Mercury Insurance 2013 Annual Report Download - page 86
Download and view the complete annual report
Please find page 86 of the 2013 Mercury Insurance annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.-
1 -
2
-
3
-
4
-
5
-
6
-
7
-
8
-
9
-
10
-
11
-
12
-
13
-
14
-
15
-
16
-
17
-
18
-
19
-
20
-
21
-
22
-
23
-
24
-
25
-
26
-
27
-
28
-
29
-
30
-
31
-
32
-
33
-
34
-
35
-
36
-
37
-
38
-
39
-
40
-
41
-
42
-
43
-
44
-
45
-
46
-
47
-
48
-
49
-
50
-
51
-
52
-
53
-
54
-
55
-
56
-
57
-
58
-
59
-
60
-
61
-
62
-
63
-
64
-
65
-
66
-
67
-
68
-
69
-
70
-
71
-
72
-
73
-
74
-
75
-
76 -
77 -
78 -
79 -
80 -
81 -
82 -
83 -
84 -
85 -
86 -
87 -
88 -
89 -
90 -
91 -
92 -
93 -
94 -
95 -
96 -
97
-
98
-
99
-
100
-
101
-
102
-
103
-
104
-
105
-
106
-
107
-
108
-
109
-
110
-
111
 |
 |
71
Year Ending December 31, Amortization Expense
(Amounts in thousands)
2014 $ 5,980
2015 5,980
2016 5,980
2017 5,253
2018 5,239
Thereafter 13,171
Total $ 41,603
9. Income Taxes
Income tax provision
The Company and its subsidiaries file a consolidated federal income tax return. The provision for income tax expense
consists of the following components:
Year Ended December 31,
2013 2012 2011
(Amounts in thousands)
Federal
Current $ 30,266 $ 9,340 $ 31,390
Deferred (14,970) 6,238 20,518
$ 15,296 $ 15,578 $ 51,908
State
Current $ 5,234 $ 2,079 $ 2,934
Deferred (577) 742 (907)
$ 4,657 $ 2,821 $ 2,027
Total
Current $ 35,500 $ 11,419 $ 34,324
Deferred (15,547) 6,980 19,611
Total $ 19,953 $ 18,399 $ 53,935
The income tax provision reflected in the consolidated statements of operations is reconciled to the federal income tax on
income before income taxes based on a statutory rate of 35% as shown in the table below:
Year Ended December 31,
2013 2012 2011
(Amounts in thousands)
Computed tax expense at 35% $ 46,234 $ 47,359 $ 85,785
Tax-exempt interest income (26,381)(27,789)(31,414)
Dividends received deduction (2,239)(1,482)(1,704)
State tax expense 4,944 1,918 1,299
Other, net (2,605)(1,607)(31)
Income tax expense $ 19,953 $ 18,399 $ 53,935
Deferred Income Taxes
Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between
the financial reporting basis and the respective tax basis of the Company's assets and liabilities, and expected benefits of utilizing
net operating loss, capital loss, and tax-credit carryforwards. The ultimate realization of deferred tax assets is dependent upon
generating sufficient taxable income of the appropriate character within the carryback and carryforward periods available under
the tax law. Management considers the reversal of deferred tax liabilities, projected future taxable income of an appropriate nature,
and tax-planing strategies in making this assessment. The Company believes that through the use of prudent tax planning strategies