CVS 2015 Annual Report Download - page 89

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87
2015 Annual Report
The following table is a summary of the significant components of the Company’s deferred tax assets and liabilities
as of December 31:
IN MILLIONS 2015 2014
Deferred tax assets:
Lease and rents
$ 378
$ 396
Inventory
99
—
Employee benefits
359
311
Allowance for doubtful accounts
279
164
Retirement benefits
105
80
Net operating loss and capital loss carryforwards
115
74
Deferred income
83
261
Other
498
297
Valuation allowance
(115)
(5)
Total deferred tax assets
1,801
1,578
Deferred tax liabilities:
Inventories
—
(18)
Depreciation and amortization
(6,018)
(4,572)
Total deferred tax liabilities
(6,018)
(4,590)
Net deferred tax liabilities
$ (4,217)
$ (3,012)
Net deferred tax assets (liabilities) are presented on the consolidated balance sheets as follows:
IN MILLIONS 2015 2014
Deferred tax assets – current
$ 1,220
$ 985
Deferred tax assets – noncurrent (included in other assets)
—
39
Deferred tax liabilities – noncurrent
(5,437)
(4,036)
Net deferred tax liabilities
$ (4,217)
$ (3,012)
The Company assesses positive and negative evidence to determine whether it is more likely than not some portion
of a deferred tax asset would not be realized. When it would not, a valuation allowance is established for such
portion of a deferred tax asset. The Company’s valuation allowance increased by $110 million in the current year, a
majority of which relates to capital losses assumed in the Omnicare acquisition.
A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
IN MILLIONS 2015 2014 2013
Beginning balance
$ 188
$ 117 $ 80
Additions based on tax positions related to the current year
57
32 19
Additions based on tax positions related to prior years
122
70 37
Reductions for tax positions of prior years
(11)
(15) (1)
Expiration of statutes of limitation
(13)
(15) (17)
Settlements
(5)
(1) (1)
Ending balance
$ 338
$ 188 $ 117