Income Taxes (Tables)

12 Months Ended

Dec. 31, 2012

Income from Continuing Operations Before Income Taxes and Noncontrolling Interest

Income from continuing operations before income taxes and noncontrolling interest consisted of the following:



	Years ended December 31
In thousands	2012			2011			2010
Federal ⁽¹⁾	$	39,177		$	(31,471	)	$	196,101
International	(223,142		)	74,737			82,874
Income (loss) from continuing operations before income taxes and noncontrolling interest	$	(183,965	)	$	43,266		$	278,975


(1)	As a result of the Merger, “Federal” reflects income (loss) from continuing operations before income taxes and noncontrolling interest for Switzerland in 2012 and U.S. for 2011 and 2010.

Provision for Income Taxes

The provision (benefit) for income taxes consisted of the following: For 2012, Federal represents Swiss taxes, while International represents non-Swiss taxes, including U.S. federal, state and local taxes. For 2011 and 2010 Federal represents U.S. federal taxes, while International reflects non-U.S. taxes.



	Years ended December 31
In thousands	2012			2011			2010
Currently payable
Federal	$	6,490		$	51,158		$	44,766
State	—			6,980			6,591
International	61,053			24,005			17,877
Total current taxes	67,543			82,143			69,234
Deferred
Federal	1,270			(26,223		)	18,188
International	(148,166		)	(9,503		)	1,521
Total deferred taxes	(146,896		)	(35,726		)	19,709
Total provision (benefit) for income taxes	$	(79,353	)	$	46,417		$	88,943

Reconciliation of Federal Statutory Income Tax Rate to Effective Tax Rate

Reconciliations of the federal statutory income tax rate to our effective tax rate were as follows:



	Years ended December 31
Percentages	2012		2011		2010
Federal statutory income tax rate ⁽¹⁾	7.8		35.0		35.0
Tax effect of international operations ⁽²⁾	23.6		(25.3	)	(4.1	)
Non-deductible transaction costs	(4.7	)	—		—
Impact of debt-financing	10.8		—		—
Resolution of tax audits	5.6		—		—
Goodwill	—		104.4		—
Domestic manufacturing deduction	—		(8.4	)	(1.5	)
State income taxes, net of federal tax benefit	—		4.3		2.0
All other, net	—		(2.7	)	0.5
Effective tax rate	43.1		107.3		31.9


(1)	As a result of the Merger, the statutory rate for 2012 reflects the Swiss statutory rate of 7.83 percent. For 2011 and 2010, the statutory rate reflects the U.S. statutory rate of 35 percent.


(2)	As a result of the Merger, the tax effect of international operations for 2012 consists of non-Swiss jurisdictions. For 2011 and 2010, the tax effect of international operations consists of non-U.S. jurisdictions.

Reconciliations of Gross Unrecognized Tax Benefits

Reconciliations of the beginning and ending gross unrecognized tax benefits were as follows:



	Years ended December 31
In thousands	2012			2011			2010
Beginning balance	$	26,469		$	24,260		$	29,962
Gross increases for tax positions in prior periods	2,198			2,042			286
Gross decreases for tax positions in prior periods	(641		)	(192		)	(2,490		)
Gross increases based on tax positions related to the current year	13,641			3,201			1,431
Gross decreases related to settlements with taxing authorities	(13,202		)	(2,465		)	(4,182		)
Reductions due to statute expiration	(370		)	(377		)	(747		)
Gross increases due to acquisitions	25,311			—			—
Ending balance	$	53,406		$	26,469		$	24,260

Deferred Taxes

Deferred taxes were recorded in the Consolidated Balance Sheets as follows:



	December 31
In thousands	2012		2011
Other current assets	$	82,614	$	60,899
Other non-current assets	68,655		—
Deferred tax liabilities	421,898		188,957
Net deferred tax liabilities	$	270,629	$	128,058

Tax Effects of Major Items Recorded as Deferred Tax Assets and Liabilities

The tax effects of the major items recorded as deferred tax assets and liabilities were as follows:



	December 31
In thousands	2012		2011
Deferred tax assets
Accrued liabilities and reserves	$	172,793	$	58,420
Postretirement benefits	73,660		82,823
Employee compensation & benefits	94,521		49,404
Tax loss and credit carryforwards	377,795		24,350
Other	9,433		4,698
Total deferred tax assets	728,202		219,695
Valuation allowance ⁽¹⁾	174,445		13,242
Deferred tax assets, net of valuation allowance	553,757		206,453
Deferred tax liabilities
Property, plant and equipment	80,329		43,572
Goodwill and other intangibles	744,057		290,939
Total deferred tax liabilities	824,386		334,511
Net deferred tax liabilities	$	270,629	$	128,058


(1)	The increase in valuation allowance from 2011 to 2012 was primarily related to balances acquired in the Merger.