Income Taxes

The consolidated income tax provision includes taxes attributable to the controlling interest and, to a lesser extent, taxes attributable to non-controlling interests as follows:



	For the Years Ended December 31,
	2011			2012			2013
Controlling Interests:
Current tax	$	45.0		$	61.0		$	153.1
Intangible related deferred taxes	43.2			22.7			38.1
Other deferred taxes	(4.0		)	(12.1		)	(6.2		)
Total controlling interests	84.2			71.6			185.0
Non-controlling Interests:
Current tax	$	12.9		$	11.7		$	13.3
Deferred taxes	(4.0		)	0.5			(4.2		)
Total non-controlling interests	8.9			12.2			9.1
Provision for income taxes	$	93.1		$	83.8		$	194.1
Income before income taxes (controlling interest)	$	249.1		$	245.6		$	545.5
Effective tax rate attributable to controlling interests⁽¹⁾	33.8		%	29.2		%	33.9		%

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(1)	Taxes attributable to the controlling interest divided by Income before income taxes (controlling interest).

A summary of the consolidated provision for income taxes is as follows:



	For the Years Ended December 31,
	2011			2012			2013
Current:
Federal	$	6.2		$	14.5		$	104.1
State	11.2			14.2			21.1
Foreign	40.5			44.0			41.2
Total current	57.9			72.7			166.4
Deferred:
Federal	46.8			19.8			38.1
State	5.0			4.6			8.9
Foreign	(16.6		)	(13.3		)	(19.3		)
Total deferred	35.2			11.1			27.7
Provision for income taxes	$	93.1		$	83.8		$	194.1

The components of income before income taxes consisted of the following:



	For the Years Ended December 31,
	2011		2012		2013
Domestic	$	243.8	$	238.6	$	604.0
International	208.9		256.6		259.7
	$	452.7	$	495.2	$	863.7

The Company's effective income tax rate differs from the amount computed by using income before income taxes and applying the U.S. federal income tax rate because of the effect of the following items:



	For the Years Ended December 31,
	2011		2012		2013
Tax at U.S. federal income tax rate	35.0	%	35.0	%	35.0	%
State income taxes, net of federal benefit	1.4		3.5		2.8
Non-deductible expenses	0.5		0.7		0.3
Valuation allowance	(0.1	)	(4.7	)	(0.3	)
Effect of foreign operations	—		(2.9	)	(2.3	)
Foreign basis differences	(0.9	)	(0.4	)	(0.2	)
Effect of changes in tax law, rates	(2.1	)	(2.0	)	(1.4	)
Effect of income from non-controlling interests	(13.2	)	(12.2	)	(11.4	)
	20.6	%	17.0	%	22.5	%

In 2012 and 2013, the Company reduced its valuation allowance $11.5 million and $1.6 million, respectively, for foreign tax credit carryforwards and benefits of uncertain tax positions from improved projections of taxes in the U.S. During 2011, 2012 and 2013, the Company also realized a deferred tax benefit of $7.6 million, $7.3 million, and $11.2 million, respectively, from the re-valuation of its deferred taxes from a change in enacted tax rates in the United Kingdom. Excluding the non-controlling interest tax benefits, the changes decreased the effective tax rate of the controlling interest 2.1%, 2.0% and 1.4% in 2011, 2012 and 2013, respectively.

The Company does not provide for deferred taxes on the excess of the financial reporting basis over the tax basis in its investments in foreign subsidiaries that are permanent in duration. This amount becomes taxable upon a repatriation of assets from a sale or liquidation of the subsidiary. As of December 31, 2013, the amount of such temporary difference was approximately $47.7 million. The deferred taxes not recognized at December 31, 2013 for this temporary difference are approximately $17.9 million.

The components of deferred tax assets and liabilities are as follows:



	December 31,
	2012			2013
Deferred Tax Assets
State net operating loss carryforwards	$	23.9		$	29.3
Deferred compensation	23.9			29.1
Foreign tax credit carryforwards	20.1			—
Tax benefit of uncertain tax positions	17.6			16.2
Accrued expenses	6.0			17.6
Foreign loss carryforwards	1.5			9.1
Total deferred tax assets	93.0			101.3
Valuation allowance	(21.3		)	(36.6		)
Deferred tax assets, net of valuation allowance	$	71.7		$	64.7
Deferred Tax Liabilities
Intangible asset amortization	$	(238.2	)	$	(241.3	)
Convertible securities interest	(189.2		)	(144.7		)
Non-deductible intangible amortization	(120.1		)	(101.5		)
Deferred revenue	(18.5		)	(32.1		)
Other	(2.8		)	(2.0		)
Total deferred tax liabilities	(568.8		)	(521.6		)
Net deferred tax liability	$	(497.1	)	$	(456.9	)

Deferred tax liabilities are primarily the result of tax deductions for the Company's intangible assets and convertible securities. The Company amortizes most of its intangible assets for tax purposes only, reducing its tax basis below its carrying value for financial statement purposes and generating deferred taxes each reporting period. The Company's convertible securities also generate deferred taxes because the Company's tax deductions are higher than the interest expense recorded for financial statement purposes.

At December 31, 2013, the Company has state net operating loss carryforwards which expire over a 15-year period beginning in 2014 and foreign loss carryforwards which expire over a five year period. At December 31, 2012 and December 31, 2013, the valuation allowance was principally related to the Company's projections of taxable income prior to the expiration of these carryforwards.

The Company carried a liability for uncertain tax positions of $21.2 million, $22.6 million and $20.4 million as of December 31, 2011, 2012 and 2013, respectively. These amounts included $1.6 million, $2.2 million and $1.7 million of interest and related charges, respectively. At December 31, 2011, 2012 and 2013, these liabilities also included $12.6 million, $19.4 million and $17.2 million, respectively, for tax positions that, if recognized, would affect the Company's effective tax rate.

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



	For the Years Ended December 31,
	2011			2012			2013
Balance, as of January 1	$	24.6		$	21.2		$	22.6
Additions based on current year tax positions	4.8			5.9			4.1
Additions based on prior years' tax positions	—			5.2			—
Reductions for prior years' tax provisions	—			(5.4		)	(0.1		)
Settlements	(1.2		)	—			—
Reductions related to lapses of statutes of limitations	(6.7		)	(4.6		)	(5.4		)
Additions (reductions) related to foreign exchange rates	(0.3		)	0.3			(0.8		)
Balance, as of December 31	$	21.2		$	22.6		$	20.4

During 2012, this liability decreased $5.4 million as a result of the recognition of tax benefits from the transfer of interests in an Affiliate. This decrease was offset by a $5.2 million provision for added foreign exposure for prior years. The Company does not anticipate that this liability will change significantly over the next twelve months.

The Company periodically has tax examinations in the U.S. and foreign jurisdictions. Examination outcomes, and any related settlements, are subject to significant uncertainty. The completion of examinations may result in the payment of additional taxes and/or the recognition of tax benefits. The Company is generally no longer subject to income tax examinations by any tax authorities for years before 2008.