Income from continuing operations, before income taxes is summarized below based on the geographic location of the operation to which such earnings are attributable. Certain foreign operations are branches of PolyOne and are, therefore, subject to United States as well as foreign income tax regulations. As a result, pre-tax income by location and the components of income tax expense by taxing jurisdiction are not directly related.

Income from continuing operations, before income taxes consists of the following:



(In millions)	2014		2013		2012
Domestic	$	54.1	$	105.2	$	46.2
Foreign	34.3		45.8		37.1
Income from continuing operations, before income taxes	$	88.4	$	151.0	$	83.3

A summary of income tax expense from continuing operations is as follows:



(In millions)	2014			2013			2012
Current:
Federal	$	(33.5	)	$	(17.4	)	$	(1.7	)
State	(3.1		)	(2.8		)	(0.9		)
Foreign	(19.8		)	(23.3		)	(14.7		)
Total current	$	(56.4	)	$	(43.5	)	$	(17.3	)
Deferred:
Federal	$	36.7		$	(12.9	)	$	(15.8	)
State	4.6			(1.8		)	0.1
Foreign	3.9			0.1			2.9
Total deferred	$	45.2		$	(14.6	)	$	(12.8	)
Total income tax expense	$	(11.2	)	$	(58.1	)	$	(30.1	)

Refer to Note 5, Discontinued Operations, for income tax expense allocated to discontinued operations.

Reconciliation of income taxes from continuing operations at the U.S. statutory rate of 35% to the consolidated effective tax rate is as follows:



(In millions)	2014			2013			2012
Income tax expense at 35% of income from continuing operations, before income taxes	$	(30.9	)	$	(52.8	)	$	(29.2	)
State tax, net of federal benefit	1.1			(3.9		)	(1.3		)
Differences in rates of foreign operations	5.4			(1.2		)	3.3
Changes in valuation allowances	(6.9		)	(3.1		)	(0.9		)
U.S. research and development credit	1.0			2.1			—
Tax benefits on certain foreign investments	13.4			—			—
Uncertain tax positions	(0.9		)	0.5			0.1
U.S. tax settlements	2.8			—			—
Domestic manufacturing deduction	2.2			1.5			—
Other, net	1.6			(1.2		)	(2.1		)
Income tax expense	$	(11.2	)	$	(58.1	)	$	(30.1	)

Components of our deferred tax liabilities and assets as of December 31, 2014 and 2013 were as follows:



(In millions)	2014			2013
Deferred tax liabilities:
Tax over book depreciation	$	(76.9	)	$	(87.1	)
Intangibles	(135.2		)	(132.4		)
Other, net	(9.1		)	(13.6		)
Total deferred tax liabilities	$	(221.2	)	$	(233.1	)
Deferred tax assets:
Pension and other post-retirement benefits	$	39.1		$	20.6
Employment costs	47.2			36.8
Environmental	46.5			49.3
Net operating loss carryforwards	42.0			38.0
Other, net	30.6			32.6
Total deferred tax assets	$	205.4		$	177.3
Valuation allowances	(23.6		)	(29.3		)
Net deferred tax liabilities	$	(39.4	)	$	(85.1	)

As of December 31, 2014, we have combined state net operating loss carryforwards of $223.4 million that expire at various dates from 2015 through 2033. Various foreign subsidiaries have net operating loss carryforwards totaling $108.5 million that expire at various dates from 2015 through 2033. We have provided valuation allowances of $21.5 million against certain foreign and state loss carryforwards.

No provision has been made for income taxes on undistributed earnings of consolidated non-U.S. subsidiaries of $281.7 million at December 31, 2014, because our intention is to reinvest indefinitely undistributed earnings of our foreign subsidiaries. It is not practicable to estimate the additional income taxes and applicable foreign withholding taxes that would be payable on the remittance of such undistributed earnings.

We made worldwide income tax payments of $70.0 million and received refunds of $4.2 million in 2014. We made worldwide income tax payments of $120.3 million and $30.8 million in 2013 and 2012, respectively, and received refunds of $2.9 million and $13.0 million in 2013 and 2012, respectively. The increase in income tax payments made in 2013 is primarily related to higher 2013 earnings and the gain recognized related to the divestiture of the Resin Business.

The Company records provisions for uncertain tax positions in accordance with ASC Topic 740, Income Taxes. A reconciliation of unrecognized tax benefits is as follows:



	Unrecognized Tax Benefits
(In millions)	2014			2013			2012
Balance as of January 1	$	15.2		$	14.5		$	15.1
Additions based on tax positions related to the current year	4.8			—			0.2
Additions for tax positions of prior years	0.1			—			—
Reductions for tax positions of prior years	(2.3		)	(0.9		)	(0.4		)
Balances related to acquired businesses	14.2			1.1			—
Settlements and other	(3.4		)	0.5			(0.4		)
Balance as of December 31	$	28.6		$	15.2		$	14.5

We recognize interest and penalties related to uncertain tax positions in the provision for income taxes. As of December 31, 2014 and 2013, we had $8.6 million and $3.0 million accrued for interest and penalties, respectively. The increase during 2014 is primarily associated with purchase accounting adjustments.

Although the timing and outcome of tax settlements are uncertain, it is reasonably possible that during the next 12 months a reduction in unrecognized tax benefits may occur up to $19.2 million based on the outcome of tax examinations and as a result of the expiration of various statues of limitations.

If all unrecognized tax benefits were recognized, the net impact on the provision for income tax expense would be $25.0 million.

The Company is currently being audited by multiple state and foreign taxing jurisdictions. We are no longer subject to U.S. federal income tax examinations for periods preceding 2010 and, with limited exceptions, for periods preceding 2007 for state and 2002 for foreign tax examinations.