Income Taxes (Tables)

12 Months Ended

Dec. 31, 2014

The provision for income taxes was as follows:


Year Ended December 31	2014			2013			2012
Current
United States
Federal	$	44.8		$	(0.8	)	$	17.5
State		7.0			3.4			9.6
Non-United States		148.2			167.9			155.3
Total current		200.0			170.5			182.4
Deferred
United States
Federal		53.2			21.0			(20.4	)
State		(1.9	)		0.9			0.5
Non-United States		2.7			(4.9	)		8.3
Total deferred		54.0			17.0			(11.6	)
Total provision	$	254.0		$	187.5		$	170.8

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		2014			2013			2012
Income tax based on statutory rate	$	238.6		$	166.4		$	128.9
Increase (decrease) resulting from:
Non-United States tax rate difference		20.1			27.7			40.8
Repatriation of non-United States earnings		(10.1	)		(20.5	)		(16.9	)
State income taxes, net of Federal benefit		2.9			3.2			6.7
Change in valuation reserve		5.0			(0.5	)		4.7
Other, net		(2.5	)		11.2			6.6
Tax provision	$	254.0		$	187.5		$	170.8

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:


December 31	2014			2013
Current Future Income Tax Benefits (Expense)
Accrued payroll taxes and insurance	$	11.4		$	17.9
Employee compensation payable		28.1			26.5
Pension and postretirement benefits		(5.2	)		(4.7	)
Repatriation of non-United States earnings		(53.1	)		(16.7	)
Other		50.8			46.0
Valuation allowance		(4.1	)		(15.7	)
		27.9			53.3
Noncurrent Future Income Tax Benefits (Expense)
Accrued payroll taxes and insurance		21.4			19.7
Pension and postretirement benefits		65.7			54.9
Intangible assets		(124.7	)		(122.1	)
Net operating losses		129.7			151.0
Other		43.3			70.3
Valuation allowance		(103.8	)		(111.4	)
		31.6			62.4
Total future tax benefits	$	59.5		$	115.7
Current tax asset	$	52.2		$	66.2
Current tax liability		(20.6	)		(4.4	)
Noncurrent tax asset		54.0			68.2
Noncurrent tax liability		(26.1	)		(14.3	)
Total future tax benefits	$	59.5		$	115.7

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 $435.5 and $317.6, respectively, as of December 31, 2014. The net operating loss carryforwards expire as follows:

	United States Federal		United States
	and Non-United States		State
2015	$	3.3	$	3.8
2016		7.4		2.0
2017		5.6		6.8
2018		4.0		6.0
2019		9.9		—
Thereafter		48.8		299.0
No expirations		356.5		—
Total net operating loss carryforwards	$	435.5	$	317.6

Unrecognized tax benefit activity

The following table summarizes the activity related to our unrecognized tax benefits during 2014, 2013 and 2012:


	2014			2013			2012
Gross unrecognized tax benefits, beginning of year	$	23.9		$	26.4		$	25.0
Increases in prior year tax positions		0.7			2.1			5.8
Decreases in prior year tax positions		(1.2	)		(5.6	)		(0.8	)
Increases for current year tax positions		2.2			3.4			3.1
Expiration of statute of limitations and audit settlements		(2.6	)		(2.4	)		(6.7	)
Gross unrecognized tax benefits, end of year	$	23.0		$	23.9		$	26.4
Potential interest and penalties		7.8			8.4			2.1
Balance, end of year	$	30.8		$	32.3		$	28.5

- 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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