5. Income Taxes

The provision for income taxes on pre-tax income includes the following components:

	For the Year Ended May 31,

	2014			2013			2012
Current:
Federal	$	(0.5	)	$	(13.1	)	$	(9.8	)
State		0.2			(1.8	)		(0.5	)
Foreign		22.8			12.1			3.0


		22.5			(2.8	)		(7.3	)
Deferred		9.6			29.5			32.8


	$	32.1		$	26.7		$	25.5

Income tax receivable at May 31, 2014 and 2013 was $14.8 million and $18.0 million, respectively, and is included in deposits, prepaids and other on the Consolidated Balance Sheet.

The provision for income taxes on pre-tax income differs from the amount computed by applying the U.S. federal statutory income tax rate of 35% for fiscal 2014, 2013 and 2012 to income before taxes, due to the following:

	For the Year Ended May 31,

	2014			2013			2012
Provision for income taxes at the federal statutory rate	$	36.9		$	28.8		$	32.7
State income taxes, net of federal benefit and refunds		0.2			(1.0	)		(3.5	)
Federal adjustments		(2.2	)		—			(3.3	)
Domestic Production Activities Deduction		(1.6	)		—			—
Research and development credit		(1.0	)		(1.1	)		(0.8	)
Noncontrolling interest		(0.1	)		(0.2	)		(0.1	)
Other		(0.1	)		0.2			0.5


Provision for income taxes	$	32.1		$	26.7		$	25.5

Deferred tax liabilities and assets result primarily from the differences in the timing of the recognition of transactions for financial reporting and income tax purposes and consist of the following components:

	May 31,

	2014			2013
Deferred tax assets-current attributable to:
Inventory costs	$	14.4		$	14.8
Employee benefits		7.9			8.3
Allowance for doubtful accounts		0.8			1.6
Advanced billings and other		7.0			(6.7	)


Total net deferred tax assets-current	$	30.1		$	18.0


Deferred tax assets-noncurrent attributable to:
Postretirement benefits	$	17.6		$	17.7
Bond hedge		0.8			1.7
Foreign intangible assets		37.5			41.5
AMT, NOL and FTC carrybacks		20.6			37.6
Other		3.0			1.0


Total deferred tax assets-noncurrent	$	79.5		$	99.5


Total deferred tax assets	$	109.6		$	117.5




Deferred tax liabilities attributable to:
Depreciation	$	(166.9	)	$	(163.5	)
Convertible notes		(2.1	)		(3.9	)
Capitalized program development costs		(34.1	)		(28.8	)
Foreign intangible assets		(37.5	)		(41.5	)
Other		(1.1	)		—


Total deferred tax liabilities	$	(241.7	)	$	(237.7	)




Net deferred tax liabilities	$	(132.1	)	$	(120.2	)

As of May 31, 2014, we have determined that the realization of our deferred tax assets is more likely than not, and that a valuation allowance is not required based upon our history of operating earnings, our expectations for continued future earnings, the nature of certain of our deferred tax assets and the scheduled reversal of deferred tax liabilities, primarily related to depreciation.

Our fiscal 2014 effective income tax rate was 30.5% which included a $2.7 million reduction in income tax expense related to changes in estimates originally used in the tax provision which were adjusted to actual on the federal income tax return. In addition, our higher forecasted taxable income in fiscal 2014 provided a tax benefit of $1.6 million related to the Domestic Production Activities Deduction in accordance with Internal Revenue Code Section 199. Our fiscal 2013 effective income tax rate was 32.5%, which included a $1.3 million reduction in income tax expense related to the reduction of our state income tax rate from continued implementation of state tax planning strategies. Our fiscal 2012 effective income tax rate was 27.2%, which included a $3.3 million reduction in income tax expense primarily relating to revisions in book versus tax differences, and a $4.0 million reduction in income tax expense, primarily related to the reduction in our state income tax rate from the implementation of state tax planning strategies. Our state tax planning strategies included a new corporate structure and the relocation of one of our significant business units.

Fiscal years 2013 and subsequent are open for examination. Various states and foreign jurisdictions also remain open subject to their applicable statute of limitations.