Time Warner Cable 2014 Annual Report Download - page 114

TIME WARNER CABLE INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Changes in deferred income tax liabilities, net, from January 1 through December 31 are presented below
(in millions):
2014 2013 2012
Balance at beginning of year ....................................... $ (11,764) $ (10,963) $ (9,931)
Deferred income tax provision ...................................... (756) (363) (562)
Business acquisitions(a) ............................................ — 5 (530)
Recorded directly to TWC shareholders’ equity as a component of
accumulated other comprehensive income (loss), net:
Change in accumulated unrealized losses on pension benefit obligation .... 230 (377) 100
Change in accumulated deferred gains (losses) on cash flow hedges ...... (1) (66) (40)
Balance at end of year ............................................ $ (12,291) $ (11,764) $ (10,963)
(a) Amounts relate to the acquisition of Insight.
Uncertain Income Tax Positions
The Company recognizes income tax benefits for those income tax positions determined more likely than not to be
sustained upon examination, based on the technical merits of the positions. The reserve for uncertain income tax positions
is included in other liabilities in the consolidated balance sheet. Changes in the reserve for uncertain income tax positions,
excluding the related accrual for interest and penalties, from January 1 through December 31 are presented below (in
millions):
2014 2013 2012
Balance at beginning of year ....................................... $ 108 $ 73 $ 50
Additions for prior year tax positions ................................ 16 30 17
Additions for current year tax positions .............................. 13 19 21
Reductions for prior year tax positions ............................... (5) — —
Lapses in statute of limitations ..................................... (5) (3) (3)
Settlements and reversals of timing differences ........................ (15) (11) (12)
Balance at end of year ............................................ $ 112 $ 108 $ 73
If the Company were to recognize the benefits of these uncertain income tax positions, the income tax provision and
effective tax rate would be impacted by $74 million, $68 million and $50 million, including interest and penalties and net
of the federal and state benefit for income taxes, for the years ended December 31, 2014, 2013 and 2012, respectively.
These benefit amounts include interest and penalties of $15 million, $20 million and $15 million for the years ended
December 31, 2014, 2013 and 2012, respectively, net of the federal and state benefit for income taxes.
The impact of temporary differences and tax attributes are considered when calculating accruals for interest and
penalties associated with the reserve for uncertain income tax positions. The amount accrued for interest and penalties,
before the federal and state benefit for income taxes, as of December 31, 2014 and 2013 was $20 million and $28 million,
respectively. The Company recognizes interest and penalties accrued on uncertain income tax positions as part of the
income tax provision. The income tax provision for the years ended December 31, 2014, 2013 and 2012 includes
provision (benefit) related to interest and penalties, before the federal and state provision (benefit) for income taxes, of
$(7) million, $6 million and $6 million, respectively.
The Company has determined that it is reasonably possible that its existing reserve for uncertain income tax positions
as of December 31, 2014 could decrease by up to approximately $17 million during the twelve-month period ending
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