DELPHI 2015 Annual Report Download - page 123

Table of Contents
101
The provision (benefit) for income taxes from continuing operations is comprised of:
Year Ended December 31,
2015 2014 2013
(in millions)
Current income tax expense (benefit):
U.S. federal ......................................................................................................... $ 49 $ 46 $ 57
Non-U.S. ............................................................................................................. 236 205 219
U.S. state and local ............................................................................................. (1) 9 6
Total current ..................................................................................................... 284 260 282
Deferred income tax (benefit) expense, net:
U.S. federal ......................................................................................................... (12)(32)(23)
Non-U.S. ............................................................................................................. (7) 29 (18)
U.S. state and local ............................................................................................. (2)(2)(1)
Total deferred ................................................................................................... (21)(5)(42)
Total income tax provision............................................................................. $ 263 $ 255 $ 240
The current income tax payable was reduced by $11 million, $9 million and $1 million in the years ended December 31,
2015, 2014 and 2013, respectively, for excess tax deductions attributable to stock-based compensation, including amounts
attributable to discontinued operations. The related income tax benefits are recorded as increases to additional paid-in capital.
Cash paid or withheld for income taxes was $292 million, $266 million and $256 million for the years ended December
31, 2015, 2014 and 2013.
For purposes of comparability and consistency, the Company uses the notional U.S. federal income tax rate when
presenting the Company’s reconciliation of the income tax provision. The Company is a U.K. resident taxpayer and as such is
not generally subject to U.K. tax on remitted foreign earnings. As a result, the Company does not anticipate foreign earnings
would be subject to a 35% tax rate upon repatriation to the U.K., as is the case when U.S. based companies repatriate earnings
to the U.S. A reconciliation of the provision for income taxes compared with the amounts at the notional U.S. federal statutory
rate was:
Year Ended December 31,
2015 2014 2013
(in millions)
Notional U.S. federal income taxes at statutory rate............................................. $ 527 $ 566 $ 513
Income taxed at other rates ................................................................................... (207)(286)(273)
Change in valuation allowance ............................................................................. 15 18 6
Other change in tax reserves ................................................................................. 8(4)(13)
Withholding taxes ................................................................................................. 57 57 48
Tax credits............................................................................................................. (133)(89)(52)
Change in tax law.................................................................................................. 11 — 15
Other adjustments ................................................................................................. (15)(7)(4)
Total income tax expense................................................................................. $ 263 $ 255 $ 240
Effective tax rate ................................................................................................... 17% 16% 16%
The Company’s tax rate is affected by the tax rates in the jurisdictions in which the Company operates, the relative
amount of income earned by jurisdiction, jurisdictions with a statutory tax rate less than the U.S. rate of 35% and the relative
amount of losses or income for which no tax benefit or expense was recognized due to a valuation allowance. Included in the
non-U.S. incomes taxes at other rates are tax incentives obtained in various non-U.S. countries, primarily the Hi-Tech
Enterprise status in China, a Free Trade Zone exemption in Honduras and the Special Economic Zone exemption in Turkey of
$92 million in 2015, $67 million in 2014, and $71 million in 2013, and tax benefit for income earned in jurisdictions where a
valuation allowance has been recorded. The Company currently benefits from tax holidays in various non-U.S. jurisdictions
with expiration dates from 2015 through 2026. The income tax benefits attributable to these tax holidays are approximately $16
million ($0.06 per share) in 2015, $28 million ($0.09 per share) in 2014 and $23 million ($0.07 per share) in 2013.