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INCOME TAXES (Tables)
12 Months Ended
Dec. 31, 2013
Income Tax Disclosure [Abstract]  
Components of Earnings Before Taxes and Income Taxes Paid

The components of earnings before income taxes and the income taxes paid consisted of the following (in millions):

 

For the Years Ended December 31,    2013      2012      2011  

United States operations

   $ 400.7       $ 409.9       $ 485.7   

Foreign operations

     580.4         580.2         493.2   

 

    

 

 

    

 

 

 

Total

   $ 981.1       $ 990.1       $ 978.9   

 

    

 

 

    

 

 

 

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

 

Current:

      

Federal

   $ 199.0      $ 179.8      $ 148.4   

State

     20.6        13.8        14.3   

Foreign

     128.5        108.4        75.9   

 

   

 

 

   

 

 

 
     348.1        302.0        238.6   

 

   

 

 

   

 

 

 

Deferred:

      

Federal

     (87.7 )      (58.8 )      (2.6 ) 

State

     (8.5 )      0.7        (0.9 ) 

Foreign

     (30.0 )      (6.7 )      (16.2 ) 

 

   

 

 

   

 

 

 
     (126.2 )      (64.8 )      (19.7 ) 

 

   

 

 

   

 

 

 

Provision for income taxes

   $ 221.9      $ 237.2      $ 218.9   

 

   

 

 

   

 

 

 

Income taxes paid

   $ 272.3      $ 227.6      $ 236.4   
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,    2013     2012     2011  

U.S. statutory income tax rate

     35.0 %      35.0 %      35.0 % 

State taxes, net of federal deduction

     0.8        1.0        0.7   

Tax impact of foreign operations, including foreign tax credits

     (12.2 )      (10.4 )      (11.0 ) 

Tax impact of certain significant transactions

     1.6        (3.5 )      –   

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

     (1.8 )      (1.9 )      (1.6 ) 

R&D credit

     (0.6 )      –        (0.5 ) 

Goodwill impairment

     –        3.4        –   

Other

     (0.2 )      0.4        (0.2 ) 

 

   

 

 

   

 

 

 

Effective income tax rate

     22.6 %      24.0 %      22.4 % 

 

   

 

 

   

 

 

 
Components of Deferred Taxes

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

 

As of December, 31    2013     2012  

Deferred tax assets:

    

Inventory

   $ 271.1      $ 225.1   

Net operating loss carryover

     26.4        26.8   

Tax credit carryover

     187.1        16.4   

Capital loss carryover

     7.8        4.0   

Accrued liabilities

     72.0        67.0   

Share-based compensation

     74.6        106.3   

Unremitted earnings of foreign subsidiaries

     25.6        172.3   

Other

     11.2        42.3   

 

   

 

 

 

Total deferred tax assets

     675.8        660.2   

Less: Valuation allowances

     (42.7 )      (41.3 ) 

 

   

 

 

 

Total deferred tax assets after valuation

     633.1        618.9   

 

   

 

 

 

Deferred tax liabilities:

    

Fixed assets

   $ (97.7 )    $ (93.9 ) 

Intangible assets

     (106.4 )      (140.6 ) 

Other

     (1.2 )      (1.0 ) 

 

   

 

 

 

Total deferred tax liabilities

     (205.3 )      (235.5 ) 

 

   

 

 

 

Total net deferred tax assets

   $ 427.8      $ 383.4   

 

   

 

 

 
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,    2013     2012     2011  

Balance at January 1

   $ 285.5      $ 158.4      $ 168.0   

Increases related to prior periods

     16.5        118.7        11.4   

Decreases related to prior periods

     (17.3 )      (8.9 )      (49.0 ) 

Increases related to current period

     22.5        19.1        34.4   

Decreases related to settlements with taxing authorities

     (2.9 )      (0.6 )      (4.8 ) 

Decreases related to lapse of statute of limitations

     –        (1.2 )      (1.6 ) 

 

   

 

 

   

 

 

 

Balance at December 31

   $ 304.3      $ 285.5      $ 158.4   

 

   

 

 

   

 

 

 

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

   $ 186.3      $ 159.0      $ 132.7