Income Taxes (Tables)

12 Months Ended

Dec. 31, 2011

Income Taxes [Abstract]

Components of earnings before taxes

The components of earnings before taxes consist of the following (in millions):

For the Years Ended December 31,	2011		2010		2009
United States operations	$	485.7	$	382.4	$	489.7
Foreign operations		493.2		477.8		508.5
Total	$	978.9	$	860.2	$	998.2

The provision for income taxes consists of (in millions):

Current:
Federal	$	148.4		$	235.3		$	204.9
State		14.3			19.5			23.3
Foreign		75.9			81.0			72.3
		238.6			335.8			300.5
Deferred:
Federal		(2.6	)		(54.9	)		(17.4	)
State		(0.9	)		(2.0	)		(3.1	)
Foreign		(16.2	)		(15.6	)		0.8
		(19.7	)		(72.5	)		(19.7	)
Provision for income taxes	$	218.9		$	263.3		$	280.8

Reconciliation of the U.S. statutory income tax rate to effective tax rate

A reconciliation of the U.S. statutory income tax rate to our effective tax rate is as follows:

For the Years Ended December 31,	2011			2010			2009
U.S. statutory income tax rate		35.0	%		35.0	%		35.0	%
State taxes, net of federal deduction		0.7			1.3			1.4
Tax impact of foreign operations, including foreign tax credits		(11.0	)		(10.6	)		(9.9	)
Tax benefit relating to U.S. manufacturer’s deduction and export sales		(1.6	)		(2.6	)		(1.5	)
R&D credit		(0.5	)		(0.8	)		(0.3	)
Goodwill impairment		–			8.3			2.6
Other		(0.2	)		–			0.8
Effective income tax rate		22.4	%		30.6	%		28.1	%

Components of deferred taxes

The components of deferred taxes consisted of the following (in millions):

As of December, 31	2011			2010
Deferred tax assets:
Inventory	$	218.5		$	234.3
Net operating loss carryover		23.5			22.0
Tax credit carryover		16.9			32.5
Capital loss carryover		4.0			–
Accrued liabilities		116.1			91.3
Share-based compensation		98.3			85.4
Unremitted earnings of foreign subsidiaries		103.9			104.2
Other		73.1			59.2
Total deferred tax assets		654.3			628.9
Less: Valuation allowances		(40.3	)		(39.9	)
Total deferred tax assets after valuation		614.0			589.0
Deferred tax liabilities:
Fixed assets	$	(111.6	)	$	(101.7	)
Intangible assets		(148.9	)		(151.9	)
Accrued liabilities		(1.0	)		(0.7	)
Other		–			(1.0	)
Total deferred tax liabilities		(261.5	)		(255.3	)
Total net deferred tax assets	$	352.5		$	333.7

Tabular reconciliation of the total amounts of unrecognized tax benefits

The following is a tabular reconciliation of the total amounts of unrecognized tax benefits (in millions):

For the Years Ended December 31,	2011			2010			2009
Balance at January 1	$	168.0		$	150.4		$	129.5
Increases related to prior periods		11.4			23.1			32.9
Decreases related to prior periods		(49.0	)		(6.1	)		(26.7	)
Increases related to current period		34.4			23.7			17.4
Decreases related to settlements with taxing authorities		(4.8	)		(14.1	)		(1.1	)
Decreases related to lapse of statute of limitations		(1.6	)		(9.0	)		(1.6	)
Balance at December 31	$	158.4		$	168.0		$	150.4