part iI / item 8 Note 3 – Income Taxes Provision for Income Taxes The Company’s income (loss) from continuing operations before taxes is as follows: The Company’s provision (benefit) for income taxes from continu- ing operations consists of: A reconciliation of the statutory U.S. federal tax rate to the Compa- ny’s effective tax rate from continuing operations is as follows: The components of deferred tax assets and liabilities included on the Company’s Consolidated Balance Sheets are as follows: In 2012, 2011 and 2010, tax provision (benefit) of $(13.4) million, $(44.1) million, and $6.6 million, respectively, primarily related to changes in pension and post-retirement plan assets and benefit obligations, was recorded to accumulated other comprehensive income. In 2012, 2011 and 2010, income tax benefits attributable to equity- based compensation transactions exceeded amounts recorded at grant date fair market value and, accordingly, were credited to equity in the amounts of $3.6 million, $6.1 million and $3.3 mil- lion, respectively. The Company has not provided taxes on the undistributed earnings of its non-U.S. subsidiaries as of December 31, 2012 because it intends to permanently reinvest these earnings outside the U.S. As of December 31, 2012, the cumulative amount of non-U.S. earnings upon which taxes have not been provided is approximately $405 million. If these earnings were distributed in the form of dividends or otherwise, the Company would be subject to income and with- holding taxes. However, it is not practical to estimate the amount of tax payable upon the remittance of these earnings because such tax depends upon circumstances existing when the remittance occurs. Deferred Taxes and Valuation Allowances (in thousands) For year ended December 31, 2012 2011 2010 Current: U.S. federal tax $ 5,154 $ 1,124 $(3,099) U.S. state and local tax 1,948 1,928 1,173 Non-U.S. tax 26,314 32,816 26,560 Total current 33,416 35,868 24,634 Deferred: U.S. federal tax 52,948 (45,576) 26,326 U.S. state and local tax 1,068 524 238 Non-U.S. tax 984 1,129 4,889 Total deferred 55,000 (43,923) 31,453 Total provision (benefit) for income taxes $ 88,416 $ (8,055) $56,087 (in thousands) For year ended December 31, 2012 2011 2010 U.S. operations $ 175,055 $(121,411) $102,833 Non-U.S. operations 109,550 136,172 106,234 Total $284,605 $ 14,761 $209,067 (in thousands) For year ended December 31, 2012 2011 2010 Statutory U.S. federal tax rate 35.0 % 35.0 % 35.0 % Increase (reduction) from: Non-U.S. taxes (4.0)% (98.4)% (3.1)% Repatriation of non-U.S. earnings, net of credits 0.1 % 8.8 % 1.2 % Deferred taxes on earnings of non-U.S. subsidiaries — — (2.4)% State and local taxes, net of federal benefit 1.1 % 18.4 % 0.7 % U.S. research and development tax credit (0.3)% (15.3)% (3.0)% U.S. domestic manufacturing deduction (0.9)% (12.7)% (0.9)% Other 0.1 % 8.9 % (0.7)% Effective tax rate 31.1 % (55.3)% 26.8 % (in thousands) December 31, 2012 2011 Deferred tax assets: Asbestos-related liabilities $ 230,166 $ 260,969 Tax loss and credit carryforwards 77,098 93,337 Environmental reserves 12,614 20,042 Inventories 12,827 15,858 Accrued bonus and stock-based compensation 12,470 12,488 Pension and post-retirement benefits 66,313 50,623 Other 42,348 35,362 Total 453,836 488,679 Less: valuation allowance 115,014 107,511 Total deferred tax assets, net of valuation allowance 338,822 381,168 Deferred tax liabilities: Basis difference in fixed assets (30,130) (35,341) Basis difference in intangible assets (78,086) (75,127) Total deferred tax liabilities (108,216) (110,468) Net deferred tax asset $ 230,606 $ 270,700 Balance sheet classification: Current deferred tax assets 21,618 $ 46,664 Long-term deferred tax assets 245,843 265,849 Accrued liabilities (2) (145) Long-term deferred tax liability (36,853) (41,668) Net deferred tax asset $ 230,606 $ 270,700 43