Brunswick Corporation Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Income Taxes (Tables)

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2014

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

- Definition

Tabular disclosure of tax positions taken in the tax returns filed or to be filed for which it is more likely than not that the tax position will not be sustained upon examination by taxing authorities (i.e., uncertain tax positions) and other types of income tax contingencies, including: (1) the policy on classification of interest and penalties; (2) a tabular reconciliation of the total amounts of unrecognized tax benefits at the beginning and end of the period; the total amount(s) of: (3) unrecognized tax benefits that, if recognized, would affect the effective tax rate, and (4) interest and penalties recognized in each of the income statement and balance sheet; (5) for positions for which it is reasonably possible that the total amounts unrecognized will significantly change within 12 months of the reporting date the: (i) nature of the uncertainty, (ii) nature of the event that could occur that would cause the change, and (iii) an estimate of the range of the reasonably possible change or a statement that an estimate of the range cannot be made; and (6) a description of tax years that remain subject to examination by major tax jurisdictions.

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