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E. I. du Pont de Nemours and Company
Notes to the Consolidated Financial Statements (continued)
(Dollars in millions, except per share)
F-17
5. PROVISION FOR INCOME TAXES
2014 2013 2012
Current tax expense on continuing operations:
U.S. federal $ 778 $ 160 $ 121
U.S. state and local 62 23 16
International 516 677 663
Total current tax expense on continuing operations 1,356 860 800
Deferred tax expense (benefit) on continuing operations:
U.S. federal 81 (193)(105)
U.S. state and local (44)(65)(46)
International (23) 24 (33)
Total deferred tax expense (benefit) on continuing operations 14 (234)(184)
Provision for income taxes on continuing operations $ 1,370 $ 626 $ 616
The significant components of deferred tax assets and liabilities at December 31, 2014 and 2013, are as follows:
2014 2013
Asset Liability Asset Liability
Depreciation $ — $ 1,612 $ — $ 1,707
Accrued employee benefits 5,258 555 3,754 512
Other accrued expenses 623 — 811 87
Inventories 305 156 275 151
Unrealized exchange gains/losses — 165 65 —
Tax loss/tax credit carryforwards/backs 2,466 — 2,622 —
Investment in subsidiaries and affiliates 144 185 189 245
Amortization of intangibles 120 1,312 109 1,372
Other 328 91 316 159
Valuation allowance (1,757) — (1,764) —
$ 7,487 $ 4,076 $ 6,377 $ 4,233
Net deferred tax asset $ 3,411 $ 2,144
An analysis of the company's effective income tax rate (EITR) on continuing operations is as follows:
2014 2013 2012
Statutory U.S. federal income tax rate 35.0% 35.0% 35.0%
Exchange gains/losses17.4 0.8 0.1
Domestic operations (2.1)(3.2)(2.3)
Lower effective tax rates on international operations-net2(11.3)(12.3)(10.9)
Tax settlements (0.6)(0.2)(2.0)
Sale of a business (0.3) — —
U.S. research & development credit 2(0.7)(2.2) —
27.4% 17.9% 19.9%
1. Principally reflects the impact of foreign exchange losses on net monetary assets for which no corresponding tax benefit is realized. Further information
about the company's foreign currency hedging program is included in Note 19 under the heading Foreign Currency Risk.
2. On January 2, 2013, U.S. tax law was enacted which extended through 2013 (and retroactive to 2012) several expired or expiring temporary business tax
provisions. In accordance with GAAP, this extension was taken into account in the quarter in which the legislation was enacted (i.e. first quarter 2013).