Assurant 2014 Annual Report Download - page 121

ASSURANT, INC. – 2014 Form 10-K F-33
8 Income Taxes
A reconciliation of the beginning and ending amount of unrecognized tax benefi ts for the years ended December 31, 2014,
2013 and 2012 is as follows:
Years Ended December 31,
2014 2013 2012
Balance at beginning of year $ (10,322) $ (11,515) $ (17,524)
Additions based on tax positions related to the current year (2,940) (309) (499)
Reductions based on tax positions related to the current year 581 995 3,124
Additions for tax positions of prior years (1,037) (1,090) (20,830)
Reductions for tax positions of prior years 2,495 959 8,365
Lapses — — 374
Settlements 4,961 638 15,475
BALANCE AT END OF YEAR $ (6,262) $ (10,322) $ (11,515)
The total unrecognized tax benefi t of $7,631, $12,510,
and $12,442 for 2014, 2013, and 2012, respectively, which
includes interest, would impact the Company’s consolidated
effective tax rate if recognized. The liability for unrecognized
tax benefi ts is included in tax payable on the consolidated
balance sheets.
The Company’s continuing practice is to recognize interest
expense related to income tax matters in income tax expense.
During the years ended December 31, 2014, 2013 and 2012,
the Company recognized approximately $246, $375 and
$1,200, respectively, of interest expense related to income
tax matters. The Company had $1,730 and $4,500 of interest
accrued as of December 31, 2014 and 2013, respectively. No
penalties have been accrued.
The Company and its subsidiaries fi le income tax returns
in the U.S. and various state and foreign jurisdictions. The
Company has substantially concluded all U.S. federal income
tax matters for years through 2011. Substantially all non-
U.S. income tax matters have been concluded for the years
through 2008, and all state and local income tax matters
have been concluded for the years through 2009.
The tax effects of temporary differences that result in signifi cant deferred tax assets and deferred tax liabilities are as follows:
December 31,
2014 2013
Deferred Tax Assets
Policyholder and separate account reserves $ 498,231 $ 611,774
Accrued liabilities 23,183 17,791
Investments, net 168,061 119,410
Net operating loss carryforwards 50,103 65,507
Deferred gain on disposal of businesses 35,347 34,833
Compensation related 24,029 21,713
Employee and post-retirement benefi ts 111,716 81,725
Unearned fee income 55,765 61,121
Other 40,584 44,585
Total deferred tax asset 1,007,019 1,058,459
Less valuation allowance (18,164) (16,474)
Deferred tax assets, net of valuation allowance 988,855 1,041,985
Deferred Tax Liabilities
Deferred acquisition costs (867,212) (894,921)
Net unrealized appreciation on securities (435,375) (276,212)
Total deferred tax liability (1,302,587) (1,171,133)
NET DEFERRED INCOME TAX LIABILITY $ (313,732) $ (129,148)
The net deferred tax liability of $313,732 as of December 31,
2014 is comprised of $341,290 deferred tax liabilities and
$27,558 deferred tax assets, by jurisdiction. Similarly, the
net deferred tax liability of $129,148 as of December 31,
2013 is comprised of $155,858 deferred tax liabilities and
$26,710 deferred tax assets, by jurisdiction.
The Company’s valuation allowance against deferred tax assets
increased $1,690 to $18,164 at December 31, 2014 from $16,474
at December 31, 2013. A cumulative valuation allowance
of $18,164 has been recorded because it is management’s
assessment that it is more likely than not that only $988,855 of
deferred tax assets will be realized. The valuation allowance
relates to the deferred tax assets attributable to certain
international subsidiaries.