Income Taxes (Tables)

12 Months Ended

Dec. 31, 2014

Schedule of Components of Income Tax Expense

Tax Expense. Income tax expense consists of the following components (in millions):



	2014			2013		2012
Current:
Federal	$	(2.5	)	$	6.0	$	2.8
State and local	1.2			1.9		0.7
Foreign	70.0			79.2		36.2
Total current	68.7			87.1		39.7
Deferred:
Federal	112.6			99.0		99.2
State and local	16.9			11.9		(7.4		)
Foreign	10.6			0.3		105.5
Total deferred	140.1			111.2		197.3
Total income tax expense	$	208.8		$	198.3	$	237.0

Schedule of Income before Income Taxes, Domestic and Foreign

Income before income taxes consists of the following (in millions):



	2014		2013		2012
Income before income taxes:
U.S.	$	341.8	$	319.2	$	282.8
Foreign	371.3		232.4		333.6
Total income before income taxes	$	713.1	$	551.6	$	616.4

Schedule of Deferred Tax Assets and Liabilities

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities follow at December 31 (in millions):



	2014			2013
Assets:
Loss carryovers	$	52.2		$	52.6
Reserves not currently deductible for tax	94.5			91.2
Other	69.3			64.6
Gross deferred tax assets before valuation allowance	216.0			208.4
Valuation allowance	(0.9		)	(2.7		)
Net deferred tax assets	215.1			205.7
Liabilities:
Property	(1,194.7		)	(1,044.6		)
Investments	(68.2		)	(66.3		)
Other	(8.4		)	(7.8		)
Gross deferred tax liabilities	(1,271.3		)	(1,118.7		)
Net deferred tax liability	$	(1,056.2	)	$	(913.0	)

Schedule of Effective Income Tax Rate Reconciliation

Tax Rates. Differences between the Company’s effective income tax rate and the U.S. federal statutory income tax rate of 35% follow (in millions):



	2014					2013					2012
	Dollars			Percent		Dollars			Percent		Dollars			Percent
Income tax expense using the statutory rate in effect	$	249.6		35.0	%	$	193.1		35.0	%	$	215.7		35.0	%
Tax effect of:
Difference between U.S. and foreign tax rate	(23.0		)	(3.2	%)	(15.4		)	(2.8	%)	(18.4		)	(3.0	%)
Foreign exchange and inflation adjustments (i)	(25.6		)	(3.6	%)	4.7			0.8	%	42.3			6.9	%
State and local income tax provision, net	11.7			1.6	%	8.9			1.6	%	8.4			1.3	%
Change in valuation allowances	(1.8		)	(0.3	%)	(0.9		)	(0.2	%)	(11.2		)	(1.8	%)
Other, net	(2.1		)	(0.2	%)	7.9			1.5	%	0.2			—
Income tax expense	$	208.8		29.3	%	$	198.3		35.9	%	$	237.0		38.4	%

_____________________

(i)

Mexican income taxes are paid in Mexican pesos, and as a result, the effective income tax rate reflects fluctuations in the value of the Mexican peso against the U.S. dollar. Most significantly, any gain or loss from the revaluation of net U.S. dollar-denominated monetary liabilities (primarily debt) into Mexican pesos is included in Mexican taxable income under Mexican tax law. As a result, a strengthening of the Mexican peso against the U.S. dollar for the reporting period will generally increase the Mexican cash tax obligation and the effective income tax rate, and a weakening of the Mexican peso against the U.S. dollar for the reporting period will generally decrease the Mexican cash tax obligation and the effective tax rate. To hedge its exposure to this risk, during 2014 and 2013 the Company entered into foreign currency forward contracts, which are measured at fair value each period and any change in fair value is recognized in foreign exchange gain (loss) within the consolidated statements of income. Refer to Note 8 Derivative Instruments for further information.

Schedule of Change in Unrecognized Tax Benefits

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



	2014			2013
Balance at January 1,	$	3.5		$	3.6
Additions based on tax positions related to the current year	—			—
Additions for tax positions of prior years	—			—
Reductions for tax positions of prior years	(1.8		)	(0.1		)
Balance at December 31,	$	1.7		$	3.5