EFTA01382819.pdf

X- I /A Table of Contents FIRST DATA CORPORATION NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) Note 15: Income Taxes Year ended December 31, (In millions) 2014 2013 2012 Components of pretax (loss) income: Domestic $ (378) $ (843) $ (929) Foreign 195 173 124 $ (183) $ (670) $ (805) Provision (benefit) for income taxes: Federal $ 16 $ 39 $ (319) State and local 22 20 65 Foreign 44 46 II Income tax expense (benefit) $ 82 $ 105 S (243) Effective income tax rate (45)% (16)% 30% The Company's effective tax rates differ from statutory rates as follows: Year ended December 31, 2014 2013 2012 Federal statutory rate 35% 35% 35% State income taxes, net of federal income tax benefit (1) 2 1 Nontaxable income from noncontrolling interests 37 9 7 Impact of foreign operations (aXb) (9) (I) I Tax effects of foreign exchange gains/losses (6) I Valuation allowances (b) (103) (55) (19) Liability for unrecognized tax benefits (b) 12 4 Prior year adjustments (b) (7) (6) 2 Nondeductible bad debts (3) Other — (I ) 0) Effective tax rate (45)% (16)% 30% (a) The impact of foreign operations includes the effects of carvings and profits adjustments. foreign losses, and differences between foreign tax expense and foreign taxes eligible for the U.S. foreign tax credit. (b) The 2014, 2013. and 2012 effective tax rates were negatively impactal by a total of approximately 5%, 13%. and 8%. respectively, as a result of the current year cumulative correction of immaterial prior year errors. F-54 http://vanv.sec.gov/Archi vecledgar/dataN83980/000119312515334479/d31022dsla.htmill0/14/2015 9:06:38 AM] CONFIDENTIAL - PURSUANT TO FED. R. CRIM. P. 6(e) DB-SDNY-0082319 CONFIDENTIAL SONY GM_00228303 EFTA01382819