10.	Income Taxes

The components of income before taxes are as follows:

	2015		2014		2013
Domestic	$	595.6	$	574.1	$	544.5
Foreign		39.8		50.8		53.3
Total	$	635.4	$	624.9	$	597.8

The following table summarizes the provision for U.S. federal, state and foreign income taxes:

	2015			2014		2013
Current:
U.S. federal	$	161.4		$	159.0	$	151.7
State		25.5			24.4		24.7
Foreign		14.1			14.9		15.9
		201.0			198.3		192.3
Deferred:
U.S. federal		22.8			11.5		12.6
State		3.3			1.1		(1.7	)
Foreign		(2.1	)		0.1		0.2
		24.0			12.7		11.1
Total provision	$	225.0		$	211.0	$	203.4

Deferred tax assets (liabilities) consist of the following at December 31:

	2015			2014
Deferred tax assets:
Accounts receivable	$	4.6		$	4.6
Deferred compensation		67.9			63.6
Pension, postretirement and postemployment benefits		8.7			9.9
Investment in Natronx		7.7			1.2
Other		24.4			26.0
Tax credit carryforwards/other tax attributes		14.4			1.9
International operating loss carryforwards		6.2			8.0
Total gross deferred tax assets		133.9			115.2
Valuation allowances		(16.3	)		(12.0	)
Total deferred tax assets		117.6			103.2
Deferred tax liabilities:
Goodwill		(193.5	)		(174.7	)
Trade names and other intangibles		(312.4	)		(300.6	)
Property, plant and equipment		(95.6	)		(97.5	)
Total deferred tax liabilities		(601.5	)		(572.8	)
Net deferred tax liability	$	(483.9	)	$	(469.6	)
Long term net deferred tax asset ⁽¹⁾		0.9			1.0
Long term net deferred tax liability ⁽¹⁾		(484.8	)		(470.6	)
Net deferred tax liability	$	(483.9	)	$	(469.6	)

⁽¹⁾	The Company retrospectively adopted new accounting guidance requiring all deferred tax assets to be classified as noncurrent. See Note 1 for further details.

The difference between tax expense and the tax that would result from the application of the federal statutory rate is as follows:

	2015			2014			2013
Statutory rate		35	%		35	%		35	%
Tax that would result from use of the federal statutory rate	$	222.4		$	218.7		$	209.2
State and local income tax, net of federal effect		18.7			16.5			14.9
Varying tax rates of foreign affiliates		(2.6	)		(3.6	)		(3.1	)
Benefit from domestic manufacturing deduction		(14.4	)		(14.3	)		(13.2	)
Resolution of tax contingencies		0.0			(1.5	)		0.0
Valuation Allowances		8.5			0.9			0.6
Other		(7.6	)		(5.7	)		(5.0	)
Recorded tax expense	$	225.0		$	211.0		$	203.4
Effective tax rate		35.4	%		33.8	%		34.0	%

At December 31, 2015, certain foreign subsidiaries of the Company had net operating loss carryforwards of approximately $20.4. Approximately $1.0 of such net operating loss carryforwards expire on various dates through December 31, 2018. The remaining net operating loss carryforwards are not subject to expiration.

The Company believes that it is more likely than not that the benefit from these net operating loss carryforwards will not be realized. In recognition of this risk, the Company has provided a valuation allowance of $6.2 and $8.0 at December 31, 2015 and 2014, respectively, on the deferred tax asset relating to these net operating loss carryforwards.

The Company also believes that it is more likely than not that the benefit from certain additional deferred tax assets of a foreign subsidiary will not be realized. In recognition of this risk, the Company maintains a valuation allowance of $2.4 and $4.0 at December 31, 2015 and 2014, respectively, on these deferred tax assets.

In 2015, the Company reported an impairment charge relating to its investment in Natronx. The Company believes that it is more likely than not that a tax benefit relating to the impairment will not be realized. In recognition of this risk, the Company established a valuation allowance of $7.7 in 2015.

In 2015, the Company liquidated its subsidiary in the Netherlands and decided that the earnings of its subsidiary in France would no longer be permanently reinvested outside of the U.S. As a result, the Company repatriated cash of $93.0. The funds repatriated were used to reduce outstanding commercial paper. As a result of liquidating its subsidiary in the Netherlands, the Company recorded a tax benefit of $2.7 in the Consolidated Statement of Income and a deferred tax benefit of $11.6 through Accumulated Other Comprehensive Income. As of December 31, 2015, there remains $135.7 of undistributed earnings of foreign subsidiaries which are considered to be permanently reinvested for which U.S. deferred taxes have not been provided. It is not practicable to determine the deferred tax liability on these earnings because of the large number of assumptions necessary to compute the tax.

In prior years, the Company has recorded liabilities in connection with uncertain tax positions, which, although supportable by the Company, may be challenged by tax authorities. Under applicable accounting guidance, these tax positions do not meet the minimum threshold required for the related tax benefit to be recognized in the income statement. The Company has no uncertain tax positions or unrecognized tax benefits at December 31, 2015.

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

	2015			2014			2013
Unrecognized tax benefits at January 1	$	4.0		$	5.9		$	9.1
Gross increases - tax positions in prior period		0.0			0.0			0.9
Gross decreases - tax positions in prior period		(3.7	)		(1.5	)		0.0
Settlements		0.0			0.0			(3.7	)
Lapse of statute of limitations		(0.3	)		(0.4	)		(0.4	)
Unrecognized tax benefits at December 31	$	0.0		$	4.0		$	5.9

In 2014, the Company recognized a benefit from the reversal of approximately $1.7 in income tax expense and $0.1 in interest expense associated with certain tax liabilities as the result of the settlement of an IRS audit for the years 2010, 2011 and 2012 and the lapse of applicable statutes of limitation of several state taxing authorities.

The Company is subject to U.S. federal income tax as well as income tax in multiple state and international jurisdictions. The IRS has completed its audit of tax years through 2012. The Company is currently under audit by several state and international taxing authorities for the years 2011 through 2014. The Company does not anticipate that the settlement of audits within the next twelve months will result in a significant change in unrecognized tax benefits.

The Company’s policy for recording interest associated with uncertain tax positions is to record interest as a component of income before income taxes. During the twelve months ended December 31, 2015, December 31, 2014 and December 31, 2013, the Company recognized a net reversal of accrued interest expense associated with uncertain tax positions of approximately $0.2, $0.1, and $0.1, respectively. As of December 31, 2015, the Company had no accrued interest expense relating to unrecognized tax benefits. As of December 31, 2014, the Company had $0.2 in accrued interest expense related to unrecognized tax benefits.