E-Z-GO 2014 Annual Report Download - page 74

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benefit payments primarily will be paid out of qualified pension trusts, we will pay postretirement benefits other than pensions out
of our general corporate assets. Benefit payments that we expect to pay are as follows:
(In millions)
2015
2016
2017
2018
2019
2020-2024
Pension benefits
$ 401
$ 398
$ 405
$ 411
$ 420
$ 2,254
Post-retirement benefits other than pensions
46
44
42
39
37
150
Note 12. Income Taxes
We conduct business globally and, as a result, file numerous consolidated and separate income tax returns within and outside the
U.S. For all of our U.S. subsidiaries, we file a consolidated federal income tax return. Income from continuing operations before
income taxes is as follows:
(In millions)
2014
2013
2012
U.S.
$ 553
$ 454
$ 644
Non-U.S.
300
220
197
Income from continuing operations before income taxes
$ 853
$ 674
$ 841
Income tax expense for continuing operations is summarized as follows:
(In millions)
2014
2013
2012
Current:
Federal
$ 195
$ 23
$ 40
State
18
10
9
Non-U.S.
54
56
29
267
89
78
Deferred:
Federal
(12)
91
169
State
(4)
13
23
Non-U.S.
(3)
(17)
(10)
(19)
87
182
Income tax expense
$ 248
$ 176
$ 260
The current federal and state provisions for 2012 included $25 million of tax related to the sale of certain leveraged leases in the
Finance segment for which we had previously recorded significant deferred tax liabilities.
The following table reconciles the federal statutory income tax rate to our effective income tax rate for continuing operations:
2014
2013
2012
U.S. Federal statutory income tax rate
35.0%
35.0%
35.0%
Increase (decrease) in taxes resulting from:
State income taxes
1.0
2.4
2.2
Non-U.S. tax rate differential and foreign tax credits
(5.8)
(7.2)
(5.4)
Research credit
(1.5)
(3.8)
—
Other, net
0.4
(0.3)
(0.9)
Effective income tax rate
29.1%
26.1%
30.9%
The amount of income taxes we pay is subject to ongoing audits by U.S. federal, state and non-U.S. tax authorities, which may
result in proposed assessments. Our estimate for the potential outcome for any uncertain tax issue is highly judgmental. We
assess our income tax positions and record tax benefits for all years subject to examination based upon management’s evaluation
of the facts, circumstances and information available at the reporting date. For those tax positions for which it is more likely than
not that a tax benefit will be sustained, we record the largest amount of tax benefit with a greater than 50% likelihood of being
realized upon settlement with a taxing authority that has full knowledge of all relevant information. Interest and penalties are
accrued, where applicable. If we do not believe that it is not more likely than not that a tax benefit will be sustained, no tax benefit
is recognized.
68 Textron Inc. Annual Report • 2014