INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2015

Schedule of components of earnings before income taxes

The components of earnings before income taxes were:



	Years Ended December 31,
(Dollars in millions)	2015		2014		2013
U.S.	$	183.6	$	92.6	$	141.9
Non-U.S.	687.6		835.4		782.4
Total	$	871.2	$	928.0	$	924.3

The above amounts are categorized based on the applicable taxing authorities.

Summary of components of provision (benefit) for income taxes

The provision/(benefit) for income taxes consisted of:



	Years Ended December 31,
(Dollars in millions)	2015			2014			2013
Current:
U.S. federal	$	39.8		$	53.7		$	79.1
U.S. states	2.7			4.2			2.4
Non-U.S.	130.1			156.3			130.6
Total current income tax expense	172.6			214.2			212.1

Deferred:
U.S. federal	44.2			(6.9		)	(6.4		)
U.S. states	3.3			(1.3		)	1.9
Non-U.S.	(4.2		)	(6.8		)	27.5
Total deferred income tax expense/(benefit)	43.3			(15.0		)	23.0

Total	$	215.9		$	199.2		$	235.1

Schedule of effective income tax rate reconciliation

—MJN’s provision for income taxes in the years ended December 31, 2015, 2014 and 2013 was different from the amount computed by applying the statutory U.S. federal income tax rate to earnings before income taxes as a result of the following:



(Dollars in millions)	2015					2014					2013
U.S. statutory rate	$	304.9		35.0	%	$	324.8		35.0	%	$	323.5		35.0	%
U.S. state and local taxes (net of federal benefit)	4.5			0.5		0.6			0.1		1.3			0.1
Foreign income taxed at different rates	(36.6		)	(4.2	)	(32.0		)	(3.4	)	(17.1		)	(1.9	)
Repatriation of foreign income	2.2			0.3		—			—		1.0			0.1
Tax rulings and agreements	(92.8		)	(10.6	)	(133.7		)	(14.4	)	(121.9		)	(13.2	)
Reversal of deferred tax on prior years' unremitted foreign earnings due to an indefinite investment assertion	—			—		—			—		(8.2		)	(0.9	)
Administrative penalty (China)	—			—		—			—		8.3			0.9
Unrecognized tax benefits and related interest/penalties	21.7			2.5		22.9			2.5		38.1			4.1
Other	12.0			1.3		16.6			1.7		10.1			1.2
Total provision/effective tax rate	$	215.9		24.8	%	$	199.2		21.5	%	$	235.1		25.4	%

Summary of components of current and noncurrent deferred income tax assets (liabilities)

The components of deferred income tax assets/(liabilities) were:



	December 31,
(Dollars in millions)	2015			2014
Deferred tax assets:
Accrued expenses	$	25.2		$	34.4
Accrued rebates and returns	43.2			48.1
Pension and other post-employment liabilities	47.6			70.3
Stock-based compensation	18.2			19.2
Obsolescence reserves and other inventory items	11.6			12.6
Net operating loss carryforwards	16.3			14.7
Settlement loss on interest rate forward swaps	15.6			16.2
Statutory loss on investment in subsidiaries	6.6			—
State tax credit carryforwards	8.8			7.2
Other—net	4.9			—
Valuation allowance	(14.8		)	(7.7		)
Total deferred tax assets	183.2			215.0
Deferred tax liabilities:
Depreciation and amortization	(68.0		)	(66.6		)
Unremitted earnings and cumulative foreign currency translation adjustments	(5.4		)	(4.2		)
Other—net	—			(5.8		)
Total deferred tax liabilities	(73.4		)	(76.6		)
Deferred tax assets—net	$	109.8		$	138.4
Recognized as:
Net deferred income tax assets—noncurrent	118.5			150.4
Net deferred income tax liabilities—noncurrent	(8.7		)	(12.0		)
Total	$	109.8		$	138.4

Schedule of reconciliation of changes in uncertain tax positions

A reconciliation of the Company’s changes in gross uncertain tax positions is as follows:



	Years Ended December 31,
(Dollars in millions)	2015			2014			2013
Balance at January 1:	$	127.3		$	102.6		$	64.7
Increases based on current year tax positions	19.9			26.6			23.8
Decreases based on current year tax positions	—			—			—
Increases based on prior year tax positions	6.5			10.4			18.9
Decreases based on prior year tax positions	(5.2		)	(1.6		)	—
Settlements	(2.0		)	—			—
Lapse of statute of limitations	(3.7		)	(9.9		)	(3.8		)
Cumulative translation adjustment	(1.6		)	(0.8		)	(1.0		)
Balance at December 31:	$	141.2		$	127.3		$	102.6