XML 38 R18.htm IDEA: XBRL DOCUMENT
v3.19.1

Income Tax Expense | 12 Months Ended
--- | ---
Mar. 31, 2019
Income Tax Expense [Abstract] |
Income Tax Expense (Benefit) | Income from continuing operations before income taxes was as follows:
Years Ended March 31, |  | 2019 |  | 2018 |  | 2017
United States operations |  | $ | 235,405 |  |  | $ | 203,872 |  |  | $ | 189,429 |
Ireland operations |  | 13,693 |  |  | 11,837 |  |  | 8,597 |
Other locations operations |  | 120,372 |  |  | 139,273 |  |  | (13,380 | )
|  | $ | 369,470 |  |  | $ | 354,982 |  |  | $ | 184,646 |
The components of the provision for income taxes related to income from continuing operations consisted of the following:
Years Ended March 31, |  | 2019 |  | 2018 |  | 2017
Current: |  |  |  |  |  |
United States federal |  | $ | 29,943 |  |  | $ | 47,728 |  |  | $ | 43,900 |
United States state and local |  | 12,484 |  |  | 7,727 |  |  | 8,171 |
Ireland |  | 2,627 |  |  | 2,596 |  |  | 1,899 |
Other locations |  | 26,824 |  |  | 26,742 |  |  | 19,557 |
|  | 71,878 |  |  | 84,793 |  |  | 73,527 |
Deferred: |  |  |  |  |  |
United States federal |  | 5,775 |  |  | (15,728 | ) |  | 10,293 |
United States state and local |  | 2,836 |  |  | 2,656 |  |  | 2,131 |
Ireland |  | (546 | ) |  | (280 | ) |  | (645 | )
Other locations |  | (15,549 | ) |  | (8,081 | ) |  | (11,291 | )
|  | (7,484 | ) |  | (21,433 | ) |  | 488 |
Total Provision for Income Taxes |  | $ | 64,394 |  |  | $ | 63,360 |  |  | $ | 74,015 |
The total provision for income taxes can be reconciled to the tax computed at the Ireland statutory tax rate for 2019 and the United Kingdom statutory tax rate for 2018 and 2017 as follows:
Years Ended March 31, |  | 2019 |  | 2018 |  | 2017
National statutory tax rate |  | 12.5 | % |  | 19.0 | % |  | 20.0 | %
Increase in accruals for uncertain tax positions |  | — | % |  | 0.1 | % |  | 0.3 | %
U.S. state and local taxes, net of federal income tax benefit |  | 3.1 | % |  | 2.3 | % |  | 3.8 | %
Increase in valuation allowances |  | 0.4 | % |  | 0.1 | % |  | 0.1 | %
U.S. research and development credit |  | (0.6 | )% |  | (0.5 | )% |  | (1.1 | )%
U.S. foreign income tax credit |  | (0.2 | )% |  | (0.2 | )% |  | — | %
Difference in non-Ireland tax rates |  | 4.5 | % |  | — | % |  | — | %
Difference in non-United Kingdom tax rates |  | — | % |  | 4.1 | % |  | 6.0 | %
U.S. manufacturing deduction |  | — | % |  | (0.8 | )% |  | (2.5 | )%
Excess tax benefit for equity compensation |  | (2.2 | )% |  | (1.8 | )% |  | (2.8 | )%
Tax rate changes on deferred tax assets and liabilities |  | (0.6 | )% |  | (10.3 | )% |  | (2.3 | )%
U.S. transition tax on foreign earnings |  | (0.3 | )% |  | 4.9 | % |  | — | %
U.S. tax reform impact, GILTI and FDII |  | 0.3 | % |  | — | % |  | — | %
Acquisitions and divestitures |  | — | % |  | 0.5 | % |  | 9.0 | %
Goodwill impairment on divestitures |  | — | % |  | — | % |  | 7.9 | %
Capitalized acquisition, redomiciliation costs |  | 0.5 | % |  | — | % |  | 0.2 | %
All other, net |  | — | % |  | 0.4 | % |  | 1.5 | %
Total Provision for Income Taxes |  | 17.4 | % |  | 17.8 | % |  | 40.1 | %
Unrecognized Tax Benefits. We classify uncertain tax positions and related interest and penalties as long-term liabilities within “Other liabilities” in our accompanying Consolidated Balance Sheets, unless they are expected to be paid within 12 months, in which case, the uncertain tax positions would be classified as current liabilities within “Accrued income taxes.” We recognize interest and penalties related to unrecognized tax benefits within “Income tax expense” in our accompanying Consolidated Statements of Income. A reconciliation of the beginning and ending balances of the total amounts of unrecognized tax benefits is as follows:
|  | 2019 |  | 2018
Unrecognized Tax Benefits Balance at April 1 |  | $ | 2,500 |  |  | $ | 1,884 |
Increases for tax provisions of current year |  | 178 |  |  | 356 |
Decreases for tax provisions of prior year |  | (186 | ) |  | — |
Other, including currency translation |  | (178 | ) |  | 260 |
Unrecognized Tax Benefits Balance at March 31 |  | $ | 2,314 |  |  | $ | 2,500 |
We recognized interest and penalties related to uncertain tax positions in the provision for income taxes. As of March 31, 2019, and 2018 we had $360 and $295 accrued for interest and penalties, respectively. If all unrecognized tax benefits were recognized, the net impact on the provision for income tax expense would be $2,674. It is reasonably possible that during the next 12 months, there will be no material reductions in unrecognized tax benefits as a result of the expiration of various statutes of limitations or matters related to transfer pricing. We operate in numerous taxing jurisdictions and are subject to regular examinations by various United States federal, state and local, as well as foreign jurisdictions. We are no longer subject to United States federal examinations for years before fiscal 2016 and, with limited exceptions, we are no longer subject to United States state and local, or non-United States, income tax examinations by tax authorities for years before fiscal 2013. We remain subject to tax authority audits in various jurisdictions wherever we do business. In May 2019, we received two notices of proposed tax adjustment from the U.S. Internal Revenue Service (the “IRS”) regarding the deductibility of interest paid on certain intercompany debt. The notices relate to fiscal years 2016 and 2017. The IRS adjustment would result in a tax liability of approximately $25,000. We intend to contest the IRS’s assertions, including pursuing all available remedies such as appeals and litigation, if necessary. We have not established reserves related to these notices. An unfavorable outcome is not expected to have a material adverse impact on our consolidated financial position but could be material to our consolidated results of operations and cash flows for any one period. We estimate that the tax benefit from our Costa Rican Tax Holiday is $1,008 (or $0.01 per fully diluted share), annually. The Tax Holiday runs fully exempt, from income tax, through 2025 and partially exempt through 2029. Deferred Taxes. The significant components of the deferred tax assets and liabilities recorded in our accompanying balance sheets at March 31, 2019 and 2018 were as follows:
March 31, |  | 2019 |  | 2018
Deferred Tax Assets: |  |  |  |
Post-retirement benefit accrual |  | $ | 3,142 |  |  | $ | 3,505 |
Compensation |  | 14,275 |  |  | 12,334 |
Net operating loss carryforwards |  | 19,195 |  |  | 26,217 |
Accrued expenses |  | 4,858 |  |  | 5,795 |
Insurance |  | 3,187 |  |  | 3,417 |
Deferred income |  | 7,509 |  |  | 4,632 |
Bad debt |  | 1,386 |  |  | 1,426 |
Pension |  | 3,364 |  |  | 5,247 |
Other |  | 7,707 |  |  | 1,668 |
Deferred Tax Assets |  | 64,623 |  |  | 64,241 |
Less: Valuation allowance |  | 13,478 |  |  | 13,596 |
Total Deferred Tax Assets |  | 51,145 |  |  | 50,645 |
Deferred Tax Liabilities: |  |  |  |
Depreciation and depletion |  | 61,060 |  |  | 61,171 |
Intangibles |  | 128,479 |  |  | 140,398 |
Other |  | 2,197 |  |  | 2,774 |
Total Deferred Tax Liabilities |  | 191,736 |  |  | 204,343 |
Net Deferred Tax Assets (Liabilities) |  | $ | (140,591 | ) |  | $ | (153,698 | )
At March 31, 2019, we had U.S. federal operating loss carryforwards of $13,665, which remain subject to a 20 year carryforward period. Additionally, we had non-U.S. operating loss carry forwards of $46,595. Although the majority of the non-U.S. carryforwards have indefinite expiration periods, those carryforwards that have definite expiration periods will expire if unused between fiscal years 2020 and 2040. In addition, we have recorded tax benefits of $2,602 related to state operating loss carryforwards. If unused, these state operating loss carryforwards will expire between fiscal years 2020 and 2039. At March 31, 2019, we had $1,379 of tax credit carryforwards. These credit carryforwards can be used through fiscal 2029. We review the need for a valuation allowance against our deferred tax assets. A valuation allowance of $13,478 has been applied to a portion of the net deferred tax assets because we do not believe it is more-likely-than-not that we will receive future benefit. The valuation allowance decreased during fiscal 2019 by $118. Other than the tax expense recorded for the one-time transition tax on unremitted earnings of non-US subsidiaries, no additional provision has been made for income taxes on undistributed earnings of foreign subsidiaries as the amounts continue to be indefinitely reinvested. The Company is still evaluating whether to change its indefinite reinvestment assertion in light of U.S. Tax Reform and considers this conclusion to be incomplete. If the Company subsequently changes its assertion, it will account for the change in the quarter of fiscal year 2020 when the analysis is complete. The amount of undistributed earnings of subsidiaries was approximately $1,300,000 at March 31, 2019. It is not practicable to estimate the additional income taxes and applicable withholding taxes that would be payable on the remittance of such undistributed earnings. In October 2015, the Organization for Economic Cooperation and Development (OECD), in conjunction with the G20, finalized broad-based international tax policy guidelines that involve transfer pricing and other international tax subjects. While some member jurisdictions automatically adopt the new OECD guidelines, most member countries can adopt the guidelines only by new law or regulations. We are currently adopting processes to comply with the reporting requirements specified by the guidelines and are evaluating the other parts of the guidelines.

X
- Definition Income Tax Expense [Abstract] + References No definition available. + Details
Name: | ste_IncomeTaxExpenseAbstract
Namespace Prefix: | ste_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- 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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration