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Table of Contents
ORACLE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
May 31, 2015
The components of our deferred tax liabilities and assets were as follows:
We provide for United States income taxes on the undistributed earnings and the other outside basis temporary differences of foreign
subsidiaries unless they are considered indefinitely reinvested outside the United States. At May 31, 2015, the amount of temporary differences
related to undistributed earnings and other outside basis temporary differences of investments in foreign subsidiaries upon which United States
income taxes have not been provided was approximately $38.0 billion and $8.4 billion, respectively. If these undistributed earnings were
repatriated to the United States, or if the other outside basis differences were recognized in a taxable transaction, they would generate foreign tax
credits that would reduce the federal tax liability associated with the foreign dividend or the otherwise taxable transaction. At May 31, 2015,
assuming a full utilization of the foreign tax credits, the potential net deferred tax liability associated with these temporary differences of
undistributed earnings and other outside basis temporary differences would be approximately $11.8 billion and $2.7 billion, respectively.
Our net deferred tax assets were $993 million and $1.4 billion as of May 31, 2015 and 2014, respectively. We believe it is more likely than not
that the net deferred tax assets will be realized in the foreseeable future. Realization of our net deferred tax assets is dependent upon our
generation of sufficient taxable income in future years in appropriate tax jurisdictions to obtain benefit from the reversal of temporary
differences, net operating loss carryforwards and tax credit carryforwards. The amount of net deferred tax assets considered realizable is subject
to adjustment in future periods if estimates of future taxable income change.
129
May 31,
(in millions)
2015
2014
Deferred tax liabilities:
Unrealized gain on stock
$
(130
)
$
(130
)
Acquired intangible assets
(1,879
)
(1,804
)
Unremitted earnings
(646
)
(510
)
Other
(11
)
—
Total deferred tax liabilities
$
(2,666
)
$
(2,444
)
Deferred tax assets:
Accruals and allowances
$
421
$
440
Employee compensation and benefits
1,123
1,062
Differences in timing of revenue recognition
335
210
Depreciation and amortization
155
243
Tax credit and net operating loss carryforwards
2,649
2,810
Other
—
96
Total deferred tax assets
$
4,683
$
4,861
Valuation allowance
$
(1,024
)
$
(1,053
)
Net deferred tax assets
$
993
$
1,364
Recorded as:
Current deferred tax assets
$
663
$
914
Non
-
current deferred tax assets
795
837
Current deferred tax liabilities (in other current liabilities)
(85
)
(129
)
Non
-
current deferred tax liabilities (in other non
-
current liabilities)
(380
)
(258
)
Net deferred tax assets
$
993
$
1,364