Lowe's 2015 Annual Report Download - page 65

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56
The components of the income tax provision are as follows:
(In millions)
2015
2014
2013
Current:
Federal
$
1,688
$
1,475
$
1,342
State
248
221
203
Total current
1,936
1,696
1,545
Deferred:
Federal
(59
)
(112
)
(133
)
State
(4
)
(6
)
(25
)
Total deferred
(63
)
(118
)
(158
)
Total income tax provision
$
1,873
$
1,578
$
1,387
The tax effects of cumulative temporary differences that gave rise to the deferred tax assets and liabilities were as follows:
(In millions)
January 29,
2016
January 30,
2015
Deferred tax assets:
Self-insurance
$
369
$
378
Share-based payment expense
83
81
Deferred rent
91
88
Impairment of equity method investment
270
—
Foreign currency translation
107
62
Net operating losses
159
152
Other, net
156
131
Total deferred tax assets
1,235
892
Valuation allowance
(447
)
(170
)
Net deferred tax assets
788
722
Deferred tax liabilities:
Property
(507
)
(534
)
Other, net
(40
)
(55
)
Total deferred tax liabilities
(547
)
(589
)
Net deferred tax asset
$
241
$
133
As of January 29, 2016, the Company reported a deferred tax asset of $270 million related to its intention to exit from the
Company’s joint venture investment in Australia. The Company established a full valuation allowance against the deferred tax
asset related to these losses generated from impairments and equity method losses. These losses are collectively considered
capital losses, having a five year carryforward period, and can only be used to offset capital gain income. No present or future
capital gains have been identified through which this deferred tax asset can be realized.
The Company operates as a branch in various foreign jurisdictions and cumulatively has incurred net operating losses of $580
million and $557 million as of January 29, 2016, and January 30, 2015, respectively. These net operating losses are subject to
expiration in 2017 through 2035. Deferred tax assets have been established for these foreign net operating losses in the
accompanying consolidated balance sheets. Given the uncertainty regarding the realization of the foreign net deferred tax
assets, the Company recorded cumulative valuation allowances of $177 million and $170 million as of January 29, 2016, and
January 30, 2015, respectively.
The Company has not provided for deferred income taxes on accumulated but undistributed earnings of the Company’s foreign
operations of approximately $153 million and $112 million as of January 29, 2016, and January 30, 2015, respectively, due to
its intention to permanently reinvest these earnings outside the U.S. It is not practicable to determine the income tax liability