UPS 2015 Annual Report Download - page 125
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UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
113
Deferred tax liabilities and assets are comprised of the following at December 31 (in millions):
2015 2014
Fixed assets and capitalized software $ (4,776)$ (4,816)
Other (699)(424)
Deferred tax liabilities (5,475)(5,240)
Pension and postretirement benefits 3,915 4,722
Loss and credit carryforwards 261 250
Insurance reserves 730 745
Stock compensation 256 242
Other 650 630
Deferred tax assets 5,812 6,589
Deferred tax assets valuation allowance (197)(208)
Deferred tax asset (net of valuation allowance) 5,615 6,381
Net deferred tax asset $ 140 $ 1,141
Amounts recognized in the consolidated balance sheets:
Non-current deferred tax assets $ 255 $ 1,219
Non-current deferred tax liabilities (115)(78)
Net deferred tax asset $ 140 $ 1,141
The valuation allowance changed by $(11), $(43) and $31 million during the years ended December 31, 2015, 2014 and
2013, respectively.
We have U.S. state and local operating loss and credit carryforwards as follows (in millions):
2015 2014
U.S. state and local operating loss carryforwards $ 894 $ 815
U.S. state and local credit carryforwards $ 53 $ 52
The U.S. state and local operating loss carryforwards expire at varying dates through 2035. The U.S. state and local
credits can be carried forward for periods ranging from three years to indefinitely. We also have non-U.S. loss carryforwards of
approximately $583 million as of December 31, 2015, the majority of which may be carried forward indefinitely. As indicated
in the table above, we have established a valuation allowance for certain non-U.S. and state carryforwards, due to the
uncertainty resulting from a lack of previous taxable income within the applicable tax jurisdictions.
Undistributed earnings of foreign subsidiaries amounted to approximately $4.954 billion at December 31, 2015. Those
earnings are considered to be indefinitely reinvested and, accordingly, no deferred income taxes have been provided thereon.
Upon distribution of those earnings in the form of dividends or otherwise, we would be subject to income taxes and withholding
taxes payable in various jurisdictions, which could potentially be offset by foreign tax credits. Determination of the amount of
unrecognized deferred income tax liability is not practicable because of the complexities associated with its hypothetical
calculation.