Income Taxes (Tables)

12 Months Ended

Dec. 31, 2015

Income Tax Disclosure [Abstract]

Components of Earnings Before Income Taxes

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

For the Years Ended December 31,	2015			2014		2013
United States operations	$	(246.2	)	$	403.3	$	412.4
Foreign operations		399.4			536.1		595.7
Total	$	153.2		$	939.4	$	1,008.1

Provision for Income Taxes and Income Taxes Paid

The provision for income taxes and the income taxes paid consisted of (in millions):
Current:
Federal	$	55.8		$	178.2		$	207.2
State		18.9			16.5			20.8
Foreign		96.3			116.0			127.7
		171.0			310.7			355.7
Deferred:
Federal		(120.6	)		(54.8	)		(91.8	)
State		(20.0	)		(6.6	)		(8.4	)
Foreign		(23.4	)		(29.1	)		(26.0	)
		(164.0	)		(90.5	)		(126.2	)
Provision for income taxes	$	7.0		$	220.2		$	229.5
Income taxes paid	$	193.6		$	340.1		$	272.3

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,	2015			2014			2013
U.S. statutory income tax rate		35.0	%		35.0	%		35.0	%
State taxes, net of federal deduction		(2.4	)		0.7			0.8
Tax impact of foreign operations, including foreign tax credits		(40.2	)		(11.7	)		(12.1	)
Change in valuation allowance		(3.7	)		–			–
Non-deductible expenses		2.4			–			–
Tax impact of certain significant transactions		21.6			1.4			1.6
Tax benefit relating to U.S. manufacturer’s deduction and export sales		(6.2	)		(1.9	)		(1.8	)
R&D credit		(2.5	)		(0.2	)		(0.6	)
Other		0.6			0.1			(0.1	)
Effective income tax rate		4.6	%		23.4	%		22.8	%

Components of Deferred Taxes

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

As of December 31,	2015			2014
Deferred tax assets:
Inventory	$	159.7		$	275.1
Net operating loss carryover		117.4			116.9
Tax credit carryover		207.8			185.5
Capital loss carryover		4.2			7.4
Accrued liabilities		190.2			106.7
Share-based compensation		59.0			59.9
Accounts receivable		23.7			–
Unremitted earnings of foreign subsidiaries		–			32.3
Other		133.6			50.3
Total deferred tax assets		895.6			834.1
Less: Valuation allowances		(72.7	)		(122.8	)
Total deferred tax assets after valuation allowances		822.9			711.3
Deferred tax liabilities:
Fixed assets	$	(144.6	)	$	(104.3	)
Intangible assets		(2,337.2	)		(95.9	)
Unremitted earnings of foreign subsidiaries		(1,374.8	)		–
Other		(4.3	)		–
Total deferred tax liabilities		(3,860.9	)		(200.2	)
Total net deferred income taxes	$	(3,038.0	)	$	511.1

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,	2015			2014			2013
Balance at January 1	$	321.7		$	311.0		$	293.9
Increase related to the merger*		247.6			–			–
Increases related to prior periods		1.3			0.9			16.5
Decreases related to prior periods		–			(3.8	)		(17.3	)
Increases related to current period		25.7			18.3			20.8
Decreases related to settlements with taxing authorities		(1.4	)		(3.0	)		(2.9	)
Decreases related to lapse of statute of limitations		(3.0	)		(1.7	)		–
Balance at December 31	$	591.9		$	321.7		$	311.0
Amounts impacting effective tax rate, if recognized balance at December 31*	$	526.6		$	186.3		$	191.2

* Subject to change during measurement period of the merger.