Napa Auto Parts 2014 Annual Report Download - page 64

Genuine Parts Company and Subsidiaries
Notes to Consolidated Financial Statements — (Continued)
December 31, 2014
The reasons for the difference between total tax expense and the amount computed by applying the statutory
Federal income tax rate to income before income taxes are as follows:
2014 2013 2012
(In Thousands)
Statutory rate applied to income ......................... $391,209 $365,506 $356,626
Plus state income taxes, net of Federal tax benefit ........... 32,646 28,823 30,227
Earnings in jurisdictions taxed at rates different from the
statutory US tax rate ................................. (3,453) (37,873) (17,419)
Foreign tax credit ..................................... (20,170) ——
Capital loss expiration ................................. —16,803 —
Reversal of capital loss valuation allowance ................ —(16,803) —
Other ............................................... 6,221 2,889 1,457
$406,453 $359,345 $370,891
The Company or one of its subsidiaries files income tax returns in the U.S. federal jurisdiction, various
states, and foreign jurisdictions. With few exceptions, the Company is no longer subject to federal, state and local
tax examinations by tax authorities for years before 2009 or subject to non-United States income tax examina-
tions for years ended prior to 2005. The Company is currently under audit in the United States and Canada. Some
audits may conclude in the next twelve months and the unrecognized tax benefits recorded in relation to the
audits may differ from actual settlement amounts. It is not possible to estimate the effect, if any, of the amount of
such change during the next twelve months to previously recorded uncertain tax positions in connection with the
audits. However, the Company does not anticipate total unrecognized tax benefits will significantly change dur-
ing the year due to the settlement of audits and the expiration of statutes of limitations.
A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
2014 2013 2012
(In Thousands)
Balance at beginning of year ............................... $ 47,190 $45,455 $46,845
Additions based on tax positions related to the current year ...... 3,303 3,238 5,702
Additions for tax positions of prior years ..................... 6,415 3,759 2,172
Reductions for tax positions for prior years ................... (851) (1,472) (5,025)
Reduction for lapse in statute of limitations ................... (481) (1,714) (2,658)
Settlements ............................................ (37,995) (2,076) (1,581)
Balance at end of year .................................... $ 17,581 $47,190 $45,455
The amount of gross tax effected unrecognized tax benefits, including interest and penalties, as of
December 31, 2014 and 2013 was approximately $19,497,000 and $59,530,000, respectively, of which approx-
imately $11,106,000 and $18,287,000, respectively, if recognized, would affect the effective tax rate. During
2014, the Company settled certain transfer pricing methodologies with tax authorities, and on a consolidated
basis, the difference, in related payments and refunds and the amount reflected in the tax reserves, was not
material.
During the years ended December 31, 2014, 2013, and 2012, the Company paid interest and penalties of
approximately $14,000,000, $405,000, and $493,000, respectively. The Company had approximately $1,916,000
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