrounding the future realization of such deferred tax assets. We adjust the valuation allowance in the period management determines it is more likely than
not that deferred tax assets will or will not be realized. Certain decreases to valuation allowances are offset against intangible assets associated with business
acquisitions accounted for under the acquisition method of accounting.
We file income tax returns in the U.S. federal jurisdiction and various states. As a matter of course, various taxing authorities, including the IRS, regularly
audit us. These audits may result in proposed assessments where the ultimate resolution may result in our owing additional taxes. Currently, no tax years are
under examination by the IRS and tax years from 2009 to 2014 are under examination by U.S. state jurisdictions. We believe that our tax positions comply
with applicable tax law and that we have adequately provided for these matters.
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