XML 106 R32.htm IDEA: XBRL DOCUMENT
v2.4.1.9

Income Taxes | 12 Months Ended
--- | ---
Dec. 31, 2014
Income Tax Disclosure [Abstract] |
INCOME TAXES | INCOME TAXES Income Tax Provision The following table summarizes the expense for income taxes on continuing operations for the periods indicated:
|  | December 31,
|  | 2014 |  | 2013 |  | 2012
|  | (in millions)
Federal: |  |  |  |  |  |
Current |  | $ | — |  |  | $ | (28 | ) |  | $ | — |
Deferred |  | (121 | ) |  | (110 | ) |  | 24 |
State: |  |  |  |  |  |
Current |  | 1 |  |  | 1 |  |  | (2 | )
Deferred |  | 1 |  |  | 1 |  |  | (11 | )
Foreign: |  |  |  |  |  |
Current |  | 457 |  |  | 509 |  |  | 538 |
Deferred |  | 81 |  |  | (30 | ) |  | 136 |
Total |  | $ | 419 |  |  | $ | 343 |  |  | $ | 685 |
Effective and Statutory Rate Reconciliation The following table summarizes a reconciliation of the U.S. statutory federal income tax rate to the Company’s effective tax rate, as a percentage of income from continuing operations before taxes for the periods indicated:
|  | December 31,
|  | 2014 |  | 2013 |  | 2012
Statutory Federal tax rate |  | 35 | % |  | 35 | % |  | 35 | %
State taxes, net of Federal tax benefit |  | (1 | )% |  | (3 | )% |  | (21 | )%
Taxes on foreign earnings |  | (14 | )% |  | (4 | )% |  | (32 | )%
Valuation allowance |  | (1 | )% |  | — | % |  | 16 | %
Uncertain tax positions |  | — | % |  | (5 | )% |  | 9 | %
Bad debt deduction |  | — | % |  | (3 | )% |  | — | %
Change in tax law |  | 4 | % |  | (1 | )% |  | 17 | %
Goodwill impairment |  | 4 | % |  | 12 | % |  | 276 | %
Other—net |  | — | % |  | 2 | % |  | (2 | )%
Effective tax rate |  | 27 | % |  | 33 | % |  | 298 | %
Included in the favorable (14)% 2014 Taxes on foreign earnings percentage above is approximately (8)% related to the current year sale of approximately 45% of the Company's interest in Masin AES Pte Ltd., which owns the Company's interests in the Philippines, and the 2014 sale of the Company's interests in four U.K. wind projects. Neither of these transactions gave rise to income tax expense. Income Tax Receivables and Payables The current income taxes receivable and payable are included in Other Current Assets and Accrued and Other Liabilities, respectively, on the accompanying Consolidated Balance Sheets. The noncurrent income taxes receivable and payable are included in Other Noncurrent Assets and Other Noncurrent Liabilities, respectively, on the accompanying Consolidated Balance Sheets. The following table summarizes the income taxes receivable and payable as of December 31, 2014 and 2013:
|  | 2014 |  | 2013
|  | (in millions)
Income taxes receivable—current |  | $ | 217 |  |  | $ | 206 |
Total income taxes receivable |  | $ | 217 |  |  | $ | 206 |
Income taxes payable—current |  | $ | 299 |  |  | $ | 322 |
Income taxes payable—noncurrent |  | 2 |  |  | 2 |
Total income taxes payable |  | $ | 301 |  |  | $ | 324 |
Chilean Tax Reform — O n September 29, 2014, the Chilean government enacted comprehensive tax reforms which introduced significant changes to corporate income tax rates, a modification of the shareholder level tax beginning in 2017, and new “green” taxes primarily over CO 2 emissions beginning in 2017. Specifically, two systems of income tax were introduced: Attributed Profit System (“APS”) and Partially Integrated System (“PIS”). The Company expects to elect the APS system which taxes shareholders on an accrued profits basis. Under PIS, shareholders would be taxed on a cash basis. The corporate income tax rate was raised from 20% to 21% retroactive to January 1, 2014, and under APS is scheduled to increase in steps up to 25% for 2017 and beyond. Under PIS, the maximum rate is 27% and is effective for 2018 and beyond. The impact of remeasuring deferred taxes to account for the enacted change in future applicable income tax rates was recognized as discrete tax expense in the third quarter of this year and resulted in consolidated income tax expense of $46 million. The impacts of the shareholder level taxes and green taxes will be recognized in future periods and could be material. Deferred Income Taxes—Deferred income taxes reflect the net tax effects of (a) temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes and (b) operating loss and tax credit carryforwards. These items are stated at the enacted tax rates that are expected to be in effect when taxes are actually paid or recovered. As of December 31, 2014, the Company had federal net operating loss carryforwards for tax purposes of approximately $3.4 billion expiring in years 2021 to 2034. Approximately $87 million of the net operating loss carryforward related to stock option deductions will be recognized in additional paid-in capital when realized. The Company also had federal general business tax credit carryforwards of approximately $18 million expiring primarily from 2021 to 2034, and federal alternative minimum tax credits of approximately $5 million that carry forward without expiration. The Company had state net operating loss carryforwards as of December 31, 2014 of approximately $7.8 billion expiring in years 2016 to 2034. As of December 31, 2014, the Company had foreign net operating loss carryforwards of approximately $3.7 billion that expire at various times beginning in 2015 and some of which carry forward without expiration, and tax credits available in foreign jurisdictions of approximately $34 million, $26 million of which expire in 2018 to 2025 and $8 million of which carryforward without expiration. Valuation allowances decreased $93 million during 2014 to $997 million at December 31, 2014. This net decrease was primarily the result of valuation allowance activity at certain of our Brazilian subsidiaries and the release of valuation allowance against U.S. capital loss carryforwards. Valuation allowances increased $195 million during 2013 to $1.1 billion at December 31, 2013. This net increase was primarily the result of valuation allowance activity at one of our Brazilian subsidiaries. The Company believes that it is more likely than not that the net deferred tax assets as shown below will be realized when future taxable income is generated through the reversal of existing taxable temporary differences and income that is expected to be generated by businesses that have long-term contracts or a history of generating taxable income. The Company continues to monitor the utilization of its deferred tax asset for its U.S. consolidated net operating loss carryforward. Although management believes it is more likely than not that this deferred tax asset will be realized through generation of sufficient taxable income prior to expiration of the loss carryforwards, such realization is not assured. The following table summarizes the deferred tax assets and liabilities, as of December 31, 2014 and 2013:
|  | 2014 |  | 2013
|  | (in millions)
Differences between book and tax basis of property |  | $ | (2,364 | ) |  | $ | (2,178 | )
Other taxable temporary differences |  | (302 | ) |  | (337 | )
Total deferred tax liability |  | (2,666 | ) |  | (2,515 | )
Operating loss carryforwards |  | 2,224 |  |  | 2,108 |
Capital loss carryforwards |  | 137 |  |  | 103 |
Bad debt and other book provisions |  | 221 |  |  | 277 |
Retirement costs |  | 275 |  |  | 291 |
Tax credit carryforwards |  | 58 |  |  | 38 |
Other deductible temporary differences |  | 363 |  |  | 420 |
Total gross deferred tax asset |  | 3,278 |  |  | 3,237 |
Less: valuation allowance |  | (997 | ) |  | (1,090 | )
Total net deferred tax asset |  | 2,281 |  |  | 2,147 |
Net deferred tax asset (liability) |  | $ | (385 | ) |  | $ | (368 | )
The Company considers undistributed earnings of certain foreign subsidiaries to be indefinitely reinvested outside of the United States and, accordingly, no U.S. deferred taxes have been recorded with respect to such earnings in accordance with the relevant accounting guidance for income taxes. Should the earnings be remitted as dividends, the Company may be subject to additional U.S. taxes, net of allowable foreign tax credits. It is not practicable to estimate the amount of any additional taxes which may be payable on the undistributed earnings. Income from operations in certain countries is subject to reduced tax rates as a result of satisfying specific commitments regarding employment and capital investment. The Company’s income tax benefits related to the tax status of these operations are estimated to be $38 million, $70 million and $81 million for the years ended December 31, 2014, 2013 and 2012, respectively. The per share effect of these benefits after noncontrolling interests was $0.04, $0.09 and $0.10 for the years ended December 31, 2014, 2013 and 2012, respectively. The benefit related to our operations in the Philippines expired in the fourth quarter of 2014. The Company’s income tax benefits related to these specific operations are estimated to be $21 million, $41 million and $60 million for the years ended December 31, 2014, 2013 and 2012. The per share effect of these benefits after noncontrolling interests was $0.02, $0.05 and $0.07 for the years ended December 31, 2014, 2013 and 2012. The following table summarizes the income (loss) from continuing operations, before income taxes, net equity in earnings of affiliates and noncontrolling interests, for the years ended December 31, 2014, 2013 and 2012:
|  | 2014 |  | 2013 |  | 2012
|  | (in millions)
U.S. |  | $ | (560 | ) |  | $ | (575 | ) |  | $ | (1,921 | )
Non-U.S. |  | 2,136 |  |  | 1,623 |  |  | 2,151 |
Total |  | $ | 1,576 |  |  | $ | 1,048 |  |  | $ | 230 |
Uncertain Tax Positions Uncertain tax positions have been classified as noncurrent income tax liabilities unless expected to be paid in one year. The Company’s policy for interest and penalties related to income tax exposures is to recognize interest and penalties as a component of the provision for income taxes in the Consolidated Statements of Operations. As of December 31, 2014 and 2013, the total amount of gross accrued income tax related interest included in the Consolidated Balance Sheets was $14 million and $12 million, respectively. The total amount of gross accrued income tax related penalties included in the Consolidated Balance Sheets as of December 31, 2014 and 2013 was $1 million and $1 million, respectively. The total expense (benefit) for interest related to unrecognized tax benefits for the years ended December 31, 2014, 2013 and 2012 amounted to $3 million, $(4) million and $3 million, respectively. For the years ended December 31, 2014, 2013 and 2012, the total expense (benefit) for penalties related to unrecognized tax benefits amounted to $0 million, $(3) million and $1 million, respectively. We are potentially subject to income tax audits in numerous jurisdictions in the U.S. and internationally until the applicable statute of limitations expires. Tax audits by their nature are often complex and can require several years to complete. The following is a summary of tax years potentially subject to examination in the significant tax and business jurisdictions in which we operate:
Jurisdiction |  | Tax Years Subject to Examination
Argentina |  | 2008-2014
Brazil |  | 2009-2014
Chile |  | 2009-2014
Colombia |  | 2012-2014
Dominican Republic |  | 2011-2014
El Salvador |  | 2011-2014
Netherlands |  | 2012-2014
Philippines |  | 2011-2014
United Kingdom |  | 2009-2014
United States (Federal) |  | 2011-2014
As of December 31, 2014, 2013 and 2012, the total amount of unrecognized tax benefits was $395 million, $392 million and $475 million, respectively. The total amount of unrecognized tax benefits that would benefit the effective tax rate as of December 31, 2014, 2013 and 2012 is $366 million, $360 million and $444 million, respectively, of which $24 million, $26 million and $45 million, respectively, would be in the form of tax attributes that would warrant a full valuation allowance. The total amount of unrecognized tax benefits anticipated to result in a net decrease to unrecognized tax benefits within 12 months of December 31, 2014 is estimated to be between $10 million and $15 million, primarily relating to statute of limitation lapses and tax exam settlements. Below is a reconciliation of the beginning and ending amounts of unrecognized tax benefits for the periods indicated:
|  | December 31,
|  | 2014 |  | 2013 |  | 2012
|  | (in millions)
Balance at January 1 |  | $ | 392 |  |  | $ | 475 |  |  | $ | 464 |
Additions for current year tax positions |  | 8 |  |  | 7 |  |  | 12 |
Additions for tax positions of prior years |  | 14 |  |  | 10 |  |  | 29 |
Reductions for tax positions of prior years |  | (2 | ) |  | (3 | ) |  | (29 | )
Effects of foreign currency translation |  | (3 | ) |  | — |  |  | — |
Settlements |  | (2 | ) |  | (65 | ) |  | — |
Lapse of statute of limitations |  | (12 | ) |  | (32 | ) |  | (1 | )
Balance at December 31 |  | $ | 395 |  |  | $ | 392 |  |  | $ | 475 |
The Company and certain of its subsidiaries are currently under examination by the relevant taxing authorities for various tax years. The Company regularly assesses the potential outcome of these examinations in each of the taxing jurisdictions when determining the adequacy of the amount of unrecognized tax benefit recorded. While it is often difficult to predict the final outcome or the timing of resolution of any particular uncertain tax position, we believe we have appropriately accrued for our uncertain tax benefits. However, audit outcomes and the timing of audit settlements and future events that would impact our previously recorded unrecognized tax benefits and the range of anticipated increases or decreases in unrecognized tax benefits are subject to significant uncertainty. It is possible that the ultimate outcome of current or future examinations may exceed our provision for current unrecognized tax benefits in amounts that could be material, but cannot be estimated as of December 31, 2014. Our effective tax rate and net income in any given future period could therefore be materially impacted.

X
- Details
Name: | us-gaap_IncomeTaxDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- 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
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration