SEC Filings


10-K
CUMMINS INC filed this Form 10-K on 02/11/2019
Entire Document
 

Carryforward tax benefits and the tax effect of temporary differences between financial and tax reporting that give rise to net deferred tax (liabilities) assets were as follows:
 
 
December 31,
In millions
 
2018
 
2017
Deferred tax assets
 
 
 
 
U.S. state carryforward benefits
 
$
191

 
$
200

Foreign carryforward benefits
 
149

 
159

Employee benefit plans
 
245

 
274

Warranty expenses
 
401

 
300

Accrued expenses
 
94

 
95

Other
 
65

 
70

Gross deferred tax assets
 
1,145

 
1,098

Valuation allowance
 
(327
)
 
(347
)
Total deferred tax assets
 
818

 
751

Deferred tax liabilities
 
 
 
 
Property, plant and equipment
 
(255
)
 
(250
)
Unremitted income of foreign subsidiaries and joint ventures
 
(184
)
 
(331
)
Employee benefit plans
 
(202
)
 
(224
)
Other
 
(30
)
 
(31
)
Total deferred tax liabilities
 
(671
)
 
(836
)
Net deferred tax assets (liabilities)
 
$
147

 
$
(85
)

Our 2018 U.S. carryforward benefits include $191 million of state credit and net operating loss carryforward benefits that begin to expire in 2019. Our foreign carryforward benefits include $149 million of net operating loss carryforwards that begin to expire in 2019. A valuation allowance is recorded to reduce the gross deferred tax assets to an amount we believe is more likely than not to be realized. The valuation allowance is $327 million and decreased in 2018 by a net $20 million. The valuation allowance is primarily attributable to the uncertainty regarding the realization of a portion of the U.S. state and foreign net operating loss and tax credit carryforward benefits.
Our Consolidated Balance Sheets contain the following tax related items:
 
 
December 31,
In millions
 
2018
 
2017
Prepaid and other current assets
 
 
 
 
Refundable income taxes
 
$
117

 
$
152

Other assets
 
 
 
 
Deferred income tax assets
 
410

 
306

Long-term refundable income taxes
 
6

 
6

Accrued expenses
 
 
 
 
Income tax payable
 
97

 
77

Other liabilities and deferred revenue
 
 
 
 
Income tax payable
 
293

 
281

Deferred income tax liabilities
 
263

 
391




85