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Income Taxes | 12 Months Ended
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Dec. 31, 2020
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes The components of income before income taxes and the details of the provision for income taxes were as follows for the years ended December 31:
| 2020 |  | 2019 |  | 2018
| (In thousands)
Income before income taxes: |  |  |  |  |
Domestic | $ | 810,844 |  |  | $ | 766,436 |  |  | $ | 555,077 |
Foreign | 271,465 |  |  | 303,312 |  |  | 432,668 |
Total | $ | 1,082,309 |  |  | $ | 1,069,748 |  |  | $ | 987,745 |
Provision for income taxes: |  |  |  |  |
Current: |  |  |  |  |
Federal | $ | 126,427 |  |  | $ | 88,526 |  |  | $ | 204,712 |
Foreign | 61,672 |  |  | 81,452 |  |  | 51,686 |
State | 19,932 |  |  | 19,093 |  |  | 27,096 |
Total current | 208,031 |  |  | 189,071 |  |  | 283,494 |
Deferred: |  |  |  |  |
Federal | (1,254) |  |  | 18,005 |  |  | (62,095) |
Foreign | (4,072) |  |  | (29) |  |  | (3,872) |
State | 7,165 |  |  | 1,404 |  |  | (7,715) |
Total deferred | 1,839 |  |  | 19,380 |  |  | (73,682) |
Total provision | $ | 209,870 |  |  | $ | 208,451 |  |  | $ | 209,812 |
Significant components of the deferred tax (asset) liability were as follows at December 31:
| 2020 |  | 2019
| (In thousands)
Non-current deferred tax (asset) liability: |  |  |
Differences in basis of property and accelerated depreciation (1) | $ | 46,023 |  |  | $ | 45,747 |
Reserves not currently deductible | (61,872) |  |  | (44,239) |
Pensions | 39,256 |  |  | 39,820 |
Differences in basis of intangible assets and accelerated amortization | 565,661 |  |  | 537,534 |
Net operating loss carryforwards | (26,767) |  |  | (41,782) |
Share-based compensation | (13,780) |  |  | (12,060) |
Foreign Tax Credit Carryforwards | (261) |  |  | (333) |
Unremitted earnings | 10,657 |  |  | 12,977 |
Other | (43,507) |  |  | (20,889) |
| 515,410 |  |  | 516,775 |
Less: Valuation allowance | 5,965 |  |  | 7,146 |
| 521,375 |  |  | 523,921 |
Portion included in non-current assets | 12,103 |  |  | 12,219 |
Gross non-current deferred tax liability | $ | 533,478 |  |  | $ | 536,140 |
______________________ (1)Presented net of deferred tax asset of approximately $32.4 million and $35.1 million at December 31, 2020 and 2019, respectively, associated with ASC 842. The Company’s effective tax rate reconciles to the U.S. Federal statutory rate as follows for the years ended December 31:
| 2020 |  | 2019 |  | 2018
U.S. Federal statutory rate | 21.0 | % |  | 21.0 | % |  | 21.0 | %
State income taxes, net of federal income tax benefit | 2.3 |  |  | 1.8 |  |  | 1.2 |
Foreign operations, net | (1.4) |  |  | (0.9) |  |  | (0.1) |
U.S. Benefits for Manufacturing, Export and credits | (1.9) |  |  | (2.0) |  |  | (1.8) |
Uncertain Tax Items | (1.3) |  |  | (1.0) |  |  | 1.7 |
Stock compensation | (1.0) |  |  | (1.5) |  |  | (0.5) |
Net deferred tax revaluation | — |  |  | — |  |  | (0.1) |
US Tax on Foreign Earnings | 2.1 |  |  | 2.3 |  |  | (0.1) |
Other | (0.4) |  |  | (0.2) |  |  | (0.1) |
Consolidated effective tax rate | 19.4 | % |  | 19.5 | % |  | 21.2 | %
On December 22, 2017, the U.S. enacted the Tax Cuts and Jobs Act (the “Tax Act”). During 2018 the Company finalized the calculations of the Tax Act transitional tax items and reported a favorable $11.8 million tax benefit of which $10.4 million relates to the one-time mandatory deemed repatriation tax and $1.4 million relates to the remeasurement of the net deferred tax liabilities in the U.S. for the impact of the lower tax rates. The Company elected to pay the cash tax cost of the one-time mandatory tax on previously deferred earnings of non-U.S. subsidiaries over an eight-year period. As of December 31, 2020, the Company has a remaining cash tax obligation of $35.9 million, of which none is payable within the next twelve months. The Company has evaluated the impact of the global intangible low-taxed income (“GILTI”) section of the Tax Act and has made a tax accounting policy election to record the annual tax cost of GILTI as a current period expense when incurred and, as such, will not be measuring an impact of GILTI in its determination of deferred taxes. As a result of the one-time mandatory deemed repatriation and the taxable inclusions under the GILTI provisions of the Tax Act, the Company has approximately $482.0 million in previously taxed income (“PTI”) as of December 31, 2020 which can be repatriated without incremental U.S. Federal tax. The Company intends to reinvest its earnings indefinitely in operations outside the United States except to the extent of the PTI. There has been no provision for U.S. deferred income taxes for the undistributed earnings over PTI of approximately $411.0 million and $714.0 million at December 31, 2020 and 2019 respectively because determination of the amount of the unrecognized deferred income tax liability on these undistributed earnings is not practicable. As of December 31, 2020, and 2019, the Company recorded deferred income taxes totaling $10.7 million and $13.0 million respectively in state income and foreign withholding taxes expected to be incurred when the cash amounts related to the mandatory tax are ultimately repatriated to the U.S. The Company is acquisitive and at times acquires entities with tax attributes (net operating losses or tax credits) that carry over to post-acquisition tax periods of the Company. At December 31, 2020, the Company had tax effected benefits of $26.8 million related to net operating loss carryforwards, which will be available to offset future income taxes payable, subject to certain annual or other limitations based on foreign and U.S. tax laws. This amount includes net operating loss carryforwards of $14.5 million for federal income tax purposes with no valuation allowance, $10.7 million for state income tax purposes with no valuation allowance and $1.6 million for foreign income tax purposes with a valuation allowance of $1.6 million. These net operating loss carryforwards, if not used, will expire between 2021 and 2040. At December 31, 2020, the Company had tax effected benefits of $10.9 million related to tax credit carryforwards, which will be available to offset future income taxes payable, subject to certain annual or other limitations based on foreign and U.S. tax laws. This amount includes tax credit carryforwards of $3.4 million for federal income tax purposes with a valuation allowance of $1.2 million, $7.5 million for state income tax purposes with a valuation allowance of $2.0 million, and no remaining credit carryforwards for foreign income tax purposes. These tax credit carryforwards, if not used, will expire between 2021 and 2040. The Company maintains a valuation allowance to reduce certain deferred tax assets to amounts that are more likely than not to be realized. This allowance primarily relates to the deferred tax assets established for state non-deductible interest expense and federal and state credit carryforwards. In 2020, the Company recorded a decrease of $1.2 million in the valuation allowance of which $1.2 million relates to foreign losses that were utilized. There are no material uncertainties related to the realization of any deferred tax assets and their realization does not materially depend on specific tax planning strategies being implemented or changes in future levels of expected profits. At December 31, 2020, the Company had gross unrecognized tax benefits of $100.7 million, of which $60.6 million, if recognized, would impact the effective tax rate. At December 31, 2019, the Company had gross unrecognized tax benefits of $109.1 million, of which $65.9 million, if recognized, would impact the effective tax rate. At December 31, 2020 and 2019, the Company reported $11.6 million and $14.2 million, respectively, related to interest and penalty exposure as accrued income tax expense in the consolidated balance sheet. During 2020, the Company recognized a net benefit of $2.6 million, and net expense of $0.2 million and $8.9 million in 2019 and 2018, respectively, for interest and penalties related to uncertain tax positions in the consolidated statement of income as a component of income tax expense. Approximately 73% of the Company’s overall tax liability is incurred in the United States. The Company files income tax returns in various other state and foreign tax jurisdictions, in some cases for multiple legal entities per jurisdiction. Generally, the Company has open tax years subject to tax audit on average of between three and six years in these jurisdictions. At December 31, 2020, there were no tax years currently under examination by the Internal Revenue Service (“IRS”) related to the U.S. consolidated tax group, although a separate examination of a pre-acquisition net operating loss is ongoing related to a recently acquired company for which no material liability is expected. The Company has two separate ongoing examinations in Germany for tax years 2015-2017 for which no material liability is expected. The Company has not materially extended any other statutes of limitation for any significant location and has reviewed and accrued for, where necessary, tax liabilities for open periods including state and foreign jurisdictions that remain subject to examination. There have been no penalties asserted or imposed by the IRS related to substantial understatement of income, gross valuation misstatement or failure to disclose a listed or reportable transaction. During 2020, the Company added $24.3 million of tax, interest and penalties related to identified uncertain tax positions and reversed $35.3 million of tax and interest related to statute expirations and settlement of prior uncertain positions. During 2019, the Company added $25.4 million of tax, interest and penalties related to identified uncertain tax positions and reversed $35.4 million of tax and interest related to statute expirations and settlement of prior uncertain positions. The following is a reconciliation of the liability for uncertain tax positions at December 31:
| 2020 |  | 2019 |  | 2018
| (In millions)
Balance at the beginning of the year | $ | 109.1 |  |  | $ | 119.3 |  |  | $ | 60.3 |
Additions for tax positions related to the current year | 15.6 |  |  | 17.5 |  |  | 21.8 |
Additions for tax positions of prior years | 6.2 |  |  | 2.8 |  |  | 53.5 |
Reductions for tax positions of prior years | (0.3) |  |  | (1.3) |  |  | (3.9) |
Reductions related to settlements with taxing authorities | (0.5) |  |  | (0.9) |  |  | — |
Reductions due to statute expirations | (29.4) |  |  | (28.3) |  |  | (12.4) |
Balance at the end of the year | $ | 100.7 |  |  | $ | 109.1 |  |  | $ | 119.3 |
The additions above primarily reflect the increase in tax liabilities for uncertain tax positions related to certain higher transfer pricing risks for hard to value intangible assets. The reductions above primarily relate to statute expirations. At December 31, 2020, tax, interest and penalties of $110.7 million were classified as a non-current liability. The net change in uncertain tax positions for the year ended December 31, 2020 resulted in a decrease to income tax expense of $4.8 million, which reflects the decrease of $8.4 million in gross uncertain tax positions less offsetting benefits reported as decreases to deferred tax liabilities or increases in long-term taxes receivable.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI http://asc.fasb.org/extlink&oid=116825942&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI http://asc.fasb.org/extlink&oid=116825942&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 + Details
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