Income Taxes

12 Months Ended

Dec. 31, 2011

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

Note 12 — Income Taxes

The following table sets forth selected data with respect to the Company's income tax provisions for the years ended December 31, (in millions):

		2011		2010		2009
Income before income taxes:
	United States	$	282.5	$	224.5	$	183.1
	International		107.3		95.9		78.5
	TOTAL INCOME BEFORE INCOME TAXES	$	389.8	$	320.4	$	261.6
Provision for income taxes — current:
	Federal	$	61.7	$	47.5	$	25.3
	State		9.7		7.8		7.2
	International		29.4		21.3		15.5
	Total provision-current		100.8		76.6		48.0
Provision for income taxes — deferred:
	Federal	$	23.3	$	24.3	$	29.5
	State		(0.3)		1.5		(0.2)
	International		(4.2)		(0.8)		3.0
	Total provision — deferred		18.8		25.0		32.3
	TOTAL PROVISION FOR INCOME TAXES	$	119.6	$	101.6	$	80.3

Deferred tax assets and liabilities result from differences in the basis of assets and liabilities for tax and financial statement purposes. The components of the deferred tax assets/(liabilities) at December 31, were as follows (in millions):

		2011		2010
Deferred tax assets:
	Inventory	$	8.8	$	8.0
	Income tax credits		21.4		18.8
	Accrued liabilities		15.4		13.8
	Pension		69.9		35.7
	Postretirement and post employment benefits		12.8		18.8
	Stock-based compensation		12.0		11.3
	Net operating loss carryforwards		66.3		75.9
	Miscellaneous other		5.0		1.4
	Gross deferred tax assets		211.6		183.7
	Valuation allowance		(3.2)		(2.6)
	Total deferred tax assets, net of valuation allowance	$	208.4	$	181.1
Deferred tax liabilities:
	Acquisition basis difference		(117.4)		(115.7)
	Property, plant, and equipment		(36.9)		(27.7)
	Total deferred tax liabilities	$	(154.3)	$	(143.4)
	Total Net Deferred Tax Asset	$	54.1	$	37.7
Deferred taxes are reflected in the Consolidated Balance Sheet as follows:
	Current tax assets (included in Deferred taxes and other)	$	29.5	$	24.7
	Non-current tax assets (included in Other long-term assets)		40.6		34.2
	Non-current tax liabilities (included in Other Non-current liabilities)		(16.0)		(21.2)
	Total Net Deferred Tax Asset	$	54.1	$	37.7

As of December 31, 2011, the Company had a total of $21.4 million of Federal and State tax credit carryforwards, net of Federal benefit, available to offset future income taxes, of which $0.8 million may be carried forward indefinitely while the remaining $20.6 million will begin to expire at various times beginning in 2012 through 2027. The Company has recorded a net valuation allowance of $3.2 million for the portion of the tax credit carryforwards the Company anticipates will expire prior to utilization. Additionally, as of December 31, 2011, the Company had recorded tax benefits totaling $66.3millionfor Federal, State and Foreign net operating loss carryforwards (“NOLs”). The tax benefit related to these NOLs has been adjusted to reflect an “ownership change” pursuant to Internal Revenue Code Section 382, which imposes an annual limitation on the utilization of pre-acquisition operating losses. The Company expects to fully utilize the adjusted NOLs prior to their expiration.

At December 31, 2011, income and withholding taxes have not been provided on approximately $451.1million of undistributed international earnings that are permanently reinvested in international operations. If such earnings were not indefinitely reinvested, a tax liability of approximately $87.8million would be recognized.

Cash payments of income taxes were $80.1million, $74.0million and $53.4million in 2011, 2010, and 2009, respectively.

The Company operates within multiple taxing jurisdictions and is subject to audit in these jurisdictions. The IRS and other tax authorities routinely audit the Company's tax returns. These audits can involve complex issues which may require an extended period of time to resolve. During 2011, the IRS initiated an audit of the Company's 2008 and 2009 federal income tax returns.With few exceptions, the Company is no longer subject to state, local, or non-U.S. income tax examinations by tax authorities for years prior to 2004.

The following tax years, by major jurisdiction, are still subject to examination by taxing authorities:

Jurisdiction	Open Years
United States	2008-2011
Canada	2008-2011
UK	2009-2011

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in millions):

	2011		2010		2009
Unrecognized tax benefits at beginning of year	$	25.2	$	30.6	$	17.3
Additions based on tax positions relating to the current year		2.7		2.5		3.0
Reductions based on expiration of statute of limitations		(1.3)		(0.7)		(1.4)
Additions to tax positions relating to previous years		1.2		1.0		11.8
Settlements		(0.2)		(8.2)		(0.1)
Total unrecognized tax benefits	$	27.6	$	25.2	$	30.6

Included in the balance at December 31, 2011 are $15.7million of tax positions which, if in the future are determined to be recognizable, would affect the annual effective income tax rate. Additionally, there are $1.2million of tax positions for which the ultimate deductibility is highly certain but for which there is uncertainty as to the timing of such deductibility. Because of the impact of deferred tax accounting, other than interest and penalties, the disallowance of the shorter deductibility period would not affect the annual effective tax rate but would accelerate the payment of cash to the applicable taxing authority to an earlier period.

The Company's policy is to record interest and penalties associated with the underpayment of income taxes within Provision for income taxes in the Consolidated Statement of Income. The Company recognized expense,before federal tax benefit, related to interest and penalties of approximately $0.4million in 2011, $1.0million in 2010 and $0.8 million 2009. The Company had$1.9million and $1.5million accrued for the payment of interest and penalties as of December 31, 2011 andDecember 31, 2010, respectively.

The consolidated effective income tax rate varied from the United States federal statutory income tax rate for the years ended December 31, as follows:

	2011		2010		2009
Federal statutory income tax rate	35.0	%	35.0	%	35.0	%
State income taxes, net of federal benefit	1.4		1.3		1.9
Foreign income taxes	(3.6)		(4.2)		(3.1)
Out of period adjustment	-		-		(1.9)
Other, net	(2.1)		(0.4)		(1.2)
Consolidated effective income tax rate	30.7	%	31.7	%	30.7	%