Income Taxes (Tables)

12 Months Ended

Dec. 31, 2015

Summary of earnings from continuing operations

Earnings from continuing operations are summarized below:



(in millions)	2015			2014		2013
Earnings (loss) from continuing operations before income taxes:
Domestic	$	(91.5	)	$	32.6	$	90.1
Foreign	148.1			136.8		135.1
Total	$	56.6		$	169.4	$	225.2

Schedule of income tax expense (benefit) from continuing operations

Income tax expense (benefit) from continuing operations is summarized as follows:



(in millions)	2015			2014			2013
Current:
Federal and state	$	(0.9	)	$	(12.0	)	$	24.1
Foreign	30.1			26.8			25.4
Total current	$	29.2		$	14.8		$	49.5
Deferred:
Federal and state	$	(37.7	)	$	4.5		$	(15.2	)
Foreign	1.8			(10.7		)	1.8
Total deferred	$	(35.9	)	$	(6.2	)	$	(13.4	)
(Benefit) provision for taxes on earnings	$	(6.7	)	$	8.6		$	36.1

Reconciliation of the federal statutory income tax rate to the company's effective income tax rate for continuing operations

The federal statutory income tax rate is reconciled to the company’s effective income tax rate for continuing operations for the years ended December 31, 2015, 2014 and 2013 as follows:



	2015		2014		2013
Federal income tax at statutory rate	35.0	%	35.0	%	35.0	%
State income provision (benefit)	(7.3	)	(0.4	)	(0.5	)
Manufacturing & research incentives	(5.2	)	(2.7	)	(3.3	)
Taxes on foreign income which differ from the U.S. statutory rate	(34.2	)	(14.4	)	(9.3	)
Adjustments for unrecognized tax benefits	(2.7	)	(1.4	)	(5.4	)
Adjustments for valuation allowances	(31.2	)	26.8		(1.0	)
Capital loss generation	—		(45.7	)	—
Change in assertion over permanently reinvested foreign earnings	—		3.2		—
Business acquisitions & divestitures	14.1		—		—
Spin-off tax costs	13.3		—		—
Other items	6.4		4.7		0.5
Effective tax rate	(11.8	)%	5.1	%	16.0	%

Schedules of deferred tax assets (liabilities)

Temporary differences and carryforwards that give rise to deferred tax assets and liabilities include the following items:



(in millions)	2015			2014
Current deferred tax assets (liabilities):
Inventories	$	—		$	29.5
Accounts receivable	—			(5.6		)
Product warranty reserves	—			19.0
Product liability reserves	—			8.3
Deferred revenue, current portion	—			7.7
Deferred employee benefits	—			13.3
Other reserves and allowances	—			5.7
Less valuation allowance	—			(12.2		)
Net deferred tax assets, current	$	—		$	65.7
Non-current deferred tax assets (liabilities):
Inventories	37.6			—
Accounts receivable	(5.7		)	—
Property, plant and equipment	(13.6		)	(28.2		)
Intangible assets	(256.7		)	(281.8		)
Deferred employee benefits	92.9			87.7
Product warranty reserves	21.3			5.2
Product liability reserves	8.7			—
Tax credits	0.4			1.0
Loss carryforwards	157.7			199.0
Deferred revenue	11.2			4.0
Other	8.8			(0.7		)
Total non-current deferred tax liabilities	62.6			(13.8		)
Less valuation allowance	(137.0		)	(156.0		)
Net deferred tax liabilities, non-current	$	(74.4	)	$	(169.8	)

The net deferred tax assets (liabilities) are reflected in the Consolidated Balance Sheets for the years ended December 31, 2015 and December 31, 2014 as follows:



(in millions)	2015			2014
Current income tax asset	$	—		$	71.3
Long-term income tax assets, included in other non-current assets	15.0			16.4
Current deferred income tax liability, included in accounts payable and accrued expenses	—			(5.6		)
Long-term deferred income tax liability	(89.4		)	(186.2		)
Net deferred income tax liability	$	(74.4	)	$	(104.1	)

Schedule of open tax years for which the company could be subject to income tax examination

The company or one of its subsidiaries files income tax returns in the U.S. federal jurisdiction, and various state and foreign jurisdictions. The following table provides the open tax years for which the company could be subject to income tax examination by the tax authorities in its major jurisdictions:



Jurisdiction		Open Years
U.S. Federal		2012 — 2015
Wisconsin		2009 — 2015
China		2007 — 2015
France		2013 — 2015
Germany		2011 — 2015

Reconciliation of the beginning and ending amount of unrecognized tax benefits

A reconciliation of the beginning and ending amount of unrecognized tax benefits for the years ended December 31, 2015, 2014 and 2013 is as follows:



(in millions)	2015			2014			2013
Balance at beginning of year	$	33.3		$	35.9		$	47.3
Additions based on tax positions related to the current year	1.4			15.5			2.0
Additions for tax positions of prior years	0.2			0.1			3.7
Reductions for tax positions of prior years	—			(2.7		)	(8.1		)
Reductions based on settlements with taxing authorities	—			(7.3		)	(3.6		)
Reductions for lapse of statute	(3.1		)	(8.2		)	(5.4		)
Balance at end of year	$	31.8		$	33.3		$	35.9