Income Taxes (Tables)

12 Months Ended

Dec. 31, 2013

Components of Deferred tax Assets and Liabilities

significant components of our deferred tax liabilities and assets as of December 31 (in millions):



	2013			2012
Deferred Tax Liabilities
Book/tax basis difference due to depreciation	$	852.0		$	806.7
Investments in affiliated companies	93.7			81.6
Lease accounting	24.4			12.6
Other	—			3.1
Total deferred tax liabilities	970.1			904.0
Deferred Tax Assets
Federal net operating loss	8.9			—
Alternative minimum tax credit	8.4			5.2
Foreign tax credit	3.6			7.3
Valuation allowance on foreign tax credit	(3.6		)	(7.3		)
State net operating loss	27.1			26.6
Valuation allowance on state net operating loss	(11.2		)	(12.8		)
Foreign net operating loss	8.5			9.5
Valuation allowance on foreign net operating loss	(0.2		)	—
Accruals not currently deductible for tax purposes	14.1			19.1
Allowance for losses	2.2			6.6
Pension and post-retirement benefits	13.3			48.6
Other	7.6			18.2
Total deferred tax assets	78.7			121.0
Net deferred tax liabilities	$	891.4		$	783.0

Gross liability for unrecognized tax benefits

The following table shows a reconciliation of the beginning and ending amount of our gross liability for unrecognized tax benefits (in millions)



	2013		2012
Beginning balance	$	4.7	$	20.8
Reductions due to expiration of the applicable statute of limitations	—		(16.1		)
Additions to tax positions for prior years	1.0		—
Ending balance	$	5.7	$	4.7

Income before income taxes

The following table shows the components of income before income taxes, excluding affiliates, for the years ending December 31 (in millions):



	2013		2012		2011
Domestic	$	66.0	$	80.5	$	39.5
Foreign	93.0		63.3		68.1
	$	159.0	$	143.8	$	107.6

Consolidated federal income taxes

The following table shows income taxes, excluding domestic and foreign joint ventures, for the years ending December 31 (in millions):



	2013		2012			2011
Current
Domestic:
Federal	$	1.4	$	(8.8	)	$	0.7
State and local	—		2.5			0.8
	1.4		(6.3		)	1.5
Foreign	10.5		8.0			5.0
	11.9		1.7			6.5
Deferred
Domestic:
Federal	36.6		16.0			8.9
State and local	5.3		(3.1		)	0.5
	41.9		12.9			9.4
Foreign	11.7		11.5			13.3
	53.6		24.4			22.7
Income taxes	$	65.5	$	26.1		$	29.2

Summary of reasons for difference between GATX's effective income tax rate and federal statutory income tax

The following table shows the differences between our effective income tax rate and the federal statutory income tax rate for the years ending December 31 (in millions):



	2013			2012			2011
Income taxes at federal statutory rate	$	55.6		$	50.4		$	37.7
Adjust for effect of:
GATX income taxes on sale of AAE	23.2			—			—
Foreign tax credits	(3.9		)	(13.7		)	(0.1		)
Foreign earnings taxed at lower rates	(10.3		)	(4.1		)	(6.7		)
Tax effect of foreign dividends	—			6.3			—
Expiration of the applicable statute of limitations	—			(15.5		)	—
Settlement of audit issues	—			—			(4.8		)
Corporate owned life insurance	(0.5		)	(0.3		)	(0.2		)
State income taxes	1.5			1.9			1.1
Other	(0.1		)	1.1			2.2
Income taxes	$	65.5		$	26.1		$	29.2
Effective income tax rate	41.2		%	18.2		%	27.1		%

- 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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