Income Taxes (Tables)

12 Months Ended

Dec. 31, 2012

The provision for income taxes was as follows:


Year Ended December 31		2012			2011			2010
Current
United States
Federal	$	17.5		$	24.2		$	37.4
State		9.6			2.8			3.2
Non-United States		155.3			176.5			126.3
Total current		182.4			203.5			166.9
Deferred
United States
Federal		(20.4	)		(2.3	)		(81.1	)
State		0.5			3.3			(2.9	)
Non-United States		8.3			23.8			15.5
Total deferred		(11.6	)		24.8			(68.5	)
Total provision	$	170.8		$	228.3		$	98.4

Effective Income Tax Rate Reconciliation

A reconciliation between taxes computed at the United States Federal statutory rate of 35% and the consolidated effective tax rate is as follows:


Year Ended December 31		2012			2011			2010
Income tax based on statutory rate	$	128.9		$	168.0		$	(57.8	)
Increase (decrease) resulting from:
State income taxes, net of Federal benefit		6.7			5.2			(0.6	)
Non-United States tax rate difference		40.8			40.6			38.7
Repatriation of non-United States earnings		(16.9	)		11.1			(4.8	)
Change in valuation reserve		4.7			(3.3	)		11.7
Non-deductible goodwill impairment charge		—			—			109.1
Other, net		6.6			6.7			2.1
Tax provision	$	170.8		$	228.3		$	98.4

Components of Future Income Tax Benefits (Expense)

Deferred income taxes are recorded on temporary differences at the tax rate expected to be in effect when the temporary differences reverse. Temporary differences, which gave rise to the deferred taxes, were as follows:


Year Ended December 31		2012			2011
Current Future Income Tax Benefits (Expense)
Accrued payroll taxes and insurance	$	11.8		$	10.7
Employee compensation payable		20.3			26.8
Pension and postretirement benefits		(3.0	)		(5.6	)
Other		32.5			22.0
Valuation allowance		(4.9	)		(2.9	)
		56.7			51.0
Noncurrent Future Income Tax Benefits (Expense)
Accrued payroll taxes and insurance		19.9			22.5
Pension and postretirement benefits		58.7			55.0
Intangible assets		(118.1	)		(126.4	)
Net operating losses		149.0			144.9
Other		82.7			103.5
Valuation allowance		(126.2	)		(116.3	)
		66.0			83.2
Total future tax benefits	$	122.7		$	134.2
Current tax asset	$	60.6		$	52.4
Current tax liability		(3.9	)		(1.4	)
Noncurrent tax asset		84.4			102.7
Noncurrent tax liability		(18.4	)		(19.5	)
Total future tax benefits	$	122.7		$	134.2

Net Operating Loss Carryforwards

We have United States Federal and non-United States net operating loss carryforwards and United States state net operating loss carryforwards totaling $483.4 and $310.9, respectively, as of December 31, 2012. The net operating loss carryforwards expire as follows:


	United States Federal and Non-United States		United States — State
2013	$	1.9	$	2.0
2014		7.0		7.6
2015		7.1		4.1
2016		10.5		2.9
2017		5.6		6.2
Thereafter		134.7		288.1
No expirations		316.6		—
Total net operating loss carryforwards	$	483.4	$	310.9

Unrecognized Tax Benefit Activity

The following table summarizes the activity related to our unrecognized tax benefits during 2012, 2011 and 2010:


		2012			2011			2010
Gross unrecognized tax benefits, beginning of year	$	25.0		$	25.0		$	41.7
Increases in prior year tax positions		5.8			0.9			3.0
Decreases in prior year tax positions		(0.8	)		(1.5	)		(2.0	)
Increases for current year tax positions		3.1			2.5			—
Expiration of statute of limitations and audit settlements		(6.7	)		(1.9	)		(17.7	)
Gross unrecognized tax benefits, end of year	$	26.4		$	25.0		$	25.0
Potential interest and penalties		2.1			2.0			1.4
Balance, end of year	$	28.5		$	27.0		$	26.4

- 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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