Kimberly-Clark 2015 Annual Report Download - page 59

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Valuationallowancesattheendof2015primarilyrelatetotaxcreditsandincometaxlosscarryforwardsof$0.8billion.Iftheseitemsarenotutilizedagainst
taxableincome,$357ofthelosscarryforwardswillexpirefrom2016through2035.Theremaining$458havenoexpirationdate.
Realizationofincometaxlosscarryforwardsisdependentongeneratingsufficienttaxableincomepriortoexpirationofthesecarryforwards.Althoughrealization
isnotassured,webelieveitismorelikelythannotthatallofthedeferredtaxassets,netofapplicablevaluationallowances,willberealized.Theamountofthe
deferred tax assets considered realizable could be reduced or increased dueto changes in the tax environment orif estimates of future taxable income change
duringthecarryforwardperiod.
PresentedbelowisareconciliationoftheincometaxprovisioncomputedattheU.S.federalstatutorytaxratetotheactualeffectivetaxrate:
Year Ended December 31
2015
2014
2013
U.S.statutoryrateappliedtoincomebeforeincometaxes 35.0 %
35.0%
35.0%
Rateofstateincometaxes,netoffederaltaxbenefit (0.9)
0.7
2.7
StatutoryratesotherthanU.S.statutoryrate (6.9)
(3.0)
(3.0)
Venezueladeconsolidation,balancesheetremeasurementandinflationaryimpacts 4.5
4.9
(0.8)
Uncertaintaxpositionsadjustment(a) 3.7
—
—
Routinetaxincentives(b) (7.4)
(3.6)
(3.9)
Nettaxcostonforeignincome(b) 5.1
3.6
1.6
Other-net(c) (1.8)
0.4
(0.2)
Effectiveincometaxrate 31.3 %
38.0%
31.4%
(a) Inthefourthquarterof2015,weupdatedourassessmentofuncertaintaxpositionsforcertaininternationaloperationsandasaresultwerecordedanimmaterialincometaxchargeof$49
relatedtoprioryears.
(b) In2015,weaggregatedcertainitemstoprovideadditionalinformationonimpactstooureffectivetaxrate.Prioryearshavebeenrecasttoconformwiththe2015presentation.
(c) Other-netiscomposedofnumerousitems,noneofwhichisgreaterthan1.75percentofincomebeforeincometaxes.
AtDecember31,2015,U.S.incometaxesandforeignwithholdingtaxeshavenotbeenprovidedon$8.8billionofunremittedearningsofsubsidiariesoperating
outsidetheU.S.Theseearnings,whichareconsideredtobeinvestedindefinitely,wouldbecomesubjecttoincometaxiftheywereremittedasdividends,werelent
tooneofourU.S.entities,orifweweretosellourstockinthesubsidiaries.DeterminationoftheamountofunrecognizeddeferredU.S.incometaxliabilityon
theseunremittedearnings isnotpracticablebecause ofthecomplexitiesassociatedwiththishypothetical calculation.Wedonotexpectrestrictionsortaxes on
repatriationofcashheldoutsideoftheU.S.tohaveamaterialeffectonouroverallliquidity,financialconditionorresultsofoperationsintheforeseeablefuture.
Presentedbelowisareconciliationofthebeginningandendingamountsofunrecognizedincometaxbenefits:
2015
2014
2013
BalanceatJanuary1 $ 416
$ 473
$ 435
Grossincreasesfortaxpositionsofprioryears 80
36
73
Grossdecreasesfortaxpositionsofprioryears (61)
(91)
(31)
Grossincreasesfortaxpositionsofthecurrentyear 59
87
37
Settlements (63)
(77)
(35)
Other (25)
(12)
(6)
BalanceatDecember31 $ 406
$ 416
$ 473
OftheamountsrecordedasunrecognizedtaxbenefitsatDecember31,2015,$307wouldreduceoureffectivetaxrateifrecognized.
55 KIMBERLY-CLARKCORPORATION - 2015 Annual Report