Ford 2014 Annual Report Download - page 167

FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
NOTE 21. INCOME TAXES (Continued)
At December 31, 2014, $4.3 billion of non-U.S. earnings are considered indefinitely reinvested in operations outside
the United States, for which deferred taxes have not been provided. Repatriation of these earnings in their entirety would
result in a residual U.S. tax liability of about $200 million. Our measure of the amount of non-U.S. earnings considered
indefinitely reinvested in operations outside of the United States reflects accumulated earnings determined under U.S. tax
law. The reduction in these indefinitely reinvested earnings from year-end 2013 is primarily due to a change in our
methodology for measuring currency gains and losses in computing the earnings of our European operations under U.S.
tax law.
Components of Deferred Tax Assets and Liabilities
The components of deferred tax assets and liabilities at December 31 were as follows (in millions):
2014 2013
Deferred tax assets
Employee benefit plans $ 5,898 $ 5,060
Net operating loss carryforwards 2,624 2,364
Tax credit carryforwards 6,745 5,720
Research expenditures 1,754 2,236
Dealer and dealers’ customer allowances and claims 2,510 2,106
Other foreign deferred tax assets 298 1,567
Allowance for credit losses 155 143
All other 1,806 2,691
Total gross deferred tax assets 21,790 21,887
Less: valuation allowances (1,604)(1,633)
Total net deferred tax assets 20,186 20,254
Deferred tax liabilities
Leasing transactions 2,050 1,138
Deferred income 1,624 2,075
Depreciation and amortization (excluding leasing transactions) 1,967 2,430
Finance receivables 647 723
Other foreign deferred tax liabilities 352 311
All other 477 707
Total deferred tax liabilities 7,117 7,384
Net deferred tax assets/(liabilities) $13,069 $ 12,870
At December 31, 2014, we have a valuation allowance of $1.6 billion primarily for deferred tax assets related to our
South America operations.
Operating loss carryforwards for tax purposes were $7.2 billion at December 31, 2014, resulting in a deferred tax
asset of $2.6 billion. There is no expiration date for $6 billion of these losses. The remaining losses begin to expire in
2015, though a substantial portion expire beyond 2017. Tax credits available to offset future tax liabilities are $6.8 billion.
A substantial portion of these credits have a remaining carryforward period of 10 years or more. Tax benefits of operating
loss and tax credit carryforwards are evaluated on an ongoing basis, including a review of historical and projected future
operating results, the eligible carryforward period, and other circumstances.
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