Income Taxes (Tables)

12 Months Ended

Dec. 31, 2013

Income (loss) before income taxes and noncontrolling interest consisted of the following:



	Years ended December 31
In millions	2013		2012			2011
Federal ⁽¹⁾	$	328.7	$	39.2		$	(31.5	)
International	397.7		(223.2		)	74.7
Income (loss) before income taxes and noncontrolling interest	$	726.4	$	(184.0	)	$	43.2


(1)	As a result of the Merger, “Federal” reflects income (loss) before income taxes and noncontrolling interest for Switzerland in 2013 and 2012 and for the U.S. in 2011.

The provision (benefit) for income taxes consisted of the following:



	Years ended December 31
In millions	2013		2012			2011
Currently payable
Federal ⁽¹⁾	$	17.4	$	6.5		$	51.2
State	—		—			7.0
International ⁽²⁾	111.2		61.0			23.9
Total current taxes	128.6		67.5			82.1
Deferred
Federal ⁽¹⁾	18.9		1.3			(26.2		)
International ⁽²⁾	36.3		(148.2		)	(9.5		)
Total deferred taxes	55.2		(146.9		)	(35.7		)
Total provision (benefit) for income taxes	$	183.8	$	(79.4	)	$	46.4


(1)	As a result of the Merger, “Federal” represents Swiss taxes for 2013 and 2012 and U.S. taxes for 2011.


(2)	As a result of the Merger, "International" represents non-Swiss taxes for 2013 and 2012 and non-U.S. taxes for 2011

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



	Years ended December 31
Percentages	2013	2012		2011
Federal statutory income tax rate ⁽¹⁾	7.8	7.8		35.0
Tax effect of international operations ⁽²⁾	10.5	23.6		(25.3	)
Change in valuation allowances	5.5	—		—
Withholding taxes	1.0	—		—
Interest limitations	0.5	—		—
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	)
State income taxes, net of federal tax benefit	—	—		4.3
All other, net	—	—		(2.7	)
Effective tax rate	25.3	43.1		107.3


(1)	As a result of the Merger, the statutory rate for 2013 and 2012 reflects the Swiss statutory rate of 7.8 percent. For 2011, 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 2013 and 2012 consists of non-Swiss jurisdictions. For 2011, the tax effect of international operations consists of non-U.S. jurisdictions.

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



	Years ended December 31
In millions	2013			2012			2011
Beginning balance	$	53.4		$	26.5		$	24.3
Gross increases for tax positions in prior periods	12.2			2.2			2.1
Gross decreases for tax positions in prior periods	(0.6		)	(0.6		)	(0.2		)
Gross increases based on tax positions related to the current year	2.7			13.6			3.2
Gross decreases related to settlements with taxing authorities	(5.1		)	(13.2		)	(2.5		)
Reductions due to statute expiration	(1.8		)	(0.4		)	(0.4		)
Gross increases due to acquisitions	—			25.3			—
Ending balance	$	60.8		$	53.4		$	26.5

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



	December 31
In millions	2013		2012
Other current assets	$	162.0	$	82.6
Other non-current assets	93.6		68.7
Deferred tax liabilities	580.6		421.9
Net deferred tax liabilities	$	325.0	$	270.6

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



	December 31
In millions	2013		2012
Deferred tax assets
Accrued liabilities and reserves	$	194.8	$	172.8
Pension and other post-retirement benefits	77.3		73.7
Employee compensation & benefits	84.4		94.5
Tax loss and credit carryforwards	355.0		377.8
Other	—		9.4
Total deferred tax assets	711.5		728.2
Valuation allowance	237.4		174.4
Deferred tax assets, net of valuation allowance	474.1		553.8
Deferred tax liabilities
Property, plant and equipment	60.4		80.3
Goodwill and other intangibles	708.8		744.1
Other liabilities	29.9		—
Total deferred tax liabilities	799.1		824.4
Net deferred tax liabilities	$	325.0	$	270.6