Income Taxes

Deferred tax assets (liabilities) resulting from temporary differences in the recognition of income and expense for tax and financial reporting purposes at December 31 consisted of the following:



	2011			2010
Deferred tax assets:
Accrued expenses and reserves	$	261.5		$	279.7
Pension and postretirement benefits	166.0			155.4
Asset revaluations	39.5			51.6
Capitalized expenses	105.8			77.9
Intangible assets	74.7			—
Share-based compensation	54.9			55.3
Restructuring initiatives	18.0			39.7
Postemployment benefits	18.4			22.9
Tax loss carryforwards	576.8			465.4
Foreign tax credit carryforwards	282.1			178.8
Minimum tax and business credit carryforwards	47.0			42.6
All other	66.0			89.8
Valuation allowance	(546.1		)	(462.7		)
Total deferred tax assets	1,164.6			996.4
Deferred tax liabilities:
Depreciation and amortization	(48.6		)	(47.3		)
Unremitted foreign earnings	(39.2		)	(35.2		)
Prepaid expenses	(7.9		)	(7.8		)
Capitalized interest	(10.1		)	(10.4		)
All other	(24.1		)	(37.4		)
Total deferred tax liabilities	(129.9		)	(138.1		)
Net deferred tax assets	$	1,034.7		$	858.3

Deferred tax assets (liabilities) at December 31 were classified as follows:



	2011			2010
Deferred tax assets:
Prepaid expenses and other	$	319.0		$	347.4
Other assets	759.5			544.3
Total deferred tax assets	1,078.5			891.7
Deferred tax liabilities:
Income taxes	(19.3		)	(3.4		)
Long-term income taxes	(24.5		)	(30.0		)
Total deferred tax liabilities	(43.8		)	(33.4		)
Net deferred tax assets	$	1,034.7		$	858.3

The valuation allowance primarily represents amounts for foreign tax loss carryforwards. The basis used for recognition of deferred tax assets included the profitability of the operations, related deferred tax liabilities and the likelihood of utilizing tax credit carryforwards during the carryover periods. The net increase in the valuation allowance of $83.4 during 2011 was mainly due to several of our foreign entities continuing to incur losses during 2011, thereby increasing the tax loss carryforwards for which a valuation allowance was provided.

Income from continuing operations, before taxes for the years ended December 31 was as follows:



	2011			2010			2009
United States	$	(395.1	)	$	(228.7	)	$	(156.0	)
Foreign	1,137.7			1,174.1			1,069.7
Total	$	742.6		$	945.4		$	913.7

The provision for income taxes for the years ended December 31 was as follows:



	2011			2010			2009
Federal:
Current	$	(91.6	)	$	(20.8	)	$	(17.5	)
Deferred	(43.3		)	(56.3		)	(42.1		)
	(134.9		)	(77.1		)	(59.6		)
Foreign:
Current	505.9			470.5			476.2
Deferred	(146.2		)	(38.5		)	(121.4		)
	359.7			432.0			354.8
State and other:
Current	(1.5		)	3.6			2.1
Deferred	(7.1		)	(8.3		)	(2.8		)
	(8.6		)	(4.7		)	(0.7		)
Total	$	216.2		$	350.2		$	294.5

The effective tax rate for the years ended December 31 was as follows:



	2011		2010		2009
Statutory federal rate	35.0	%	35.0	%	35.0	%
State and local taxes, net of federal tax benefit	(.4	)	(.3	)	.2
Taxes on foreign income, including translation	(2.9	)	(2.1	)	(4.9	)
Audit settlements, statute expirations and amended returns	(4.3	)	(2.5	)	(.7	)
Net change in valuation allowances	.1		(.2	)	3.4
Venezuela devaluation and highly inflationary accounting	—		6.0		—
Other	1.6		1.1		(.8	)
Effective tax rate	29.1	%	37.0	%	32.2	%

At December 31, 2011, we had tax loss carryforwards of $1,972.5. The loss carryforwards expiring between 2012 and 2026 are $130.8 and the loss carryforwards which do not expire are $1,841.7. We also had minimum tax credit carryforwards of $35.9 which do not expire, business credit carryforwards of $11.1 that will expire between 2020 and 2031, and foreign tax credit carryforwards of $282.1 that will expire between 2018 and 2021.

Uncertain Tax Positions

At December 31, 2011, we had $36.0 of total gross unrecognized tax benefits of which approximately $33 would impact the effective tax rate, if recognized.

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:




Balance at December 31, 2008	$	104.3
Additions based on tax positions related to the current year	16.8
Additions for tax positions of prior years	9.7
Reductions for tax positions of prior years	(5.8		)
Reductions due to lapse of statute of limitations	(2.9		)
Reductions due to settlements with tax authorities	(8.7		)

Balance at December 31, 2009	113.4
Additions based on tax positions related to the current year	7.5
Additions for tax positions of prior years	6.4
Reductions for tax positions of prior years	(14.4		)
Reductions due to lapse of statute of limitations	(5.3		)
Reductions due to settlements with tax authorities	(23.3		)

Balance at December 31, 2010	84.3
Additions based on tax positions related to the current year	1.2
Additions for tax positions of prior years	9.3
Reductions for tax positions of prior years	(20.0		)
Reductions due to lapse of statute of limitations	(6.7		)
Reductions due to settlements with tax authorities	(32.1		)

Balance at December 31, 2011	$	36.0

We recognize interest and penalties accrued related to unrecognized tax benefits in the provision for income taxes. We had $12.9 at December 31, 2011, and $20.1 at December 31, 2010, accrued for interest and penalties, net of tax benefit. We recorded a benefit of $3.8 during 2011, a benefit of $4.5 during 2010 and an expense of $1.6 during 2009 for interest and penalties, net of taxes.

We file income tax returns in the U.S. federal jurisdiction, and various states and foreign jurisdictions. As of December 31, 2011, the tax years that remained subject to examination by major tax jurisdiction for our most significant subsidiaries were as follows:




Jurisdiction		Open Years
Brazil		2006-2011
China		2006-2011
Mexico		2004, 2006-2011
Poland		2006-2011
Russia		2009-2011
United States		2010-2011

We anticipate that it is reasonably possible that the total amount of unrecognized tax benefits could decrease in the range of $10 to $15 within the next 12 months due to the closure of tax years by expiration of the statute of limitations and audit settlements.