INCOME TAXES

A reconciliation of the Canadian statutory tax rate to our effective tax rate was as follows (in millions, except percentages).



	Three Months Ended September 30,						Six Months Ended September 30,
	2014			2013			2014			2013
Pre-tax income before equity in net income of non-consolidated affiliates and noncontrolling interests	$	36		$	52		$	97		$	73
Canadian statutory tax rate	25		%	25		%	25		%	25		%
Provision at the Canadian statutory rate	$	9		$	13		$	24		$	18
Increase (decrease) for taxes on income (loss) resulting from:
Exchange translation items	(15		)	2			(11		)	(7		)
Exchange remeasurement of deferred income taxes	(14		)	(2		)	(10		)	(17		)
Change in valuation allowances	25			15			36			52
Income items not subject to tax	3			(6		)	2			(7		)
Dividends not subject to tax	(14		)	(9		)	(24		)	(23		)
Enacted tax rate changes	—			7			—			7
Tax rate differences on foreign earnings	3			6			4			6
Uncertain tax positions	1			—			1			—
Income tax (benefit) provision	$	(2	)	$	26		$	22		$	29
Effective tax rate	(6		)%	50		%	23		%	40		%

The exchange remeasurement of deferred income taxes relates to deferred tax assets and liabilities in Brazil which get remeasured for currency fluctuations against the U.S. dollar. The change in valuation allowances primarily relates to tax losses in certain jurisdictions where we believe it is more likely than not that we will not be able to utilize those losses.

As of September 30, 2014, we had a net deferred tax liability of $239 million. This amount included gross deferred tax assets of approximately $905 million and a valuation allowance of $473 million. It is reasonably possible that our estimates of future taxable income may change within the next 12 months, resulting in a change to the valuation allowance in one or more jurisdictions.

Tax authorities continue to examine certain of our tax filings for fiscal years 2005 through 2013. As a result of audit settlements, judicial decisions, the filing of amended tax returns or the expiration of statutes of limitations, our reserves for unrecognized tax benefits, as well as reserves for interest and penalties, may decrease in the next 12 months by an amount up to approximately $3 million.