First Data 2014 Annual Report Download - page 95

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The Company’s deferred tax assets and liabilities were included in the Consolidated Balance Sheets as follows:
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


Current deferred tax assets
$ 86.0
$ 103.5
Current deferred tax liabilities
(6.3)
(0.8)
Long-term deferred tax assets
18.6
2.8
Long-term deferred tax liabilities
(520.9)
(553.0)
Net deferred tax liabilities
$ (422.6) $ (447.5)
As of December 31, 2014 and 2013, the Company had recorded valuation allowances of $1.6 billion and $1.5 billion, respectively, against its net deferred
tax assets. The increase to the valuation allowance of $195 million in 2014 was primarily due to current year federal, state, and foreign net operating losses
which may not be utilized within the statute of limitations. Included in the total change to the valuation allowance was a release in a certain foreign
jurisdiction due to improved financial performance. In determining the necessary amount of valuation allowance, the Company has considered a tax
planning strategy related to its investments in affiliates. Implementation of this strategy would result in the immediate reversal of temporary differences
associated with the excess of book basis over tax basis in the investments.
The following table presents the amounts of federal, state, and foreign net operating loss carryforwards and foreign tax credit, general business credit, and
minimum tax credit carryforwards:
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 
Federal net operating loss carryforwards (a) $ 2,828.3
State net operating loss carryforwards (a) 4,719.0
Foreign net operating loss carryforwards (b) 2,762.8
Foreign tax credit carryforwards (c) 215.7
General business credit carryforwards (d) 11.8
Minimum tax credit carryforwards (e) 1.6
(a) If not utilized, these carryforwards will expire in years 2015 through 2034.
(b) Foreign net operating loss carryforwards of $62 million, if not utilized, will expire in years 2015 through 2034. The remaining foreign net operating loss carryforwards of $2.7
billion have an indefinite life.
(c) If not utilized, these carryforwards will expire in years 2018 through 2024.
(d) If not utilized, these carryforwards will expire in years 2027 through 2033.
(e) These carryforwards have an indefinite life.
In addition to the federal net operating loss carryforwards stated above, as a result of being a part of the U.S. consolidated tax return filing with FDH, the
Company is allocated another $464 million of net operating loss as of December 31, 2014.
The Company intends to indefinitely invest its net equity in its foreign operations, with the exception of any undistributed foreign earnings. Accordingly, as
of December 31, 2014, no provision had been made for U.S. federal and state income taxes on the cumulative amount of temporary differences related to
investments in foreign subsidiaries, other than those differences related to the undistributed earnings. Upon sale or liquidation of these investments, the
Company would potentially be subject to U.S., state, and foreign income taxes and withholding taxes payable to the various foreign countries. Determination
of the amount of unrecognized deferred tax liability is not practicable because of the complexities associated with its hypothetical calculation.
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