Quest Diagnostics 2015 Annual Report Download - page 100
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QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED
(in millions unless otherwise indicated)
F- 25
The components of income tax expense from continuing operations for 2015, 2014 and 2013 were as follows:
2015 2014 2013
Current:
Federal $ 231 $ 204 $ 417
State and local 27 34 59
Foreign 3 3 4
Deferred:
Federal 104 28 27
State and local 7 (6)(6)
Foreign 1 (1)(1)
Total $ 373 $ 262 $ 500
A reconciliation of the federal statutory rate to the Company's effective tax rate for 2015, 2014 and 2013 was as
follows:
2015 2014 2013
Tax provision at statutory rate 35.0% 35.0% 35.0%
State and local income taxes, net of federal benefit 2.6 3.2 2.8
Impact of foreign operations — (0.2)(0.3)
Tax credits (0.5)(0.8)(0.4)
Deferred taxes on gains and losses (2.7) — —
Adjustments to unrecognized tax positions (the net benefit mainly results from
favorable resolution of certain tax contingencies) (0.4)(5.1) 1.5
Non-deductible expenses, primarily meals and entertainment expenses 0.5 0.4 0.3
Impact of noncontrolling interests (1.6)(1.7)(1.0)
Impact of equity earnings 0.7 1.1 0.6
Other, net 0.2 (0.1)(0.7)
Effective tax rate 33.8% 31.8% 37.8%
The tax effects of temporary differences that give rise to significant portions of the deferred tax assets (liabilities) at
December 31, 2015 and 2014 were as follows:
2015 2014
Current deferred tax assets:
Accounts receivable reserves $ — $ 91
Liabilities not currently deductible — 78
Total current deferred tax assets $ — $ 169
Non-current deferred tax assets (liabilities):
Accounts receivable reserves $ 95 $ —
Liabilities not currently deductible 202 138
Stock-based compensation 49 42
Capitalized R&D expense 1 3
Basis differences in investments, joint ventures and subsidiaries (90) —
Net operating loss carryforwards, net of valuation allowance 140 165
Depreciation and amortization (517)(519)
Total non-current deferred tax liabilities, net $ (120) $ (171)
QUEST DIAGNOSTICS 2015 ANNUAL REPORT ON FORM 10-K