Tecumseh Products 2012 Annual Report Download - page 57

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Significant components of our deferred tax assets and liabilities as of December 31 were as follows:
(in millions) 2012 2011
Deferred tax assets:
Other postretirement liabilities............................................................................. $ 5.6 $ 26.6
Product warranty and self-insured risks ............................................................... 2.7 2.8
Tax carry forwards................................................................................................ 305.2 393.6
Other accruals and miscellaneous ........................................................................ 26.9 14.1
Subtotal................................................................................................................. 340.4 437.1
Valuation allowance............................................................................................. (307.3)(395.8)
Total deferred tax assets....................................................................................... $ 33.1 $ 41.3
Deferred tax liabilities:
Property, plant & equipment ................................................................................ $ 14.0 $ 21.0
Pension ................................................................................................................. 13.9 15.5
Unrealized gains on securities.............................................................................. 1.6 3.4
Other..................................................................................................................... 3.5 1.3
Total deferred tax liabilities.................................................................................. 33.0 41.2
Net deferred tax assets.......................................................................................... $ 0.1 $ 0.1
Deferred tax detail included in the consolidated balance sheet at December 31, are as follows:
(in millions) 2012 2011
Deferred tax assets....................................................................................................... $ 0.3 $ 0.1
Deferred tax liabilities ................................................................................................. 0.2 —
Total $ 0.1 $ 0.1
At December 31, 2012, we had the following tax carry forwards:
(in millions) Amounts Expiration
U.S. Federal Net Operating Loss.............................................................................. $ 183.8 2028 to 2032
U.S. State Net Operating Loss.................................................................................. 14.8 2016 to 2031
Foreign Net Operating Losses .................................................................................. 60.4 Unlimited
U.S. Tax Credits........................................................................................................ 45.9 2013 to 2030
U.S. Alternative Minimum Tax Credit...................................................................... 0.3 Unlimited
Total operating loss and tax credit carry forwards.................................................... $ 305.2
Income taxes are allocated between continuing operations, discontinued operations and other comprehensive income because
all items, including discontinued operations, should be considered for purposes of determining the amount of tax benefit that
results from a loss from continuing operations and that could be allocated to continuing operations. We apply this concept by
tax jurisdiction, and in periods in which there is a pre-tax loss from continuing operations and pre-tax income in another
category, such as discontinued operations or other comprehensive income, the tax benefit allocated to continuing operations is
determined by taking into account the pre-tax income of other categories.
The receipt of $54.5 million in gross proceeds from the reversion of the hourly retirement plan in 2010 generated a tax gain that
was fully offset for federal tax purposes by our NOL carry forwards.
Deferred income tax assets are evaluated quarterly to determine if valuation allowances are required or should be adjusted. All
available evidence, both positive and negative using a more likely than not standard, is considered to determine if valuation
allowances should be established against deferred tax assets. This assessment considers, among other matters, the nature,
frequency and severity of recent losses, forecasts of future profitability, the duration of statutory carry forward periods,
previous experience with tax attributes expiring unused and tax planning alternatives. In making such judgments, significant
weight is given to evidence that can be objectively verified. A significant piece of objective negative evidence evaluated was
the cumulative loss incurred over the three-year period ended December 31, 2012. This objective negative evidence limits the
ability to consider other subjective evidence such as our projections for future growth.