Halliburton 2015 Annual Report Download - page 82

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Reconciliations between the actual provision for income taxes on continuing operations and that computed by
applying the United States statutory rate to income (loss) from continuing operations before income taxes were as follows:
Year Ended December 31
2015 2014 2013
United States statutory rate 35.0% 35.0% 35.0%
Impact of foreign income taxed at different rates (15.6) (5.7) (9.3)
Venezuela devaluation 4.3
—
—
Valuation allowance against tax assets 3.5 (3.6) (0.1)
Impact of impairments and other charges (3.0)
—
—
Non-deductible acquisition costs 2.6
—
—
Adjustments of prior year taxes (0.7) 0.3 (0.6)
Other impact of foreign operations (0.5) (0.1) (0.7)
State income taxes 0.3 0.8 1.7
Domestic manufacturing deduction
—
(1.9) (2.0)
Other items, net 3.4 2.3 (0.5)
Total effective tax rate on continuing operations 29.3% 27.1% 23.5%
Our effective tax rate on continuing operations was 29.3% for 2015, 27.1% for 2014 and 23.5% for 2013. The
effective tax rate in all periods were positively impacted by lower tax rates in certain foreign jurisdictions. The effective tax rate
for 2015 was also impacted by the tax effects of the $2.2 billion of impairments and other charges, a change in mix of
geographic earnings in which we experienced low levels of United States income during the year, additional valuation
allowances booked on foreign deferred tax assets, a $199 million foreign currency exchange loss in Venezuela, and non-
deductible costs related to the pending Baker Hughes acquisition. The effective tax rate for 2014 was positively impacted by a
$201 million net operating loss valuation allowance released as a result of a reorganization of our legal structure in
Brazil. Partially offsetting these items were total charges of approximately $150 million for a write-off of certain prepaid tax
assets recorded in Iraq, additional tax expenses related to the settlement of a research and development credit with the United
States authorities, and tax expenses related to other unrecognized tax benefits, which are mostly included in "Other items, net"
in the table above.
We have not provided United States income taxes and foreign withholding taxes on the undistributed earnings of
foreign subsidiaries as of December 31, 2015 because we intend to permanently reinvest such earnings outside the United
States. If these foreign earnings were to be repatriated in the future, the related United States tax liability may be reduced by
any foreign income taxes previously paid on these earnings. As of December 31, 2015, the cumulative amount of earnings upon
which United States income taxes have not been provided is approximately $6.9 billion. It is not practicable to estimate the
amount of unrecognized deferred tax liability related to these earnings at this time.
The primary components of our deferred tax assets and liabilities were as follows:
December 31
Millions of dollars 2015 2014
Gross deferred tax assets:
Accrued liabilities $ 392 $ 494
Net operating loss carryforwards 540 462
Employee compensation and benefits 403 395
Foreign tax credit carry forward 365 79
Other 354 236
Total gross deferred tax assets 2,054 1,666
Gross deferred tax liabilities:
Depreciation and amortization 1,334 1,005
Other 109 111
Total gross deferred tax liabilities 1,443 1,116
Valuation allowances 213 184
Net deferred income tax asset $ 398 $ 366