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SEC Filings

10-K
INTERPUBLIC GROUP OF COMPANIES, INC. filed this Form 10-K on 02/23/2015
Entire Document
 
Notes to Consolidated Financial Statements – (continued)
(Amounts in Millions, Except Per Share Amounts)

As of December 31, 2014, there are $1,263.1 of loss carryforwards. These loss carryforwards are all non-U.S. tax loss carryforwards, of which $1,053.4 have unlimited carryforward periods and $209.7 have expiration periods from 2015 to 2033. As of December 31, 2014, the Company also had $60.3 in deferred tax assets for state net operating loss carryforwards and tax credit carryforwards, which will expire between 2015 and 2034.
As of December 31, 2014 and 2013, we had $2,214.2 and $1,959.8, respectively, of undistributed earnings attributable to foreign subsidiaries. It is our intention to permanently reinvest undistributed earnings of our foreign subsidiaries. We have not provided deferred U.S. income taxes or foreign withholding taxes on temporary differences resulting from earnings for certain foreign subsidiaries which are permanently reinvested outside the U.S. It is not practicable to determine the amount of unrecognized deferred tax liability associated with these temporary differences.
The table below summarizes the activity related to our unrecognized tax benefits.
 
December 31,
 
2014
 
2013
 
2012
Balance at beginning of period
$
219.2

 
$
194.6

 
$
161.0

Increases as a result of tax positions taken during a prior year
29.0

 
8.3

 
28.2

Decreases as a result of tax positions taken during a prior year
(16.3
)
 
(1.9
)
 
(6.8
)
Settlements with taxing authorities
(1.1
)
 
(34.9
)
 
(0.7
)
Lapse of statutes of limitation
(4.1
)
 
(10.6
)
 
(1.1
)
Increases as a result of tax positions taken during the current year
11.3

 
63.7

 
14.0

Balance at end of period
$
238.0

 
$
219.2

 
$
194.6


Included in the total amount of unrecognized tax benefits of $238.0 as of December 31, 2014, is $213.5 of tax benefits that, if recognized, would impact the effective income tax rate. The total amount of accrued interest and penalties as of December 31, 2014 and 2013 is $15.3 and $11.9, respectively, of which a detriment of $5.4 and $2.8 is included in our 2014 and 2013 Consolidated Statements of Operations, respectively. In accordance with our accounting policy, interest and penalties accrued on unrecognized tax benefits are classified as income taxes in our Consolidated Statements of Operations.
In 2013, we settled the 2002-2006 NYS audit cycle. The settlement resulted in a minor cash payment and our effective income tax rate was positively impacted by the recognition of previously unrecognized tax benefits.
We have various tax years under examination by tax authorities in the U.S., in various countries, and in various states, such as New York, in which we have significant business operations. It is not yet known whether these examinations will, in the aggregate, result in our paying additional taxes. We believe our tax reserves are adequate in relation to the potential for additional assessments in each of the jurisdictions in which we are subject to taxation. We regularly assess the likelihood of additional tax assessments in those jurisdictions and, if necessary, adjust our reserves as additional information or events require.
With respect to all tax years open to examination by U.S. federal, various state and local, and non-U.S. tax authorities, we currently anticipate that total unrecognized tax benefits will decrease by an amount between $25.0 and $35.0 in the next twelve months, a portion of which will affect our effective income tax rate, primarily as a result of the settlement of tax examinations and the lapsing of statutes of limitations. This net decrease is related to various items of income and expense, primarily transfer pricing adjustments.
We are effectively settled with respect to U.S. income tax audits for years prior to 2009. With limited exceptions, we are no longer subject to state and local income tax audits for years prior to 2004, or non-U.S. income tax audits for years prior to 2006.

Note 8: Restructuring and Other Reorganization-Related Charges (Reversals), net
The components of restructuring and other reorganization-related charges (reversals), net are listed below.
 
Years ended December 31,
 
2014
 
2013
 
2012
Severance and termination costs
$
0.1

 
$
55.9

 
$
0.0

Lease termination costs
0.1

 
4.2

 
(1.1
)
Other exit costs
0.0

 
0.5

 
(0.1
)
Total restructuring and other reorganization-related charges (reversals), net
$
0.2

 
$
60.6

 
$
(1.2
)

60