Income taxes (Tables)

12 Months Ended

Dec. 31, 2014

Total Income Before Income Taxes and Provision for Income Taxes

Following is the total income before income taxes and the provision for income taxes for the three years ended December 31, 2014.

Year ended December 31 (millions)		2014			2013			2012
Income before income taxes
United States	$	(19.9	)	$	28.4		$	32.5
Foreign		165.4			191.0			221.6
Total income before income taxes	$	145.5		$	219.4		$	254.1
Provision for income taxes
Current
United States	$	2.1		$	8.0		$	3.6
Foreign		59.4			63.0			66.5
State and local		1.0			(.2	)		–
Total		62.5			70.8			70.1
Deferred
Foreign		23.7			28.5			27.2
Total provision for income taxes	$	86.2		$	99.3		$	97.3

Reconciliation of the Provision for Income Taxes

Following is a reconciliation of the provision for income taxes at the United States statutory tax rate to the provision for income taxes as reported:

Year ended December 31 (millions)		2014			2013			2012
United States statutory income tax provision	$	50.9		$	76.8		$	88.9
Income and losses for which no provision or benefit has been recognized		35.7			13.5			7.0
Foreign rate differential and other foreign tax expense		(22.0	)		(23.0	)		(32.2	)
Income tax withholdings		17.1			15.4			20.3
Permanent items		1.1			4.0			4.0
Enacted rate changes		–			8.9			9.0
Change in uncertain tax positions		.2			4.4			4.5
Change in valuation allowances due to changes in judgment		7.0			(.5	)		–
Income tax credits, U.S.		(3.9	)		–			(4.0	)
Other		.1			(.2	)		(.2	)
Provision for income taxes	$	86.2		$	99.3		$	97.3

Significant Portions of Deferred Tax Assets and Liabilities

The tax effects of temporary differences and carryforwards that give rise to significant portions of deferred tax assets and liabilities at December 31, 2014 and 2013 were as follows:

December 31 (millions)		2014			2013
Deferred tax assets
Tax loss carryforwards	$	883.3		$	888.8
Postretirement benefits		791.3			566.3
Foreign tax credit carryforwards		245.5			252.4
Other tax credit carryforwards		88.0			88.9
Deferred revenue		60.5			86.4
Employee benefits and compensation		44.6			42.4
Purchased capitalized software		39.3			41.3
Capitalized research and development		36.0			89.7
Depreciation		34.9			31.6
Capitalized costs		16.3			16.5
Warranty, bad debts and other reserves		12.8			14.6
Other		29.5			26.8
		2,282.0			2,145.7
Valuation allowance		(2,107.8	)		(1,998.8	)
Total deferred tax assets	$	174.2		$	146.9
Deferred tax liabilities
Other	$	37.9		$	33.0
Total deferred tax liabilities	$	37.9		$	33.0
Net deferred tax assets	$	136.3		$	113.9

Reconciliation of Changes in Unrecognized Tax Benefits

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

Year ended December 31 (millions)	2014			2013			2012
Balance at January 1	$	26.3		$	29.2		$	24.3
Additions based on tax positions related to the current year		14.4			(2.4	)		3.5
Changes for tax positions of prior years		(1.4	)		(.1	)		1.4
Reductions as a result of a lapse of applicable statute of limitations		(1.6	)		–			(.4	)
Settlements		(.9	)		(.2	)		(.7	)
Changes due to foreign currency		(1.8	)		(.2	)		1.1
Balance at December 31	$	35.0		$	26.3		$	29.2