Annual report pursuant to Section 13 and 15(d)

Income Taxes (Tables)

v2.4.1.9
Income Taxes (Tables)
12 Months Ended
Dec. 31, 2014
Income Tax Disclosure [Abstract]  
Schedule of earnings before income taxes by jurisdiction
The sources of Earnings before income taxes were as follows:
(in millions)
2014
 
2013
 
2012
United States
$
242.9

 
$
153.3

 
$
111.8

Foreign
45.0

 
55.6

 
44.2

Earnings before income taxes
$
287.9

 
$
208.9

 
$
156.0

Schedule of components of income tax provision (benefit)
The Income tax provision (benefit) consisted of the following:
(in millions)
2014
 
2013
 
2012
Current tax expense:
 
 
 
 
 
U.S. Federal
$
18.2

 
$
32.4

 
$
4.0

State and local
2.6

 
5.8

 
1.3

Foreign
23.9

 
18.3

 
17.8

Total current
44.7

 
56.5

 
23.1

 
 
 
 
 
 
Deferred tax expense (benefit):
 
 
 
 
 
U.S. Federal
42.4

 
(514.6
)
 
11.5

State and local
5.7

 
(86.2
)
 
(0.4
)
Foreign
0.2

 
(3.6
)
 
(2.8
)
Total deferred
48.3

 
(604.4
)
 
8.3

 
 
 
 
 
 
Income tax provision (benefit)
$
93.0

 
$
(547.9
)
 
$
31.4

Schedule of deferred tax assets and liabilities
Temporary differences and carryforwards giving rise to deferred tax assets and liabilities at December 31, 2014 and 2013, were as follows:
(in millions)
2014
 
2013
Current deferred tax assets:
 
 
 
Product warranties
$
40.7

 
$
44.0

Sales incentives and discounts
28.3

 
26.7

Tax credit carryforwards
57.2

 

Other
98.7

 
83.6

Gross current deferred tax assets
224.9

 
154.3

Valuation allowance
(10.6
)
 
(11.6
)
Total net current deferred tax assets
214.3

 
142.7

 
 
 
 
Current deferred tax liabilities:
 
 
 
Other
(6.4
)
 
(5.1
)
Total current deferred tax liabilities
(6.4
)
 
(5.1
)
Total net current deferred tax assets
$
207.9

 
$
137.6

 
 
 
 
Non-current deferred tax assets:
 
 
 
Pension
$
131.5

 
$
107.8

Loss carryforwards
68.4

 
93.1

Tax credit carryforwards
35.0

 
163.2

Depreciation and amortization
51.0

 
53.8

Deferred compensation
29.5

 
27.6

Postretirement and postemployment benefits
22.0

 
24.3

Deferred revenue
24.7

 
16.6

Equity compensation
22.3

 
19.4

Other
16.4

 
15.1

Gross non-current deferred tax assets
400.8

 
520.9

Valuation allowance
(58.4
)
 
(76.6
)
  Total net non-current deferred tax assets
342.4

 
444.3

 
 
 
 
Non-current deferred tax liabilities:
 
 
 
Unremitted foreign earnings and withholding
(19.3
)
 
(24.6
)
State and local income taxes
(35.3
)
 
(40.0
)
Other
(0.1
)
 
(2.7
)
Total non-current deferred tax liabilities
(54.7
)
 
(67.3
)
 
 
 
 
Total net non-current deferred tax assets (liabilities)
$
287.7

 
$
377.0

Reconciliation of unrecognized tax benefits
The following is a reconciliation of the total amounts of unrecognized tax benefits excluding interest and penalties for the 2014 and 2013 annual reporting periods:
(in millions)
2014
 
2013
Balance at January 1
$
6.0

 
$
24.7

Gross increases - tax positions prior periods
0.5

 
3.8

Gross decreases - tax positions prior periods
(0.4
)
 
(4.3
)
Gross increases - current period tax positions
0.7

 
1.1

Decreases - settlements with taxing authorities
(0.7
)
 
(8.0
)
Reductions - lapse of statute of limitations
(1.2
)
 
(11.4
)
Other
(0.1
)
 
0.1

Balance at December 31
$
4.8

 
$
6.0

Reconciliation of income taxes at the statutory Federal income tax rate to income tax provision (benefit)
The difference between the actual income tax provision (benefit) and the tax provision computed by applying the statutory Federal income tax rate to Earnings before income taxes is attributable to the following:
(in millions)
2014
 
2013
 
2012
Income tax provision at 35 percent
$
100.7

 
$
73.1

 
$
54.6

State and local income taxes, net of Federal income tax effect
6.4

 
2.5

 
(0.6
)
Deferred tax asset valuation allowance
(7.6
)
 
(595.2
)
 
(25.0
)
Income attributable to domestic production activities
(8.8
)
 
(3.8
)
 
(2.8
)
Impairment of equity method investment
4.0

 

 

Change in estimates related to prior years and prior years amended tax return filings
(1.4
)
 
3.3

 
(1.8
)
Federal and state tax credits
(7.6
)
 
(14.7
)
 
(0.3
)
Taxes related to foreign income, net of credits
5.2

 
2.3

 
6.6

Taxes related to unremitted earnings
(5.5
)
 
(5.3
)
 
(3.4
)
Tax reserve reassessment
(0.3
)
 
(12.8
)
 
3.7

Deferred tax reassessment
3.5

 
(1.6
)
 
(0.6
)
Other
4.4

 
4.3

 
1.0

Actual income tax provision (benefit)
$
93.0

 
$
(547.9
)
 
$
31.4

 
 
 
 
 
 
Effective tax rate
32.3
%
 
NM

 
20.1
%


NM = Not meaningful

Income tax provision (benefit) allocated to continuing and discontinued operations
Income tax provision (benefit) allocated to continuing operations and discontinued operations for the years ended December 31 was as follows:
(in millions)
2014
 
2013
 
2012
Continuing operations
$
93.0

 
$
(547.9
)
 
$
31.4

Discontinued operations
11.0

 
(0.1
)
 
2.9

Total tax provision (benefit)
$
104.0

 
$
(548.0
)
 
$
34.3