v2.4.1.9

Income Taxes | 12 Months Ended
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Dec. 31, 2014
Income Tax Disclosure [Abstract] |
Income Taxes |
16. | Income Taxes
Components of Earnings (Loss) before Income Taxes Components of earnings (loss) before income taxes for the years ended December 31 were as follows (in thousands):
|  | 2014 |  |  | 2013 |  |  | 2012 |
Domestic |  | $ | 390,874 |  |  | $ | (404,910) |  |  | $ | (65,566) |
International |  |  | 322,754 |  |  |  | 741,172 |  |  |  | (37,251) |
Earnings (loss) before income taxes |  | $ | 713,628 |  |  | $ | 336,262 |  |  | $ | (102,817) |
Summary of Current and Deferred Income Taxes Components of the provision for income taxes for the years ended December 31 were as follows (in thousands):
|  | 2014 |  |  | 2013 |  |  | 2012 |
Current income tax expense (benefit): |  |  |  |  |  |  |  |  |  |  |  |
United States federal |  | $ | (6,585) |  |  | $ | 20,009 |  |  | $ | (27,897) |
International |  |  | 52,155 |  |  |  | 99,478 |  |  |  | 46,294 |
State and local |  |  | 16,014 |  |  |  | 8,501 |  |  |  | 7,383 |
Total current tax expense |  |  | 61,584 |  |  |  | 127,988 |  |  |  | 25,780 |
Deferred income tax expense (benefit): |  |  |  |  |  |  |  |  |  |  |  |
United States federal |  |  | (27,374) |  |  |  | (1,133) |  |  |  | 152 |
International |  |  | (59,866) |  |  |  | (18,934) |  |  |  | (22,119) |
Total deferred tax benefit |  |  | (87,240) |  |  |  | (20,067) |  |  |  | (21,967) |
Total income tax expense (benefit), included in continuing and discontinued operations |  | $ | (25,656) |  |  | $ | 107,921 |  |  | $ | 3,813 |
Current Income Taxes Current income tax expense generally consists of federal income tax from our taxable REIT subsidiaries (“TRSs”), state and local income taxes and taxes incurred in foreign jurisdictions. Current income tax expense recognized during 2014 is principally due to tax triggered upon the contribution of the initial portfolio of properties by certain wholly-owned and AFORES entities to FIBRA Prologis, as the transaction was structured as an asset sale for Mexican tax purposes. The tax expense was netted against a current benefit recognized during 2014 from the operating losses generated by our United States TRS. Current tax expense in 2013 was due to the net tax expense recognized on the initial contribution of properties to PELP and NPR that were previously held in certain foreign jurisdictions and United States TRSs. For the years ended December 31, 2014, 2013 and 2012, we recognized a net benefit for uncertain tax positions of $1.1 million, $1.8 million and $28.5 million, respectively. The benefit that was recognized in all years relates to the reversal of certain expenses due to the expiration of the statute of limitations and settlements with the taxing authorities. During the years ended December 31, 2014, 2013 and 2012, cash paid for income taxes, net of refunds, was $105.4 million, $99.5 million and $38.4 million, respectively. Deferred Income Taxes Deferred income tax expense (benefit) is generally a function of the period’s temporary differences (principally basis differences between tax and financial reporting for real estate assets and equity investments) and generation of tax net operating losses that may be realized in future periods depending on sufficient taxable income. Deferred income tax assets and liabilities at December 31 were as follows (in thousands):
|  | 2014 |  |  | 2013 |
Gross deferred income tax assets: |  |  |  |  |  |  |  |
Net operating loss carryforwards (1) |  | $ | 346,978 |  |  | $ | 391,764 |
Basis difference - real estate properties |  |  | 105,205 |  |  |  | 133,767 |
Basis difference - equity investments |  |  | 12,401 |  |  |  | 9,238 |
Basis difference - intangibles |  |  | 5,952 |  |  |  | 8,113 |
Section 163(j) interest limitation |  |  | 32,703 |  |  |  | 33,224 |
Capital loss carryforward |  |  | 25,282 |  |  |  | 32,054 |
Other - temporary differences |  |  | 10,701 |  |  |  | 20,124 |
Total gross deferred income tax assets |  |  | 539,222 |  |  |  | 628,284 |
Valuation allowance |  |  | (518,241) |  |  |  | (583,675) |
Gross deferred income tax assets, net of valuation allowance |  |  | 20,981 |  |  |  | 44,609 |
Gross deferred income tax liabilities: |  |  |  |  |  |  |  |
Basis difference - real estate properties |  |  | 89,998 |  |  |  | 167,951 |
Built-in-gains - equity investments and real estate properties |  |  | - |  |  |  | 27,116 |
Basis difference- intangibles |  |  | 7,324 |  |  |  | 8,823 |
Other - temporary differences |  |  | 716 |  |  |  | 5,269 |
Total gross deferred income tax liabilities |  |  | 98,038 |  |  |  | 209,159 |
Net deferred income tax liabilities |  | $ | 77,057 |  |  | $ | 164,550 |
(1) | At December 31, 2014, we had net operating loss (“NOL”) carryforwards as follows (in millions):
|  | U.S. |  |  | Europe |  |  | Mexico |  |  | Japan |  |  | Other |
Gross NOL carryforward |  | $ | 92 |  |  | $ | 747 |  |  | $ | 246 |  |  | $ | 132 |  |  | $ | 67 |
Tax-effected NOL carryforward |  |  | 35 |  |  |  | 197 |  |  |  | 74 |  |  |  | 25 |  |  |  | 16 |
Valuation allowance |  |  | (35) |  |  |  | (188) |  |  |  | (74) |  |  |  | (25) |  |  |  | (16) |
Net deferred tax asset-NOL carryforward |  | $ | - |  |  | $ | 9 |  |  | $ | - |  |  | $ | - |  |  | $ | - |
Expiration periods |  |  | 2022-2033 |  |  |  | 2015-indefinite |  |  |  | 2015-2025 |  |  |  | 2015-2023 |  |  |  | 2015-indefinite |
The decrease in deferred income tax liabilities during 2014 is principally due to the reversal of deferred tax liabilities of $62.8 million in connection with the initial contribution of properties to FIBRA Prologis in June 2014, as discussed above, and $27.1 million due to the expiration of the holding period on properties previously acquired with existing built-in-gains. These decreases were partially offset by the reversal of deferred tax liabilities in 2013 related to the contribution of properties to PELP. In addition, we utilized net operating losses (“NOLs”), for which we had previously recorded a valuation allowance against, of $37.6 million which were generated in prior years to offset current income tax expense which was triggered as part of the FIBRA transaction. We record a valuation allowance against deferred tax assets in certain jurisdictions when we cannot sustain a conclusion that it is more likely than not that we can realize the deferred tax assets and NOL carryforwards during the periods in which these temporary differences become deductible. The deferred tax asset valuation allowance is adequate to reduce the total deferred tax asset to an amount that we estimate will “more-likely-than-not” be realized. Liability for Uncertain Tax Positions During the years ended December 31, 2014, 2013 and 2012, we believe that we have complied with the REIT requirements of the Internal Revenue Code. The statute of limitations for our tax returns is generally three years. As such, our tax returns that remain subject to examination would be primarily from 2011 and thereafter. The liability for uncertain tax positions principally consisted of estimated federal income tax liabilities and included accrued interest and penalties of $0.3 million and $0.9 million at December 31, 2014 and 2013, respectively. A reconciliation of the liability for uncertain tax positions for the years ended December 31 was as follows (in thousands):
|  | 2014 |  |  | 2013 |
Balance at January 1 |  | $ | 1,318 |  |  | $ | 7,943 |
Additions for tax positions taken during a prior year |  |  | 256 |  |  |  | 405 |
Settlements with taxing authorities |  |  | - |  |  |  | (7,030) |
Reductions due to lapse of applicable statute of limitations |  |  | (1,318) |  |  |  | - |
Balance at December 31 |  | $ | 256 |  |  | $ | 1,318 |

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 08 -Paragraph h -Article 4 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32559-109319 + Details
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