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Income Taxes | 12 Months Ended
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Dec. 31, 2014
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes Income from continuing operations before taxes consisted of the following:
| Years Ended December 31,
| 2014 |  | 2013 |  | 2012
U.S. | $ | 356,017 |  |  | $ | 288,660 |  |  | $ | 387,987 |
International | 75,179 |  |  | 95,294 |  |  | 123,783 |
Total | $ | 431,196 |  |  | $ | 383,954 |  |  | $ | 511,770 |
The provision for income taxes from continuing operations consisted of the following:
| Years Ended December 31,
| 2014 |  | 2013 |  | 2012
U.S. Federal: |  |  |  |  |
Current | $ | 71,683 |  |  | $ | 78,315 |  |  | $ | 151,984 |
Deferred | 6,941 |  |  | (19,754 | ) |  | 16,136 |
| 78,624 |  |  | 58,561 |  |  | 168,120 |
U.S. State and Local: |  |  |  |  |
Current | 7,186 |  |  | 5,359 |  |  | (2,604 | )
Deferred | (9,307 | ) |  | (8,026 | ) |  | (26,273 | )
| (2,121 | ) |  | (2,667 | ) |  | (28,877 | )
International: |  |  |  |  |
Current | 32,492 |  |  | 28,063 |  |  | 57,906 |
Deferred | 3,820 |  |  | (5,990 | ) |  | (82,862 | )
| 36,312 |  |  | 22,073 |  |  | (24,956 | )
Total current | 111,361 |  |  | 111,737 |  |  | 207,286 |
Total deferred | 1,454 |  |  | (33,770 | ) |  | (92,999 | )
Total provision for income taxes | $ | 112,815 |  |  | $ | 77,967 |  |  | $ | 114,287 |
Effective tax rate | 26.2 | % |  | 20.3 | % |  | 22.3 | %
The effective tax rate for 2014 includes tax benefits of $22 million from the resolution of tax examinations and $5 million from the retroactive effect of 2014 U.S. tax legislation. The effective tax rate for 2013 includes tax benefits of $13 million from an affiliate reorganization, $17 million from tax planning initiatives and $5 million from the adjustment of non-U.S. tax accounts from prior periods and the retroactive effect of 2013 U.S. tax legislation. The effective tax rate for 2012 includes tax benefits of $32 million from the sale of non-U.S. leveraged lease assets and $47 million from the resolution of U.S. tax examinations and tax accruals of $43 million for the repatriation of additional non-U.S. earnings that arose as a result of one-time events including the sale of leveraged lease assets and Canadian tax law changes. The items accounting for the difference between income taxes computed at the federal statutory rate and our provision for income taxes consist of the following:
| Years Ended December 31,
| 2014 |  | 2013 |  | 2012
Federal statutory provision | $ | 150,920 |  |  | $ | 134,389 |  |  | $ | 179,119 |
State and local income taxes | (1,379 | ) |  | (1,733 | ) |  | (2,071 | )
Other impact of foreign operations | (12,668 | ) |  | (28,238 | ) |  | 23,025 |
Tax exempt income/reimbursement | (1,327 | ) |  | (1,672 | ) |  | (1,992 | )
Federal income tax credits/incentives | (17,905 | ) |  | (10,282 | ) |  | (8,918 | )
Unrealized stock compensation benefits | 2,318 |  |  | 2,292 |  |  | 3,456 |
Resolution of U.S. tax examinations | (5,856 | ) |  | (3,853 | ) |  | (47,380 | )
Impact of non-U.S. leveraged lease asset sales | — |  |  | — |  |  | (30,367 | )
Outside basis differences | — |  |  | (13,214 | ) |  | — |
Other, net | (1,288 | ) |  | 278 |  |  | (585 | )
Provision for income taxes | $ | 112,815 |  |  | $ | 77,967 |  |  | $ | 114,287 |
Other impacts of foreign operations include income of foreign affiliates taxed at rates other than the 35% U.S. statutory rate, the accrual or release of tax uncertainty amounts related to foreign operations, the tax impacts of foreign earnings repatriation and the U.S. foreign tax credit impacts of other foreign income taxed in the U.S. Deferred tax liabilities and assets at December 31, 2014 and 2013 consisted of the following:
| December 31,
| 2014 |  | 2013
Deferred tax liabilities: |  |  |
Depreciation | $ | (60,282 | ) |  | $ | (33,057 | )
Deferred profit (for tax purposes) on sale to finance subsidiary | (114,633 | ) |  | (142,114 | )
Lease revenue and related depreciation | (205,683 | ) |  | (249,998 | )
Amortizable intangibles | (74,034 | ) |  | (79,852 | )
Other | (64,900 | ) |  | (73,077 | )
Deferred tax liabilities | (519,532 | ) |  | (578,098 | )
Deferred tax assets: |  |  |
Nonpension postretirement benefits | 82,181 |  |  | 99,628 |
Pension | 141,492 |  |  | 43,301 |
Inventory and equipment capitalization | 18,502 |  |  | 22,824 |
Restructuring charges | 35,432 |  |  | 26,837 |
Long-term incentives | 25,718 |  |  | 28,880 |
Net operating loss | 102,686 |  |  | 143,839 |
Tax credit carry forwards | 47,493 |  |  | 48,617 |
Tax uncertainties gross-up | 22,851 |  |  | 35,298 |
Other | 125,512 |  |  | 147,709 |
Valuation allowance | (116,935 | ) |  | (122,780 | )
Deferred tax assets | 484,932 |  |  | 474,153 |
Total deferred taxes, net | $ | (34,600 | ) |  | $ | (103,945 | )
The above amounts are classified as current or long-term in the Consolidated Balance Sheets in accordance with the asset or liability to which they relate or based on the expected timing of the reversal. A valuation allowance is recognized to reduce the total deferred tax assets to an amount that will more-likely-than-not be realized. The valuation allowance relates primarily to certain foreign, state and local net operating loss and tax credit carryforwards that are more likely than not to expire unutilized. We have net operating loss carryforwards of $240 million as of December 31, 2014, of which, $210 million can be carried forward indefinitely and the remainder expire over the next 15 years. In addition, we have tax credit carryforwards of $47 million, the majority of which can be carried forward indefinitely. As of December 31, 2014 we have not provided for income taxes on $830 million of cumulative undistributed earnings of subsidiaries outside the U.S. as these earnings will be either indefinitely reinvested or remitted substantially free of additional tax. However, we estimate that withholding taxes on such remittances would be $12 million. Determination of the liability that would be incurred if these earnings were remitted to the U.S. is not practicable as there is a significant amount of uncertainty with respect to determining the amount of foreign tax credits and other indirect tax consequences that may arise from the distribution of these earnings. Uncertain Tax Positions A reconciliation of the amount of unrecognized tax benefits is as follows:
| 2014 |  | 2013 |  | 2012
Balance at beginning of year | $ | 172,594 |  |  | $ | 151,098 |  |  | $ | 202,828 |
Increases from prior period positions | 9,090 |  |  | 15,777 |  |  | 11,811 |
Decreases from prior period positions | (33,692 | ) |  | (6,908 | ) |  | (17,985 | )
Increases from current period positions | 17,704 |  |  | 23,549 |  |  | 28,255 |
Decreases relating to settlements with tax authorities | (22,127 | ) |  | (482 | ) |  | (1,948 | )
Reductions from lapse of applicable statute of limitations | (11,074 | ) |  | (10,440 | ) |  | (71,863 | )
Balance at end of year | $ | 132,495 |  |  | $ | 172,594 |  |  | $ | 151,098 |
The amount of the unrecognized tax benefits at December 31, 2014, 2013 and 2012 that would affect the effective tax rate if recognized was $110 million, $148 million and $127 million, respectively. On a regular basis, we conclude tax return examinations, statutes of limitations expire, and court decisions interpret tax law. We regularly assess tax uncertainties in light of these developments. As a result, it is reasonably possible that the amount of our unrecognized tax benefits will decrease in the next 12 months, and we expect this change could be up to 25% of our unrecognized tax benefits. We recognize interest and penalties related to uncertain tax positions in our provision for income taxes or discontinued operations as appropriate. During the years ended December 31, 2014, 2013 and 2012, we recorded interest and penalties of $2 million, $27 million and $(28) million, respectively. We had $11 million and $37 million accrued for the payment of interest and penalties at December 31, 2014 and 2013, respectively. Other Tax Matters As is the case with other large corporations, our tax returns are examined each year by tax authorities in the U.S., other countries and local jurisdictions in which we have operations. Except for issues arising out of certain partnership investments, the IRS examinations of tax years prior to 2009 are closed to audit. Other than the pending application of legal principles to specific issues arising in earlier years, only post-2009 Canadian tax years are subject to examination. Other significant tax filings subject to examination include various post-2004 U.S. state and local, post-2007 German, and post-2010 French and U.K. tax filings. We have other less significant tax filings currently under examination or subject to examination. We regularly assess the likelihood of tax adjustments in each of the tax jurisdictions in which we have operations and account for the related financial statement implications. We believe we have established tax reserves that are appropriate given the possibility of tax adjustments. However, determining the appropriate level of tax reserves requires judgment regarding the uncertain application of tax law and the possibility of tax adjustments. Future changes in tax reserve requirements could have a material impact, positive or negative, on our results of operations, financial position and cash flows. During 2014, we determined that certain pre-2009 tax deductions associated with software development expenditures had not been deducted on our tax returns, the expenditures could be claimed on our current year return and our deferred tax liability was overstated. We assessed the materiality of this item on previously issued financial statements and concluded that it was not material to any annual or interim period. However, due to the impact of this error on the 2014 annual consolidated financial statements, the accompanying Consolidated Balance Sheet and Consolidated Statements of Stockholders' Equity (Deficit) have been revised for the earliest period presented to increase opening retained earnings by $17 million and decrease our tax liabilities. In August 2012, the United States Court of Appeals for the Third Circuit overturned a prior Tax Court decision and ruled in favor of the IRS and adverse to Historic Boardwalk Hall LLC (HBH), a partnership in which we had made an investment in the year 2000. In January 2014, the Tax Court entered an order to implement rulings of the Third Circuit. In August 2014, we entered into an agreement with our partner in the HBH investment releasing our respective claims against each other and agreeing to divest our investment in the partnership. The impact of this agreement is recorded in other expense in the Consolidated Statements of Income. During the year, we paid $54 million in tax payments representing a portion of the tax and interest due as a result of the Third Circuit decision and received $60 million from our partner under the indemnity agreement. Additional tax payments will be due in 2015, which we have accrued in our financial statements.

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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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