Kroger 2015 Annual Report Download - page 122
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A-48
The tax effects of significant temporary differences that comprise tax balances were as follows:
2015 2014
Current deferred tax assets:
Net operating loss and credit carryforwards $ 10 $ 5
Compensation related costs 83 88
Other 61 14
Subtotal 154 107
Valuation allowance (9) (7)
Total current deferred tax assets 145 100
Current deferred tax liabilities:
Insurance related costs (56) (99)
Inventory related costs (310) (288)
Total current deferred tax liabilities (366) (387)
Current deferred taxes $ (221) $ (287)
Long-term deferred tax assets:
Compensation related costs $ 709 $ 721
Lease accounting 106 129
Closed store reserves 57 50
Insurance related costs 29 77
Net operating loss and credit carryforwards 128 115
Other 17 2
Subtotal 1,046 1,094
Valuation allowance (43) (42)
Total long-term deferred tax assets 1,003 1,052
Long-term deferred tax liabilities:
Depreciation and amortization (2,755) (2,261)
Total long-term deferred tax liabilities (2,755) (2,261)
Long-term deferred taxes $ (1,752) $(1,209)
On November 19, 2015, the Internal Revenue Service issued implementation guidance for retailers
with respect to recently issued tangible property regulations. The adoption of this guidance resulted in
the immediate deduction of qualifying costs related to current and prior year store remodels, resulting
in an increase in long-term deferred tax liability and current income tax receivable. The adoption of this
guidance, along with the impact of the Roundy’s merger, resulted in the increase in the deferred tax
liability related to depreciation and amortization from January 31, 2015 to January 30, 2016.
At January 30, 2016, the Company had net operating loss carryforwards for state income tax
purposes of $1,460. These net operating loss carryforwards expire from 2016 through 2036. The
utilization of certain of the Company’s state net operating loss carryforwards may be limited in a given
year. Further, based on the analysis described below, the Company has recorded a valuation allowance
against some of the deferred tax assets resulting from its state net operating losses.