The sources of income before taxes, classified between domestic and foreign entities are as follows:



Pre-tax income	2011		2010		2009
Domestic	$	834.0	$	876.1	$	848.0
Foreign	32.1		39.5		36.6
Total pre-tax income	$	866.1	$	915.6	$	884.6

The provisions for income taxes in the accompanying consolidated statements of operations consist of the following:



	Years Ended December 31,
	2011			2010			2009
Current:
Federal	$	269.7		$	269.9		$	266.2
State	54.3			50.4			41.0
Foreign	6.8			10.8			12.2
	$	330.8		$	331.1		$	319.4
Deferred:
Federal	$	5.0		$	12.2		$	25.3
State	(4.4		)	(0.5		)	(15.5		)
Foreign	1.6			1.2			(0.2		)
	2.2			12.9			9.6
	$	333.0		$	344.0		$	329.0

A portion of the tax benefit associated with option exercises from stock plans reducing taxes currently payable are recorded through additional paid-in capital. The benefits recorded through additional paid-in capital are approximately $11.0, $7.8 and $1.1 in 2011, 2010 and 2009, respectively.

The effective tax rates on earnings before income taxes are reconciled to statutory federal income tax rates as follows:



	Years Ended December 31,
	2011		2010		2009
Statutory federal rate	35.0	%	35.0	%	35.0	%
State and local income taxes, net of federal income tax effect	3.7		3.5		1.9
Other	(0.3	)	(0.9	)	0.3
Effective rate	38.4	%	37.6	%	37.2	%

The effective tax rate for 2011 was negatively impacted by a decrease in unrecognized income tax benefits compared to 2010, the divestiture of certain Orchid paternity contracts, and foreign losses not tax effected. The effective tax rate for 2010 was favorably impacted by a benefit relating to the net decrease in unrecognized income tax benefits. In 2009, the Company recorded favorable adjustments of $21.5 to its tax provision relating to the resolution of certain state tax issues under audit, as well as the realization of foreign tax credits.

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities are as follows:



	December 31, 2011			December 31, 2010
Deferred tax assets:
Accounts receivable	$	27.1		$	2.6
Employee compensation and benefits	123.9			96.3
Self insurance reserves	20.7			27.1
Postretirement benefit obligation	20.5			16.3
Acquisition and restructuring reserves	18.8			10.2
Tax loss carryforwards	68.5			50.1
	279.5			202.6
Less: valuation allowance	(14.4		)	(11.4		)
Net deferred tax assets	$	265.1		$	191.2

Deferred tax liabilities:
Deferred earnings	$	(25.3	)	$	(18.0	)
Intangible assets	(373.7		)	(343.8		)
Property, plant and equipment	(71.5		)	(63.3		)
Zero-coupon subordinated notes	(105.5		)	(145.2		)
Currency translation adjustment	(90.1		)	(94.3		)
Other	(3.6		)	(5.1		)
Total gross deferred tax liabilities	$	(669.7	)	$	(669.7	)
Net deferred tax liabilities	$	(404.6	)	$	(478.5	)

The Company has state tax loss carryovers of approximately $0.3, which expire in 2011 through 2024. The state tax loss carryovers have a full valuation allowance. The Company has foreign tax loss carryovers of $10.8 with a full valuation allowance. Most of the foreign losses have an indefinite carryover. In addition, the Company has federal tax loss carryovers of approximately $57.4 expiring periodically through 2030. The utilization of the tax loss carryovers is limited due to change of ownership rules. However, at this time the Company expects to fully utilize substantially all federal tax loss carryovers.

The gross unrecognized income tax benefits were $52.7 and $53.6 at December 31, 2011 and 2010, respectively. It is anticipated that the amount of the unrecognized income tax benefits will change within the next twelve months; however, these changes are not expected to have a significant impact on the results of operations, cash flows or the financial position of the Company.

The Company recognizes interest and penalties related to unrecognized income tax benefits in income tax expense. Accrued interest and penalties related to uncertain tax positions totaled $10.8 and $12.2 as of December 31, 2011 and 2010, respectively. During the years ended December 31, 2011, 2010 and 2009, the Company recognized $3.5, $4.5 and $5.4, respectively, in interest and penalties expense, which was offset by a benefit of $4.9, $5.4 and $4.9, respectively.

The following table shows a reconciliation of the unrecognized income tax benefits from uncertain tax positions for the years ended December 31, 2011, 2010 and 2009:



	2011		2010		2009
Balance as of January 1	53.6		59.0		72.5
Increase in reserve for tax positions taken in the current year	8.6		9.1		10.9
Increase (decrease) in reserve for tax positions taken in a prior period	—		(0.6	)	(4.2	)
Decrease in reserve as a result of settlements reached with tax authorities	(0.2	)	(1.3	)	(15.7	)
Decrease in reserve as a result of lapses in the statute of limitations	(9.3	)	(12.6	)	(4.5	)
Balance as of December 31	52.7		53.6		59.0

As of December 31, 2011 and 2010, $53.3 and $54.6, respectively, is the approximate amount of unrecognized income tax benefits that, if recognized, would favorably affect the effective income tax rate in any future periods.

The Company has substantially concluded all U.S. federal income tax matters for years through 2007. Substantially all material state and local, and foreign income tax matters have been concluded through 2006 and 2001, respectively.

The Company has various state income tax examinations ongoing throughout the year. Canada Revenue Agency is conducting an audit of the 2009 and 2010 Canadian income tax return. The Company believes adequate provisions have been recorded related to all open tax years.

The Company provided for taxes on substantially all undistributed earnings of foreign subsidiaries.