Annual report pursuant to Section 13 and 15(d)

INCOME TAXES (Tables)

v2.4.0.6
INCOME TAXES (Tables)
 12 Months Ended
Dec. 31, 2011
Provision for Income Taxes from Continuing Operations

The provision for income taxes from continuing operations consisted of the following:

 

    Twelve Months Ended December 31,  
    2011     2010     2009  
    (In millions)  
Current:                        
 Federal   $ 113.3     $ 74.2     $ 65.8  
 State     10.5       8.2       6.9  
 Foreign     44.2       41.3       38.8  
      168.0       123.7       111.5  
Deferred:                        
 Federal     (1.5 )     15.3       (5.0 )
 State     0.5       (4.1 )     0.1  
 Foreign     1.0       (3.0 )     -  
      -       8.2       (4.9 )
Provision for income taxes   $ 168.0     $ 131.9     $ 106.6  
Domestic and Foreign Income from Continuing Operations before Income Taxes

Domestic and foreign income from continuing operations before income taxes was as follows:

 

    Twelve Months Ended December 31,  
    2011     2010     2009  
    (In millions)  
U.S.   $ 275.5     $ 203.3     $ 166.5  
Foreign     132.7       171.9       164.5  
    $ 408.2     $ 375.2     $ 331.0  
Provision for Income Taxes Reconciles with U.S. Federal Statutory Rate

The provision for income taxes reconciles with the U.S. federal statutory rate, as follows:

 

    Twelve Months Ended December 31,  
    2011     2010     2009  
    (In millions)  
Federal statutory rate     35.0 %     35.0 %     35.0 %
                         
Provision computed at federal statutory rate   $ 142.8     $ 131.3     $ 115.9  
State and local taxes, net of federal tax benefit     5.9       2.9       4.8  
Foreign     3.1       2.4       (3.2 )
Valuation Allowance(1)     (0.6 )     (3.2 )     (8.3 )
Tax reserves     (1.1 )     0.8       1.0  
Currency and other tax effects of Brazil transaction     20.5       -       -  
Other(2)     (2.6 )     (2.3 )     (3.6 )
Provision for income taxes   $ 168.0     $ 131.9     $ 106.6  
                         
Effective income tax rate     41.2 %     35.1 %     32.2 %

 

(1) During the fourth quarter of 2009, we recognized a $7.3 million income tax benefit related to our ability to utilize foreign tax credits beyond 2009. This reduced our 2009 effective tax rate by 2.1%.

 

(2) Includes the benefit related to an investment loss in a subsidiary recognized during the third quarter of 2009.
Components of Deferred Income Tax Assets and Liabilities

Components of the deferred income tax assets and liabilities at December 31, 2011 and 2010, were as follows:

 

    December 31,  
    2011     2010  
    (In millions)  
Deferred income tax assets:                
Employee pension benefits   $ 172.1     $ 138.6  
Net operating and capital loss carryforwards     102.0       104.0  
Foreign tax credits     53.8       55.2  
Employee compensation programs     49.4       43.8  
Reserves and accrued expenses     8.9       12.8  
Deferred revenue     8.7       5.8  
Other     5.8       8.8  
Gross deferred income tax assets     400.7       369.0  
Valuation allowance     (92.8 )     (87.2 )
Total deferred income tax assets, net   $ 307.9     $ 281.8  
                 
Deferred income tax liabilities:                
Goodwill and intangible assets     (322.1 )     (366.6 )
Pension expense     (122.1 )     (109.4 )
Undistributed earnings of foreign subsidiaries     (44.8 )     (27.4 )
Depreciation     (17.5 )     (6.4 )
Other     (21.1 )     (5.5 )
Total deferred income tax liability     (527.6 )     (515.3 )
Net deferred income tax liability   $ (219.7 )   $ (233.5 )
Deferred Income Tax Assets, Included in Other Current Assets, and Liabilities

Our deferred income tax assets, included in other current assets, and deferred income tax liabilities at December 31, 2011 and 2010, are included in the accompanying Consolidated Balance Sheets as follows:

 

    December 31,  
    2011     2010  
    (In millions)  
Current deferred income tax assets, included in other current assets   $ 8.1     $ 14.6  
Long-term deferred income tax liabilities     (227.8 )     (248.1 )
Net deferred income tax liability   $ (219.7 )   $ (233.5 )
Reconciliation of Beginning and Ending Amount of Unrecognized Tax Benefits

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

 

    2011     2010  
    (In millions)  
Beginning balance (January 1)   $ 20.5     $ 19.4  
Increases related to prior year tax positions     2.8       3.6  
Decreases related to prior year tax positions     (0.3 )     (0.5 )
Increases related to current year tax positions     3.3       2.7  
Decreases related to settlements     (3.9 )     (3.4 )
Expiration of the statute of limitations for the assessment of taxes     (2.0 )     (1.6 )
Currency translation adjustment     (0.5 )     0.3  
Ending balance (December 31)   $ 19.9     $ 20.5