Income Taxes (Tables)

12 Months Ended

Dec. 31, 2015

Components of Deferred tax Assets and Liabilities

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



	2015			2014
Deferred Tax Liabilities
Book/tax basis difference due to depreciation	$	1,058.1		$	963.8
Investments in affiliated companies	72.9			99.7
Lease accounting	7.3			10.5
Other	—			0.1
Total deferred tax liabilities	1,138.3			1,074.1
Deferred Tax Assets
Federal net operating loss	13.2			41.8
Alternative minimum tax credit	14.8			9.2
Foreign tax credit	5.8			3.6
Valuation allowance on foreign tax credit	(5.8		)	(3.6		)
State net operating loss	27.7			28.7
Valuation allowance on state net operating loss	(12.6		)	(11.3		)
Foreign net operating loss	3.6			5.8
Valuation allowance on foreign net operating loss	(0.3		)	(0.2		)
Accruals not currently deductible for tax purposes	22.2			18.7
Allowance for losses	3.2			1.7
Pension and post-retirement benefits	35.8			32.6
Other	12.4			9.8
Total deferred tax assets	120.0			136.8
Net deferred tax liabilities	$	1,018.3		$	937.3

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)



	2015		2014
Beginning balance	$	5.6	$	5.7
Reductions due to settlement of tax audit issues	—		(0.4		)
Additions to tax positions for prior years	0.1		0.3
Ending balance	$	5.7	$	5.6

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):



	2015		2014		2013
Domestic	$	174.7	$	137.9	$	66.0
Foreign	95.6		93.3		93.0
	$	270.3	$	231.2	$	159.0

Consolidated federal income taxes

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



	2015			2014		2013
Current
Domestic:
Federal	$	5.6		$	0.7	$	1.4
State and local	(0.2		)	0.6		—
	5.4			1.3		1.4
Foreign	15.3			13.0		10.5
	20.7			14.3		11.9
Deferred
Domestic:
Federal	44.7			45.0		36.6
State and local	33.7			5.6		5.3
	78.4			50.6		41.9
Foreign	11.8			10.8		11.7
	90.2			61.4		53.6
Income taxes	$	110.9		$	75.7	$	65.5

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):



	2015			2014			2013
Income taxes at federal statutory rate	$	94.6		$	80.9		$	55.6
Adjust for effect of:
GATX income taxes on sale of AAE	—			—			23.2
Foreign tax credits	—			—			(3.9		)
Foreign earnings taxed at lower rates	(6.2		)	(8.5		)	(10.3		)
Tax effect of foreign dividends	0.9			—			—
Corporate owned life insurance	(0.9		)	(0.6		)	(0.5		)
State income taxes	7.6			4.1			1.5
State deferred tax rate change impact	14.1			—			—
Other	0.8			(0.2		)	(0.1		)
Income taxes	$	110.9		$	75.7		$	65.5
Effective income tax rate	41.0		%	32.7		%	41.2		%