Travelers 2014 Annual Report Download - page 229

Table of Contents
THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
12. INCOME TAXES (Continued)
The net deferred tax asset comprises the tax effects of temporary differences related to the following assets and liabilities:
If the Company determines that any of its deferred tax assets will not result in future tax benefits, a valuation allowance must be established for
the portion of these assets that are not expected to be realized. Based upon a review of the Company's anticipated future taxable income, and also
including all other available evidence, both positive and negative, the Company's management concluded that it is more likely than not that the
gross deferred tax assets will be realized.
For tax return purposes, as of December 31, 2014, the Company had net operating loss (NOL) carryforwards in the United States, Canada and
the United Kingdom. The amount and timing of realizing the benefits of NOL carryforwards depend on future taxable income and limitations
imposed by tax laws. The benefits of the NOL carryforwards have been recognized in the consolidated financial statements and are included in net
deferred tax assets. The NOL amounts by jurisdiction and year of expiration are as follows:
U.S. income taxes have not been recognized on $647 million of the Company's foreign operations' undistributed earnings as of December 31,
2014, as such earnings are intended to be permanently reinvested in those operations. Furthermore, any taxes paid to foreign governments on these
earnings may be used as credits against the U.S. tax on any dividend distributions from such earnings.
228
(at December 31, in millions)
2014
2013
Deferred tax assets
Claims and claim adjustment expense reserves
$
768
$
825
Unearned premium reserves
709
693
Compensation - related liabilities
345
207
Other
346
356
Total gross deferred tax assets
2,168
2,081
Deferred tax liabilities
Deferred acquisition costs
565
554
Investments
1,267
931
Internally developed software
130
138
Other
173
155
Total gross deferred tax liabilities
2,135
1,778
Net deferred tax asset
$
33
$
303
(in millions)
Amount
Year of
expiration
United States
$
15
2018
Canada
6
2033
United Kingdom
133
None