Orbitz 2014 Annual Report Download - page 75

ORBITZ WORLDWIDE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
75
Current and non-current deferred income tax assets and liabilities in various jurisdictions are composed of the following:
December 31, 2014 December 31, 2013
(in thousands)
Current deferred income tax assets/(liabilities):
Accrued liabilities and deferred income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,185 $ 3,422
Provision for bad debts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 314 199
Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,069)(1,854)
Tax sharing liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,295 6,774
Reserve accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,283 4,129
Valuation allowance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (509)(1,521)
Current net deferred income tax assets (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 10,499 $ 11,149
Non-current deferred income tax assets/(liabilities):
U.S. net operating loss carryforwards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 46,431 $ 51,887
Non-U.S. net operating loss carryforwards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93,244 92,637
Accrued liabilities and deferred income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,995 7,309
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66,462 84,434
Tax sharing liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22,571 22,339
Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,818 9,070
Valuation allowance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (108,714)(107,039)
Non-current net deferred income tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 135,807 $ 160,637
(a) The current portion of the deferred income tax asset at December 31, 2014 and 2013 is included in Other current
assets in our Consolidated Balance Sheets.
The net deferred tax assets at December 31, 2014 and 2013 amounted to $146.3 million and $171.8 million, respectively.
These net deferred tax assets largely relate to temporary tax to book differences and net operating loss carryforwards, the
realization of which is, in management’s judgment, more likely than not. We have assessed the likelihood of realization based
on our expectations of future taxable income, carry-forward periods available and other relevant factors.
As of December 31, 2014, we had U.S. federal and state net operating loss carry-forwards of approximately $119.6
million and $109.0 million, respectively, which expire between 2021 and 2034. In addition, we had $424.6 million of non-
U.S. net operating loss carry-forwards, most of which do not expire. Additionally, we had $4.4 million of U.S. federal and state
income tax credit carry-forwards which expire between 2027 and 2034 and $1.1 million of U.S. federal income tax credits
which have no expiration date. No provision has been made for U.S. federal or non-U.S. deferred income taxes on
approximately $16.5 million of accumulated and undistributed earnings of foreign subsidiaries at December 31, 2014. A
provision has not been established because it is our present intention to reinvest the undistributed earnings indefinitely in those
foreign operations. The determination of the amount of unrecognized U.S. federal or non-U.S. deferred income tax liabilities
for unremitted earnings at December 31, 2014 is not practicable. As of December 31, 2014, we have established a deferred
income tax liability on $2.0 million of accumulated and undistributed earnings in anticipation of the liquidation of an inactive
foreign subsidiary next year.
We have established a liability for unrecognized tax benefits. Once established, unrecognized tax benefits are adjusted if
more accurate information becomes available, or a change in circumstance or an event occurs necessitating a change to the
liability. Given the inherent complexities of the business and that we are subject to taxation in a substantial number of
jurisdictions, we routinely assess the likelihood of additional assessment in each of the taxing jurisdictions.