part iI / item 8 amount that, in management’s judgment, is sufficient to reduce the deferred tax asset to an amount that is more likely than not to be realized. The evidence the Company considers in reaching such conclusions includes, but is not limited to, (1) future reversals of existing taxable temporary differences, (2) future taxable income exclusive of reversing taxable temporary differences, (3) taxable income in prior carryback year(s) if carryback is permitted under the tax law, (4) cumulative losses in recent years, (5) a history of tax losses or credit carryforwards expiring unused, (6) a carryback or carryforward period that is so brief it limits realization of tax bene- fits, and (7) a strong earnings history exclusive of the loss that cre- ated the carryforward and support showing that the loss is an aberration rather than a continuing condition. The Company accounts for unrecognized tax benefits in accordance with ASC Topic 740, which prescribes a minimum probability threshold that a tax position must meet before a financial statement benefit is recognized. The minimum threshold is defined as a tax position that is more likely than not to be sustained upon examina- tion by the applicable taxing authority, including resolution of any related appeals or litigation, based solely on the technical merits of the position. The tax benefit recognized is the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement. The Company recognizes interest and penalties related to unrecog- nized tax benefits within the income tax expense line of its Con- solidated Statement of Operations, while accrued interest and penalties are included within the related tax liability line of its Consolidated Balance Sheets. In determining whether the earnings of its non-U.S. subsidiaries are permanently reinvested overseas, the Company considers the following: • Its history of utilizing non-U.S. cash to acquire non-U.S. businesses, • Its current and future needs for cash outside the U.S. (e.g., to fund capital expenditures, business operations, potential acquisitions, etc.), • Its ability to satisfy U.S.-based cash needs (e.g., domestic pension contributions, interest payment on external debt, dividends to shareholders, etc.) with cash generated by its U.S. businesses, and • The effect U.S. tax reform proposals calling for reduced corporate income tax rates and/or “repatriation” tax holidays would have on the amount of the tax liability. Earnings Per Share The Company’s basic earnings per share calculations are based on the weighted average number of common shares outstanding during the year. Shares of restricted stock are included in the computation of both basic and diluted earnings per share. Potentially dilutive securities include outstanding stock options, restricted share units, deferred stock units and performance-based restricted share units. The dilutive effect of potentially dilutive securities is reflected in diluted earnings per common share by application of the treasury method. Diluted earn- ings per share gives effect to all potential dilutive common shares outstanding during the year. 39 Cash and Cash Equivalents Cash and cash equivalents include highly liquid investments with original maturities of three months or less that are readily convertible to cash and are not subject to significant risk from fluctuations in interest rates. As a result, the carrying amount of cash and cash equivalents approximates fair value. Accounts Receivable Receivables are carried at net realizable value. A summary of allowance for doubtful accounts activity follows: (in thousands) December 31, 2012 2011 2010 Balance at beginning of year $ 7,317 $ 8,221 $ 8,906 Provisions 5,878 5,518 4,250 Deductions (6,504) (6,422) (4,935) Balance at end of year $ 6,691 $ 7,317 $ 8,221 (in thousands, except per share data) For the year ended December 31, 2012 2011 2010 Income from continuing operations $196,189 $22,816 $152,980 Less: Non-controlling interest in subsidiaries’ earnings 828 201 20 Income from continuing operations attributable to common shareholders 195,361 22,615 152,960 Discontinued operations, net of tax 21,632 3,700 1,210 Net income attributable to common shareholders $216,993 $26,315 $154,170 Average basic shares outstanding 57,443 58,120 58,601 Effect of dilutive stock options 850 1,084 961 Average diluted shares outstanding 58,293 59,204 59,562 Earnings per share—basic: Income from continuing operations attributable to common shareholders $ 3.40 $ 0.39 $ 2.61 Discontinued operations, net of tax 0.38 0.06 0.02 Net income attributable to common shareholders $ 3.78 $ 0.45 $ 2.63 Earnings per share—diluted: Income from continuing operations attributable to common shareholders $ 3.35 $ 0.38 $ 2.57 Discontinued operations, net of tax 0.37 0.06 0.02 Net income attributable to common shareholders $ 3.72 $ 0.44 $ 2.59