INCOME TAX

12 Months Ended

Dec. 31, 2011

INCOME TAX

NOTE 5—INCOME TAXES

The U.S. and International components of income before income taxes consisted of the following for the years ended December 31, 2011, 2010 and 2009:

In thousands
	2011		2010		2009
United States	$	307,909	$	273,891	$	229,343
International		64,415		57,962		48,345
Total income before income taxes	$	372,324	$	331,853	$	277,688

Significant components of our income tax expense for the years ended December 31, 2011, 2010 and 2009 are as follows:

In thousands
	2011		2010		2009
Current
United States—federal	$	99,481	$	72,733	$	60,493
United States—state and local		10,205		9,356		8,938
International		11,906		15,864		9,895
		121,592		97,953		79,326
Deferred
United States—federal		7,690		19,834		16,046
United States—state and local		2,589		3,254		2,636
International		3,110		355		3,291
		13,389		23,443		21,973
Total provision	$	134,981	$	121,396	$	101,299

A reconciliation of the income tax provision computed at the federal statutory rate to the effective tax rate for the years ended December 31, 2011, 2010 and 2009 are as follows:

	2011			2010			2009
Federal statutory income tax rate		35.0	%		35.0	%		35.0	%
Effect of:
State and local taxes, net of federal tax effect		2.2	%		2.5	%		2.7	%
Other		(0.9	)%		(0.9	)%		(1.2	)%
Effective tax rate		36.3	%		36.6	%		36.5	%

Cash payments for income taxes were $74.4 million, $76.6 million and $66.5 million for the years ended December 31, 2011, 2010 and 2009, respectively.

Our deferred tax liabilities and assets as of December 31, 2011 and 2010 were as follows:

In thousands
	2011			2010
Deferred tax liabilities:
Property, plant and equipment	$	(34,699	)	$	(22,799	)
Goodwill and intangibles		(318,624	)		(234,846	)
Total deferred tax liabilities		(353,323	)		(257,645	)
Deferred tax assets:
Accrued liabilities		22,124			17,734
Other		22,296			16,987
Net operating tax loss carry forwards		18,259			29,074
Less: operating tax loss valuation allowance		(3,775	)		(11,973	)
Total deferred tax assets		58,904			51,822
Net deferred tax liabilities	$	(294,419	)	$	(205,823	)

At December 31, 2011, net operating loss carry forwards for U.S. federal and state income tax purposes have been fully utilized, excluding net operating loss carry forwards related to our acquisitions. The remaining net operating loss carry forwards from foreign and domestic acquisitions are approximately $38.9 million that begin to expire in 2015. Of these, $3.4 million have a valuation allowance offsetting the benefit. The valuation allowance primarily represents loss carry-forwards for which limitations are in place and utilization is uncertain before their expiration. Changes in our valuation allowance during 2011 were primarily related to adjustments to acquisition accounting.

Undistributed earnings of foreign subsidiaries are considered permanently reinvested, and therefore no deferred taxes are recorded thereon. The cumulative amounts of such earnings are $707.0 million at December 31, 2011, and it was not practicable to estimate the amount of tax that may be payable upon distribution assuming repatriation.

We and our subsidiaries file U.S. federal income tax returns and income tax returns in various states and foreign jurisdictions. With a few exceptions, we are no longer subject to U.S. federal, state, local, or non-U.S. income tax examinations by tax authorities for years before 2006.

The Company has recorded accruals to cover certain uncertain tax positions. Such uncertain tax positions relate to additional taxes that the Company may be required to pay in various tax jurisdictions. During the course of examinations by various taxing authorities, proposed adjustments may be asserted. The Company evaluates such items on a case-by-case basis and adjusts the accrual for uncertain tax positions as deemed necessary. The estimated amount of liability associated with the Company’s uncertain tax positions that may change within the next twelve months cannot be reasonably estimated.

The total amount of unrecognized tax positions as of December 31, 2011 is $10.7 million. The amount of unrecognized tax positions that, if recognized, would affect the effective tax rate is approximately $10.7 million. We recognized interest and penalties accrued related to income tax reserves in the amount of $0.7 million and $0.1 million, for the years ended December 31, 2011 and 2010, respectively, as a component of income tax expense.

The following table summarizes the changes in unrecognized tax positions during the years ended December 31, 2011 and 2010:

In thousands
Unrecognized tax positions, December 31, 2009	$	7,622
Gross increases—tax positions in prior period		828
Gross decreases—tax positions in prior period		(21	)
Gross increases—current period tax positions		1,863
Settlement		0
Lapse of statute of limitations		(1,160	)
Unrecognized tax positions, December 31, 2010	$	9,132
Gross increases—tax positions in prior period		242
Gross decreases—tax positions in prior period		0
Gross increases—current period tax positions		2,609
Settlement		(108	)
Lapse of statute of limitations		(1,210	)
Unrecognized tax positions, December 31, 2011	$	10,665