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INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2014

MILLIONS	2014		2013		2012

United States	$	937.7	$	725.8	$	594.8
International	760.7		572.5		417.8
Total	$	1,698.4	$	1,298.3	$	1,012.6

Provision for income taxes

MILLIONS	2014			2013			2012

Federal and state	$	344.3		$	301.3		$	141.3
International	253.4			153.8			173.2
Total current	597.7			455.1			314.5
Federal and state	(67.7		)	(124.0		)	31.7
International	(53.8		)	(6.5		)	(34.9		)
Total deferred	(121.5		)	(130.5		)	(3.2		)
Provision for income taxes	$	476.2		$	324.7		$	311.3

Net deferred tax assets and deferred tax liabilities

DECEMBER 31 (MILLIONS)	2014			2013

Deferred tax assets
Other accrued liabilities	$	122.9		$	125.9
Loss carryforwards	86.0			106.3
Share-based compensation	70.9			70.1
Pension and other comprehensive income	357.3			160.9
Foreign tax credits	15.6			29.9
Other, net	78.2			150.0
Valuation allowance	(74.2		)	(88.3		)
Total	656.7			554.8
Deferred tax liabilities
Property, plant and equipment basis differences	269.2			287.3
Intangible assets	1,392.2			1,488.0
Unremitted foreign earnings	37.4			94.5
Other, net	126.1			132.0
Total	1,824.9			2,001.8
Net deferred tax liabilities balance	$	(1,168.2	)	$	(1,447.0	)

Reconciliation of the statutory U.S. federal income tax rate to the company's effective income tax rate

	2014	2013	2012

Statutory U.S. rate	35.0%	35.0%	35.0%
State income taxes, net of federal benefit	1.6	1.1	1.1
Foreign operations	(6.1)	(4.5)	(3.0)
Domestic manufacturing deduction	(2.0)	(2.6)	(2.6)
R&D credit	(0.7)	(1.4)	—
Change in valuation allowance	(0 .1)	(1.0)	—
Nondeductible deal costs	—	0.2	0.5
Audit settlements and refunds	0.2	(0.8)	0.1
Other, net	0.1	(1.0)	(0.4)
Effective income tax rate	28.0%	25.0%	30.7%

Reconciliation of the beginning and ending amount of gross liability for unrecognized tax benefits

MILLIONS	2014			2013			2012

Balance at beginning of year	$	98.7		$	93.1		$	89.5
Additions based on tax positions related to the current year	5.3			9.1			7.5
Additions for tax positions of prior years	5.2			6.1			5.0
Reductions for tax positions of prior years	(17.8		)	(15.6		)	(3.4		)
Reductions for tax positions due to statute of limitations	(0.2		)	(3.6		)	(0.8		)
Settlements	(9.0		)	(0.7		)	(8.0		)
Assumed in connection with the Champion acquisition	—			9.8			—
Assumed in connection with the Nalco merger	—			—			7.8
Foreign currency translation	(3.5		)	0.5			(4.5		)
Balance at end of year	$	78.7		$	98.7		$	93.1

- Definition

Tabular disclosure of tax positions taken in the tax returns filed or to be filed for which it is more likely than not that the tax position will not be sustained upon examination by taxing authorities (i.e., uncertain tax positions) and other types of income tax contingencies, including: (1) the policy on classification of interest and penalties; (2) a tabular reconciliation of the total amounts of unrecognized tax benefits at the beginning and end of the period; the total amount(s) of: (3) unrecognized tax benefits that, if recognized, would affect the effective tax rate, and (4) interest and penalties recognized in each of the income statement and balance sheet; (5) for positions for which it is reasonably possible that the total amounts unrecognized will significantly change within 12 months of the reporting date the: (i) nature of the uncertainty, (ii) nature of the event that could occur that would cause the change, and (iii) an estimate of the range of the reasonably possible change or a statement that an estimate of the range cannot be made; and (6) a description of tax years that remain subject to examination by major tax jurisdictions.

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