Citibank 2013 Annual Report Download - page 216

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The following table summarizes the amounts of tax carry-forwards and
their expiration dates as of December 31, 2013:
In billions of dollars Amount
Year of expiration
December 31,
2013
December 31,
2012
U.S. tax return foreign tax credit
carry-forwards
2016 $ — $ 0.4
2017 4.7 6.6
2018 5.2 5.3
2019 1.2 1.3
2020 3.1 2.3
2021 1.4 1.9
2022 3.3 4.2
2023 (1) 0.7 —
Total U.S. tax return foreign tax credit
carry-forwards $19.6 $22.0
U.S. tax return general business credit
carry-forwards
2027 $ — $ 0.3
2028 0.4 0.4
2029 0.4 0.4
2030 0.4 0.5
2031 0.4 0.5
2032 0.5 0.5
2033 0.4 —
Total U.S. tax return general business credit
carry-forwards $ 2.5 $ 2.6
U.S. subsidiary separate federal NOL carry-forwards
2027 $ 0.2 $ 0.2
2028 0.1 0.1
2030 0.3 0.3
2031 1.7 1.8
2033 1.7 —
Total U.S. subsidiary separate federal NOL
carry-forwards (2) $ 4.0 $ 2.4
New York State NOL carry-forwards
2027 $ 0.1 $ 0.1
2028 6.5 7.2
2029 2.0 1.9
2030 0.1 0.4
2032 0.9 —
Total New York State NOL carry-forwards (2) $ 9.6 $ 9.6
New York City NOL carry-forwards
2027 $ 0.1 $ 0.1
2028 3.9 3.7
2029 1.5 1.6
2032 0.6 0.2
Total New York City NOL carry-forwards (2) $ 6.1 $ 5.6
APB 23 subsidiary NOL carry-forwards
Various $ 0.2 $ 0.2
Total APB 23 subsidiary NOL carry-forwards $ 0.2 $ 0.2
(1) The $0.7 billion in FTC carry-forwards that expires in 2023 is in a non-consolidated tax return entity
but is eventually expected to be utilized in Citigroup’s consolidated tax return.
(2) Pretax.
While Citi’s net total DTAs decreased year-over-year, the time remaining
for utilization has shortened, given the passage of time, particularly with
respect to the FTC component of the DTAs. Realization of the DTAs will
continue to be driven by Citi’s ability to generate U.S. taxable earnings in the
carry-forward periods, including through actions that optimize Citi’s U.S.
taxable earnings.
Although realization is not assured, Citi believes that the realization
of the recognized net DTAs of $52.8 billion at December 31, 2013 is more
likely than not based upon expectations as to future taxable income in the
jurisdictions in which the DTAs arise and available tax planning strategies
(as defined in ASC 740, Income Taxes) that would be implemented, if
necessary, to prevent a carry-forward from expiring. In general, Citi would
need to generate approximately $98 billion of U.S. taxable income during the
FTC carry-forward periods to prevent this most time sensitive component of
Citi’s DTAs from expiring. Citi’s net DTAs will decline primarily as additional
domestic GAAP taxable income is generated.
Citi has concluded that two components of positive evidence support the
full realization of its DTAs. First, Citi forecasts sufficient U.S. taxable income
in the carryforward periods, exclusive of ASC 740 tax planning strategies.
Citi’s forecasted taxable income, which will continue to be subject to overall
market and global economic conditions, incorporates geographic business
forecasts and taxable income adjustments to those forecasts (e.g., U.S.
tax exempt income, loan loss reserves deductible for U.S. tax reporting in
subsequent years), and actions intended to optimize its U.S. taxable earnings.
Second, Citi has sufficient tax planning strategies available to it under
ASC 740 that would be implemented to prevent a carry-forward from
expiring. These strategies include: repatriating low taxed foreign source
earnings for which an assertion that the earnings have been indefinitely
reinvested has not been made; accelerating U.S. taxable income into, or
deferring U.S. tax deductions out of, the latter years of the carry-forward
period (e.g., selling appreciated intangible assets, electing straight-line
depreciation); accelerating deductible temporary differences outside the
U.S.; and selling certain assets that produce tax-exempt income, while
purchasing assets that produce fully taxable income. In addition, the sale
or restructuring of certain businesses can produce significant U.S. taxable
income within the relevant carry-forward periods.