Income Taxes (Tables)

12 Months Ended

Dec. 31, 2016

Components of Deferred tax Assets and Liabilities

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



	2016			2015
Deferred Tax Liabilities
Book/tax basis difference due to depreciation	$	1,119.1		$	1,058.1
Investments in affiliated companies	69.5			72.9
Lease accounting	11.1			7.3
Other	1.0			—
Total deferred tax liabilities	1,200.7			1,138.3
Deferred Tax Assets
Federal net operating loss	—			13.2
Alternative minimum tax credit	8.0			14.8
Foreign tax credit	—			5.8
Valuation allowance on foreign tax credit	—			(5.8		)
State net operating loss	25.4			27.7
Valuation allowance on state net operating loss	(12.9		)	(12.6		)
Foreign net operating loss	2.9			3.6
Valuation allowance on foreign net operating loss	(0.3		)	(0.3		)
Accruals not currently deductible for tax purposes	26.7			22.2
Allowance for losses	1.5			3.2
Pension and post-retirement benefits	30.9			35.8
Other	29.1			12.4
Total deferred tax assets	111.3			120.0
Net deferred tax liabilities	$	1,089.4		$	1,018.3

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)



	2016			2015
Beginning balance	$	5.7		$	5.6
Additions to tax positions of prior years	—			0.1
Reduction for tax positions of prior years	(1.4		)	—
Ending balance	$	4.3		$	5.7

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):



	2016		2015		2014
Domestic	$	211.0	$	174.7	$	137.9
Foreign	94.4		95.6		93.3
	$	305.4	$	270.3	$	231.2

Consolidated federal income taxes

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



	2016		2015			2014
Current
Domestic:
Federal	$	6.0	$	5.6		$	0.7
State and local	—		(0.2		)	0.6
	6.0		5.4			1.3
Foreign	16.9		15.3			13.0
	22.9		20.7			14.3
Deferred
Domestic:
Federal	55.8		44.7			45.0
State and local	10.5		33.7			5.6
	66.3		78.4			50.6
Foreign	6.5		11.8			10.8
	72.8		90.2			61.4
Income taxes	$	95.7	$	110.9		$	75.7

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):



	2016			2015			2014
Income taxes at federal statutory rate	$	106.9		$	94.6		$	80.9
Adjust for effect of:
Foreign tax credits	(7.8		)	—			—
Foreign earnings taxed at lower rates	(9.7		)	(6.2		)	(8.5		)
Corporate owned life insurance	(1.7		)	(0.9		)	(0.6		)
State income taxes	6.8			7.6			4.1
State deferred tax rate change impact	—			14.1			—
Other	1.2			1.7			(0.2		)
Income taxes	$	95.7		$	110.9		$	75.7
Effective income tax rate	31.3		%	41.0		%	32.7		%