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INCOME TAXES | 9 Months Ended
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Sep. 27, 2014
INCOME TAXES |
INCOME TAXES | (14) INCOME TAXES Uncertain Tax Benefits As of September 27, 2014, we had gross unrecognized tax benefits of $82.7 (net unrecognized tax benefits of $44.0), of which $43.4, 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 27, 2014, gross accrued interest totaled $9.3 (net accrued interest of $7.0) and penalties totaled $7.1. 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 $20.0 to $30.0. The previously unrecognized tax benefits relate to a variety of tax issues, including tax matters relating to deemed income inclusions, transfer pricing, and various state matters. Other Tax Matters For the three months ended September 27, 2014, we recorded an income tax provision of $26.0 on $90.8 of pre-tax income from continuing operations, resulting in an effective rate of 28.6%. This compares to an income tax provision for the three months ended September 28, 2013 of $16.6 on $79.7 of pre-tax income from continuing operations, resulting in an effective rate of 20.8%. The effective tax rate for the third quarter of 2014 was impacted unfavorably by income tax charges of (i) $4.0 related to incremental state income taxes provided in connection with the gain recorded during the first quarter on the sale of our interest in EGS and (ii) $1.4 related to valuation allowances recorded against certain foreign deferred income tax assets, partially offset by $0.4 of tax benefits recorded in connection with various audit settlements and statute expirations. 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. For the nine months ended September 27, 2014, we recorded an income tax provision of $202.6 on $617.3 of pre-tax income from continuing operations, resulting in an effective tax rate of 32.8%. This compares to an income tax provision for the nine months ended September 28, 2013 of $30.2 on $147.1 of pre-tax income from continuing operations, resulting in an effective tax rate of 20.5%. The most significant items impacting the effective tax rate for the first nine months of 2014 were the U.S. income taxes provided in connection with the $491.2 gain recorded during the first quarter on the sale of our interest in EGS, and the favorable impacts of (i) $10.3 of tax benefits related to various audit settlements and statute expirations and (ii) $6.7 of tax benefits related to a loss on an investment in a foreign subsidiary, partially offset by tax charges of $12.2 resulting from net increases in valuation allowances recorded against certain foreign deferred income tax assets. 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. We perform reviews of our income tax positions on a continuous 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. Our federal income tax returns for the 2008 through 2013 tax years are subject to examination. The IRS is currently auditing the 2008 to 2012 tax return years. With regard to all open tax years, we believe any contingencies are 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 are in Denmark for the 2006, 2007, 2009, and 2010 tax years and South Africa for the 2005 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 of the above matters could have a material adverse effect on our 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 the above matters cannot be determined at this time.

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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=26873400&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 + Details
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