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INCOME TAXES | 9 Months Ended
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Sep. 28, 2013
INCOME TAXES |
INCOME TAXES | (14) INCOME TAXES Uncertain Tax Positions As of September 28, 2013, we had gross unrecognized tax benefits of $72.9 (net unrecognized tax benefits of $35.8). Of these net unrecognized tax benefits, $34.9, if recognized, would impact our effective tax rate from continuing operations. We classify interest and penalties related to unrecognized tax benefits as a component of our income tax provision. As of September 28, 2013, gross accrued interest excluded from the amounts above totaled $6.7 (net accrued interest of $5.0). There were no significant penalties recorded during the three and nine months ended September 28, 2013 or September 29, 2012. Based on the outcome of certain examinations or as a result of the expiration of statute of limitations for certain jurisdictions, we believe that within the next 12 months it is reasonably possible that our previously unrecognized tax benefits could decrease by approximately $10.0 to $15.0. Other Tax Matters For the three months ended September 28, 2013, we recorded an income tax provision of $12.3 on $69.3 of pre-tax income from continuing operations, resulting in an effective rate of 17.7%. This compares to an income tax provision for the three months ended September 29, 2012 of $9.6 on $58.1 of pre-tax income from continuing operations, resulting in an effective rate of 16.5%. The effective tax rate for the third quarter of 2013 was impacted favorably by income tax benefits of (i) $6.4 associated with net reductions to valuation allowances recorded against certain foreign deferred income tax assets and (ii) $2.3 recorded in connection with various audit settlements and statute expirations during the period. The effective tax rate for the third quarter of 2012 was impacted favorably by (i) tax benefits of $4.2 recorded in connection with various audit settlements and statute expirations during the period and (ii) a benefit of $2.8 associated with a reduction in deferred tax liabilities resulting from the newly enacted corporate tax rates in the United Kingdom. For the nine months ended September 28, 2013, we recorded an income tax provision of $17.2 on $115.8 of pre-tax income from continuing operations, resulting in an effective tax rate of 14.9%. This compares to an income tax provision for the nine months ended September 29, 2012 of $27.0 on $110.2 of pre-tax income from continuing operations, resulting in an effective tax rate of 24.5%. The effective tax rate for the first nine months of 2013 was impacted favorably by the $8.7 of tax benefits noted above that were realized during the third quarter of 2013, as well as tax benefits realized during the first half of 2013 of $4.1 related to the Research and Experimentation Credit generated in 2012, $2.0 related to various foreign tax credits, and $1.8 for statute expirations. The effective tax rate for the nine months ended September 29, 2012 was impacted favorably by the tax benefits of $7.0 noted above for the third quarter of 2012. The impact of these benefits was offset by an incremental tax charge of $6.1 associated with the deconsolidation of our dry cooling business in China, as the goodwill allocated to the transaction was not deductible for tax purposes. We perform reviews of our income tax positions on a continual basis and accrue for potential uncertain positions when we determine that an uncertain position meets the criteria of the Income Taxes topic of the Codification. Accruals for these uncertain tax positions are recorded in “Income taxes payable” and “Deferred and other income taxes” in the accompanying condensed consolidated balance sheets based on the expectation as to the timing of when the matters will be resolved. As events change and resolutions occur, these accruals are adjusted, such as in the case of audit settlements with taxing authorities. The IRS initiated an audit of our 2010 and 2011 federal income tax returns during 2012. We expect that the audit will be concluded during the next 12 months. With regard to this audit, we believe any contingencies have been adequately provided for. State income tax returns generally are subject to examination for a period of three to five years after filing the respective tax returns. The impact on such tax returns of any federal changes remains subject to examination by various states for a period of up to one year after formal notification to the states. We have various state income tax returns in the process of examination, administrative appeal or litigation. We believe any uncertain tax positions related to these examinations have been adequately provided for. We have various foreign income tax returns under examination. The most significant of these examinations is in Denmark for the 2006 to 2010 tax years. We believe that any uncertain tax positions related to these examinations have been adequately provided for. An unfavorable resolution of one or more tax matters could have a material adverse effect on our financial position, results of operations or cash flows in the quarter and year in which an adjustment is recorded or the tax is due or paid. As audits and examinations are still in process or we have not yet reached the final stages of the appeals process, the timing of the ultimate resolution and any payments that may be required for open matters cannot be determined at this time. Upon the conclusion of our disposition activities discussed in Note 3, we may recognize an additional income tax provision or benefit, generally, as part of discontinued operations.

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- 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=6881521&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 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 109 -Paragraph 136, 172 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 109 -Paragraph 43, 44, 45, 46, 47, 48, 49 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. + Details
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