Pizza Hut 2014 Annual Report Download - page 158

13MAR201517272138
PART II
ITEM 8 Financial Statements and Supplementary Data
The details of 2014 and 2013 deferred tax assets (liabilities) are set forth below:
2014 2013
Operating losses and tax credit carryforwards $ 433 $ 310
Employee benefits 238 182
Share-based compensation 119 118
Self-insured casualty claims 42 48
Lease-related liabilities 119 120
Various liabilities 73 88
Property, plant and equipment 39 42
Deferred income and other 102 58
Gross deferred tax assets 1,165 966
Deferred tax asset valuation allowances (228) (203)
Net deferred tax assets $ 937 $ 763
Intangible assets, including goodwill $ (148) $ (233)
Property, plant and equipment (63) (93)
Other (104) (55)
Gross deferred tax liabilities $ (315) $ (381)
Net deferred tax assets (liabilities) $ 622 $ 382
Reported in Consolidated Balance Sheets as:
Deferred income taxes – current $ 93 $ 123
Deferred income taxes – long-term 571 399
Accounts payable and other current liabilities (2) (2)
Other liabilities and deferred credits (40) (138)
$ 622 $ 382
We have investments in foreign subsidiaries where the carrying At December 27, 2014, the Company has foreign operating and
values for financial reporting exceed the tax basis. We have not capital loss carryforwards of $0.7 billion and U.S. state operating loss,
provided deferred tax on the portion of the excess that we believe is capital loss and tax credit carryforwards of $1.0 billion and U.S. federal
essentially permanent in duration. This amount may become taxable capital loss and tax credit carryforwards of $0.2 billion. These losses
upon an actual or deemed repatriation of assets from the subsidiaries are being carried forward in jurisdictions where we are permitted to
or a sale or liquidation of the subsidiaries. We estimate that our total use tax losses from prior periods to reduce future taxable income and
temporary difference upon which we have not provided deferred tax is will expire as follows:
approximately $2.0 billion at December 27, 2014. A determination of
the deferred tax liability on this amount is not practicable.
Year of Expiration
2015 2016 – 2019 2020 – 2034 Indefinitely Total
Foreign $ 62 $ 192 $ 96 $ 324 $ 674
U.S. state 18 90 888 — 996
U.S. federal — 89 157 — 246
$ 80 $ 371 $ 1,141 $ 324 $ 1,916
We recognize the benefit of positions taken or expected to be taken in The Company had $115 million and $243 million of unrecognized tax
tax returns in the financial statements when it is more likely than not benefits at December 27, 2014 and December 28, 2013, respectively,
that the position would be sustained upon examination by tax $17 million and $170 million of which, if recognized, would impact the
authorities. A recognized tax position is measured at the largest effective income tax rate. A reconciliation of the beginning and ending
amount of benefit that is greater than fifty percent likely of being amount of unrecognized tax benefits follows:
realized upon settlement.
2014 2013
Beginning of Year $ 243 $ 309
Additions on tax positions – current year 19 19
Additions for tax positions – prior years 31 55
Reductions for tax positions – prior years (20) (102)
Reductions for settlements (144) (23)
Reductions due to statute expiration (13) (16)
Foreign currency translation adjustment (1) 1
End of Year $ 115 $ 243
In 2014, the reduction in unrecognized tax benefits is primarily subsidiaries. See discussion below in the Internal Revenue Service
attributable to the resolution of the dispute with the IRS regarding the Adjustments for details.
valuation of rights to intangibles transferred to certain foreign
64 YUM! BRANDS, INC. - 2014 Form 10-K
Form 10-K