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INCOME TAXES (Tables)
12 Months Ended
Dec. 31, 2012
Components of Earnings Before Taxes

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

 

For the Years Ended December 31,    2012      2011      2010  

United States operations

   $ 409.9       $ 485.7       $ 382.4   

Foreign operations

     580.2         493.2         477.8   

 

    

 

 

    

 

 

 

Total

   $ 990.1       $ 978.9       $ 860.2   

 

    

 

 

    

 

 

 

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

 

Current:

      

Federal

   $ 179.8      $ 148.4      $ 235.3   

State

     13.8        14.3        19.5   

Foreign

     108.4        75.9        81.0   

 

   

 

 

   

 

 

 
     302.0        238.6        335.8   

 

   

 

 

   

 

 

 

Deferred:

      

Federal

     (58.8     (2.6     (54.9

State

     0.7        (0.9     (2.0

Foreign

     (6.7     (16.2     (15.6

 

   

 

 

   

 

 

 
     (64.8     (19.7     (72.5

 

   

 

 

   

 

 

 

Provision for income taxes

   $ 237.2      $ 218.9      $ 263.3   

 

   

 

 

   

 

 

 
Reconciliation of U.S. Statutory Income Tax Rate to our 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,    2012     2011     2010  

U.S. statutory income tax rate

     35.0     35.0     35.0

State taxes, net of federal deduction

     1.0        0.7        1.3   

Tax impact of foreign operations,
including foreign tax credits

     (10.4     (11.0     (10.6

Tax impact of significant non-recurring transactions

     (3.5              

Tax benefit relating to U.S.
manufacturer’s deduction and export sales

     (1.9     (1.6     (2.6

R&D credit

            (0.5     (0.8

Goodwill impairment

     3.4               8.3   

Other

     0.4        (0.2       

 

   

 

 

   

 

 

 

Effective income tax rate

     24.0     22.4     30.6

 

   

 

 

   

 

 

 
Components of Deferred Taxes

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

 

As of December, 31    2012     2011  

Deferred tax assets:

    

Inventory

   $ 225.1      $ 218.5   

Net operating loss carryover

     26.8        23.5   

Tax credit carryover

     16.4        16.9   

Capital loss carryover

     4.0        4.0   

Accrued liabilities

     67.0        116.1   

Share-based compensation

     106.3        98.3   

Unremitted earnings of foreign subsidiaries

     172.3        103.9   

Other

     42.3        73.1   

 

   

 

 

 

Total deferred tax assets

     660.2        654.3   

Less: Valuation allowances

     (41.3     (40.3

 

   

 

 

 

Total deferred tax assets after valuation

     618.9        614.0   

 

   

 

 

 

Deferred tax liabilities:

    

Fixed assets

   $ (93.9   $ (111.6

Intangible assets

     (140.6     (148.9

Accrued liabilities

            (1.0

Other

     (1.0       

 

   

 

 

 

Total deferred tax liabilities

     (235.5     (261.5

 

   

 

 

 

Total net deferred tax assets

   $ 383.4      $ 352.5   

 

   

 

 

 
Tabular Reconciliation of 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,    2012     2011     2010  

Balance at January 1

   $ 158.4      $ 168.0      $ 150.4   

Increases related to prior periods

     118.7        11.4        23.1   

Decreases related to prior periods

     (8.9     (49.0     (6.1

Increases related to current period

     19.1        34.4        23.7   

Decreases related to settlements with taxing authorities

     (0.6     (4.8     (14.1

Decreases related to lapse of statute of limitations

     (1.2     (1.6     (9.0

 

   

 

 

   

 

 

 

Balance at December 31

   $ 285.5      $ 158.4      $ 168.0   

 

   

 

 

   

 

 

 

Amounts impacting effective tax rate, if recognized balance at December 31

   $ 159.0      $ 132.7      $ 112.2