JCPenney 2015 Annual Report Download - page 96
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Table of Contents
Our deferred tax assets and liabilities were as follows:
Merchandise inventory
$ 39
$ 35
Accrued vacation pay
22
24
Gift cards
90
76
Stock-based compensation
77
76
Deferred equity adjustment
11
—
State taxes
15
25
Workers’ compensation/general liability
85
87
Accrued rent
37
35
Litigation exposure
32
—
Mirror savings plan
15
18
Pension and other retiree obligations
96
—
Net operating loss and tax credit carryforwards
1,072
1,100
Other
65
51
Total deferred tax assets
1,656
1,527
Valuation allowance
(1,025)
(784)
Total net deferred tax assets
631
743
Depreciation and amortization
(741)
(851)
Pension and other retiree obligations
—
(3)
Tax benefit transfers
(56)
(59)
Long-lived intangible assets
(28)
(21)
Total deferred tax liabilities
(825)
(934)
Total net deferred tax liabilities
$ (194)
$ (191)
Deferred tax assets and liabilities included in our Consolidated Balance Sheets were as follows:
Other current assets
$ 231
$ 172
Other long-term liabilities
(425)
(363)
Total net deferred tax liabilities
$ (194)
$ (191)
As of January 30, 2016, a valuation allowance of $1,025 million has been recorded against our deferred tax assets. In assessing the need for the valuation
allowance, we considered both positive and negative evidence related to the likelihood of realization of the deferred tax assets. As a result of our assessment,
we concluded that, beginning in the second quarter of 2013, our estimate of the realization of deferred tax assets would be based solely on the future reversals
of existing taxable temporary differences and tax planning strategies that we would make use of to accelerate taxable income to utilize expiring net operating
loss (NOL) and tax credit carryforwards.
In accordance with accounting standards, we are required to allocate a portion of our tax provision between operating losses and Accumulated other
comprehensive income/(loss). As a result, in 2013, we recorded a $250 million tax benefit in the Consolidated Statements of Operations offset by income tax
expense on actuarial gains recorded in Other comprehensive income/(loss). In 2015 and 2014, the company did not benefit any of its operating loss and
incurred an actuarial loss in Other comprehensive income/(loss), the tax benefit on which was fully offset by a valuation allowance within Other
comprehensive income/(loss).
For U.S. federal income tax purposes, we have $2.6 billion of gross NOL carryforwards that expire in 2032 through 2035 and $62 million of tax credit
carryforwards that expire at various dates through 2035. These NOL carryforwards include an
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