Income taxes

12 Months Ended

Dec. 31, 2011

Income Tax Disclosure [Abstract]

Income taxes

Note 4 – Income Taxes

		Years Ended December 31,
(In millions)		2011	2010	2009
Income (loss) from continuing operations before income taxes
U.S.	$	(27.0)	(2.0)	37.0
Foreign		183.4	141.6	129.3
Income from continuing operations before income taxes	$	156.4	139.6	166.3

Income tax expense (benefit) from continuing operations
Current tax expense (benefit)
U.S. federal	$	3.0	4.3	(29.1)
State		(0.1)	0.2	(0.8)
Foreign		87.9	64.9	59.8
Current tax expense		90.8	69.4	29.9
Deferred tax expense (benefit)
U.S. federal		(21.3)	(7.8)	(72.3)
State		(1.0)	-	(8.1)
Foreign		(9.1)	5.5	(10.6)
Deferred tax benefit		(31.4)	(2.3)	(91.0)
Income tax expense (benefit) of continuing operations	$	59.4	67.1	(61.1)

		Years Ended December 31,
(In millions)		2011	2010	2009
Comprehensive provision (benefit) for income taxes allocable to
Continuing operations	$	59.4	67.1	(61.1)
Discontinued operations		0.7	(3.4)	2.3
Other comprehensive income (loss)		(74.4)	(16.1)	10.6
Equity		(1.1)	(0.7)	(0.1)
Comprehensive provision (benefit) for income taxes	$	(15.4)	46.9	(48.3)

Rate Reconciliation

The following table reconciles the difference between the actual tax rate on continuing operations and the statutory U.S. federal income tax rate of 35%.

		Years Ended December 31,
(In percentages)		2011		2010		2009
U.S. federal tax rate		35.0	%	35.0	%	35.0	%
Increases (reductions) in taxes due to:
	Adjustments to valuation allowances	(0.8)		10.5		(68.2)
	Foreign income taxes	2.1		(7.4)		(3.5)
	Medicare subsidy for retirement plans	-		9.8		(0.9)
	Tax settlement	-		(5.0)		-
	French business tax (a)	2.8		2.8		-
	Nontaxable acquisition-related (gains) losses	(0.5)		2.1		(2.9)
	Taxes on undistributed earnings of foreign affiliates	0.2		1.1		(1.1)
	State income taxes, net	(0.7)		(0.4)		0.2
	Nondeductible repatriation charge	-		-		4.7
	Other	(0.1)		(0.5)		-
Actual income tax rate on continuing operations		38.0	%	48.0	%	(36.7)	%

(a)        

Components of Deferred Tax Assets and Liabilities

			December 31,
(In millions)			2011	2010
Deferred tax assets
Retirement benefits other than pensions		$	112.7	82.0
Pension liabilities			138.3	91.2
Workers’ compensation and other claims			42.8	33.2
Property and equipment, net			0.2	0.4
Other assets and liabilities			106.8	99.7
Net operating loss carryforwards			44.9	38.6
Alternative minimum and other tax credits (a)			37.7	46.8
Subtotal			483.4	391.9
Valuation allowances			(43.9)	(45.9)
Total deferred tax assets			439.5	346.0
Deferred tax liabilities
Property and equipment, net			12.5	10.6
Other assets and miscellaneous			37.0	45.8
Deferred tax liabilities			49.5	56.4
Net deferred tax asset		$	390.0	289.6
Included in:
	Current assets	$	66.4	48.3
	Noncurrent assets		350.8	276.0
	Current liabilities, included in accrued liabilities		(4.2)	(4.1)
	Noncurrent liabilities		(23.0)	(30.6)
Net deferred tax asset		$	390.0	289.6

(a) U.S. alternative minimum tax credits of $36.8 million have an unlimited carryforward periodand the remaining credits of $0.9 million have various carryforward periods.

Valuation Allowances

Valuation allowances relate to deferred tax assets in various federal, state and non-U.S. jurisdictions. Based on our historical and expected future taxable earnings, and a consideration of available tax-planning strategies, we believe it is more likely than not that we will realize the benefit of the existing deferred tax assets, net of valuation allowances, at December 31, 2011.

				Years Ended December 31,
(In millions)				2011	2010	2009
Valuation allowances:
	Beginning of year		$	45.9	45.4	183.6
	Expiring tax credits			(0.3)	(0.6)	(0.7)
	Acquisitions and dispositions			0.3	(10.0)	0.3
	Changes in judgment about deferred tax assets (a)			(8.2)	(0.9)	(119.8)
	Other changes in deferred tax assets, charged to:
		Income from continuing operations		7.6	14.9	7.1
		Income from discontinued operations		-	(1.1)	1.7
		Other comprehensive income (loss) (b)		-	0.1	(28.3)
	Foreign currency exchange effects			(1.4)	(1.9)	1.5
	End of year		$	43.9	45.9	45.4

• Changes in judgment about valuation allowances are based on a recognition threshold of “more-likely-than-not.”Amounts are based on beginning-of-year balances of deferred tax assets that could potentially be realized in future years. Amounts are recognized in income from continuing operations. In 2009, includes $117.8 million related to U.S. federal and state income taxes.
• In 2009, includes a $25.4 million reversal related to net experience gains of U.S. retirement plans recognized in 2009.

Undistributed Foreign Earnings

As of December 31, 2011, we have not recorded U.S. federal deferred income taxes on approximately$318million of undistributed earnings of foreign subsidiaries and equity affiliates. It is expected that these earnings will be permanently reinvested in operations outside the U.S. It is not practical to compute the estimated deferred tax liability on these earnings.

Net Operating Losses

The gross amount of the net operating loss carryforwards as of December 31, 2011, was $255.4 million. The tax benefit of net operating loss carryforwards, before valuation allowances, as of December 31, 2011, was $44.9 million, and expires as follows:

(In millions)			Federal	State	Foreign	Total
Years of expiration
	2012-2016	$	-	0.5	3.7	4.2
	2017-2021		-	0.1	6.8	6.9
	2022 and thereafter		-	8.0	2.8	10.8
	Unlimited		-	-	23.0	23.0
		$	-	8.6	36.3	44.9

Uncertain Tax Positions

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

			Years Ended December 31,
(In millions)			2011	2010	2009
Uncertain tax positions:
	Beginning of year	$	19.4	19.0	19.3
	Increases related to prior-year tax positions		0.8	0.1	1.0
	Decreases related to prior-year tax positions		(1.6)	(1.3)	(1.0)
	Increases related to current-year tax positions		1.3	1.9	1.3
	Settlements		-	(7.0)	(0.4)
	Effect of the expiration of statutes of limitation		(1.2)	(1.6)	(1.2)
	Increases (decreases) related to business combinations and dispositions		(0.7)	8.3	-
	Foreign currency exchange effects		(0.8)	-	-
	End of year	$	17.2	19.4	19.0

Included in the balance of unrecognized tax benefits at December 31, 2011, are potential benefits of approximately $14.9 million that, if recognized, will reduce the effective taxrate on income from continuing operations. Also included in the balance of unrecognized tax benefits at December 31, 2011, are benefits of approximately $0.8 million that, if recognized, will reduce the effective tax rate on income from discontinued operations.

We recognize accrued interest and penalties related to unrecognized tax benefits in income tax expense. Interest and penalties included in income tax expense amounted to $1.2 million in 2011, $1.1 million in 2010, and $0.9 million in 2009. We had accrued penalties and interest of $5.9 million at December 31, 2011, and $4.5 million at December 31, 2010.

We file income tax returns in the U.S. federal and various state and foreign jurisdictions. With a few exceptions, as of December 31, 2011, we were no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations by tax authorities for years before 2008. Additionally, due to statute of limitations expirations and audit settlements, it is reasonably possible that approximately $3.3 million of currently remaining unrecognized tax positions may be recognized by the end of 2012.