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INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2013

MILLIONS	2013		2012		2011


United States	$	725.8	$	594.8	$	440.0
International	572.5		417.8		239.6
Total	$	1,298.3	$	1,012.6	$	679.6

Provision for income taxes

MILLIONS	2013		2012		2011


Federal and state	$	301.3	$	141.3	$	104.9
International	153.8		173.2		69.7
Total current	455.1		314.5		174.6
Federal and state	(124.0)		31.7		25.2
International	(6.5)		(34.9)		16.5
Total deferred	(130.5)		(3.2)		41.7
Provision for income taxes	$	324.7	$	311.3	$	216.3

Net deferred tax assets and deferred tax liabilities

DECEMBER 31 (MILLIONS)	2013		2012


Deferred tax assets
Other accrued liabilities	$	125.9	$	136.1
Loss carryforwards	106.3		110.4
Share-based compensation	70.1		71.6
Pension and other comprehensive income	160.9		337.8
Foreign tax credits	29.9		47.6
Other, net	150.0		138.9
Valuation allowance	(88.3)		(116.5		)
Total	554.8		725.9
Deferred tax liabilities
Property, plant and equipment basis differences	287.3		246.8
Intangible assets	1,488.0		1,218.0
Unremitted foreign earnings	94.5		68.3
Other, net	132.0		114.2
Total	2,001.8		1,647.3
Net deferred tax liabilities balance	$	(1,447.0)	$	(921.4	)

Reconciliation of the statutory U.S. federal income tax rate to the company's effective income tax rate

	2013	2012	2011
Statutory U.S. rate	35.0%	35.0%	35.0%
State income taxes, net of federal benefit	1.1	1.1	2.0
Foreign operations	(4.5)	(3.0)	(3.2)
Domestic manufacturing deduction	(2.6)	(2.6)	(2.9)
R&D credit	(1.4)	—	(0.3)
Change in valuation allowance	(1.0)	—	1.2
Nondeductible deal costs	0.2	0.5	0.8
Audit settlements and refunds	(0.8)	0.1	(0.5)
Other, net	(1.0)	(0.4)	(0.3)
Effective income tax rate	25.0%	30.7%	31.8%

Reconciliation of the beginning and ending amount of gross liability for unrecognized tax benefits

MILLIONS	2013		2012		2011
Balance at beginning of year	$	93.1	$	89.5	$	66.2
Additions based on tax positions related to the current year	9.1		7.5		7.3
Additions for tax positions of prior years	6.1		5.0		1.4
Reductions for tax positions of prior years	(15.6)		(3.4)		(27.0)
Reductions for tax positions due to statute of limitations	(3.6)		(0.8)		(0.8)
Settlements	(0.7)		(8.0)		(8.0)
Assumed in connection with the Champion acquisition	9.8		—		—
Assumed in connection with the Nalco merger	—		7.8		50.1
Foreign currency translation	0.5		(4.5)		0.3
Balance at end of year	$	98.7	$	93.1	$	89.5

- 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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