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Income Taxes | 12 Months Ended
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Dec. 31, 2015
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes As a global organization, we and our subsidiaries file income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions. During 2015, the statute of limitations for the 2011 U.S. federal tax year lapsed, leaving tax years 2012 through 2015 open to examination. For U.S. state and local jurisdictions, tax years 2011 through 2015 are open to examination. We are also subject to examination in various foreign jurisdictions for tax years 2008 through 2015. A reconciliation of the beginning and ending amount of the liability for unrecognized tax benefits is as follows:
($ in millions) | 2015 |  | 2014 |
Balance at January 1 | $ | 6.9 |  | $ | 7.1 |
Additions for tax positions taken in the current year | 0.6 |  | 0.6 |
Reduction for expiration of statute of limitations/audits | (1.6 | ) | (0.8 | )
Balance at December 31 | $ | 5.9 |  | $ | 6.9 |
In addition, we had balances in accrued liabilities for interest and penalties of $0.3 million and $0.6 million at December 31, 2015 and 2014, respectively. As of December 31, 2015, we had $5.9 million of total gross unrecognized tax benefits, of which $5.9 million, if recognized, would favorably impact the effective income tax rate. It is reasonably possible that, due to the expiration of statutes and the closing of tax audits, the liability for unrecognized tax benefits may be reduced by approximately $1.0 million during the next twelve months, which would favorably impact our effective tax rate. The components of income before income taxes are:
($ in millions) | 2015 |  | 2014 |  | 2013 |
U.S. operations | $ | (4.0 | ) | $ | 57.5 |  | $ | 28.9 |
International operations | 120.1 |  | 111.5 |  | 118.2 |
Total income before income taxes | $ | 116.1 |  | $ | 169.0 |  | $ | 147.1 |
The related provision for income taxes consists of:
($ in millions) | 2015 |  | 2014 |  | 2013 |
Current: |  |  |
Federal | $ | 1.0 |  | $ | 5.2 |  | $ | — |
State | 0.9 |  | 0.5 |  | 0.3 |
International | 33.3 |  | 34.5 |  | 38.2 |
Current income tax provision | 35.2 |  | 40.2 |  | 38.5 |
Deferred: |  |  |
Federal and state | (13.2 | ) | 7.7 |  | 9.2 |
International | 4.3 |  | (0.7 | ) | (7.5 | )
Deferred income tax provision | (8.9 | ) | 7.0 |  | 1.7 |
Income tax expense | $ | 26.3 |  | $ | 47.2 |  | $ | 40.2 |
Deferred income taxes result from temporary differences between the amount of assets and liabilities recognized for financial reporting and tax purposes. The significant components of our deferred tax assets and liabilities at December 31 are:
($ in millions) | 2015 |  | 2014 |
Deferred tax assets |  |
Net operating loss carryforwards | $ | 16.5 |  | $ | 20.4 |
Tax credit carryforwards | 40.8 |  | 40.4 |
Pension and deferred compensation | 42.0 |  | 43.7 |
Other | 19.3 |  | 20.0 |
Valuation allowance | (20.1 | ) | (22.1 | )
Total deferred tax assets | 98.5 |  | 102.4 |
Deferred tax liabilities: |  |
Accelerated depreciation | 35.0 |  | 36.8 |
Other | 5.4 |  | 7.7 |
Total deferred tax liabilities | 40.4 |  | 44.5 |
Net deferred tax asset | $ | 58.1 |  | $ | 57.9 |
A reconciliation of the U.S. federal corporate tax rate to our effective consolidated tax rate on income before income taxes follows:
| 2015 |  | 2014 |  | 2013 |
U.S. federal corporate tax rate | 35.0 | % | 35.0 | % | 35.0 | %
Tax on international operations less than U.S. tax rate | (5.1 | ) | (6.8 | ) | (5.3 | )
Reversal of prior valuation allowance | — |  | (0.5 | ) | (1.0 | )
Reversal of reserves for unrecognized tax benefits | (1.6 | ) | (0.5 | ) | (0.8 | )
U.S. tax on international earnings, net of foreign tax credits | (4.6 | ) | (0.1 | ) | 0.1 |
State income taxes, net of federal tax effect | 0.3 |  | 1.5 |  | 0.1 |
U.S. research and development credits | (1.3 | ) | (0.9 | ) | (1.8 | )
Other business credits and Section 199 Deduction | (1.3 | ) | (0.7 | ) | (0.5 | )
Other | 1.2 |  | 1.0 |  | 1.6 |
Effective tax rate | 22.6 | % | 28.0 | % | 27.4 | %
During 2015, we recorded a discrete tax benefit of $4.0 million related to executive retirement and related costs. In addition, we recorded a discrete tax benefit of $18.4 million for a non-cash pension settlement charge. This charge was incurred in connection with the purchase of a group annuity contract for pre-2015 retirees and their beneficiaries. In 2015, we also recorded a discrete tax charge of $0.8 million resulting from the impact of a change in the enacted tax rate in the United Kingdom on our previously-recorded deferred tax asset balances. During 2014, we recorded a discrete tax charge of $1.0 million resulting from the impact of a change in apportionment factors on state tax rates applied to items in other comprehensive income and a discrete tax charge of $0.8 million as a result of the finalization of estimates of foreign tax credits available with respect to a repatriation of cash from our subsidiaries in Israel. During 2013, we recorded a discrete tax charge of $3.5 million, which related to the finalization of a beneficial agreement with local tax authorities in Israel that clarified the future tax status of our entities in Israel and settled a tax audit for the years 2009 through 2011. During 2013, we also recorded a discrete tax charge of $1.3 million resulting from the impact of a change in the enacted tax rate in the United Kingdom on our previously-recorded deferred tax asset balances and a discrete tax benefit of $1.3 million related to the reinstatement of the Research and Development tax credit under the Taxpayer Relief Act that was enacted in January 2013. In accordance with U.S. GAAP, although the Taxpayer Relief Act retroactively reinstated the tax credit for two years, from January 1, 2012 through December 31, 2013, it was not taken into account for financial reporting purposes until 2013. At December 31, 2015, we have fully utilized all of our U.S. federal net operating loss carryforwards. State operating loss carryforwards of $265.8 million created a deferred tax asset of $14.7 million, while foreign operating loss carryforwards of $8.9 million created a deferred tax asset of $1.8 million. Management estimates that certain state and foreign operating loss carryforwards are unlikely to be utilized and the associated deferred tax assets have been fully reserved. State loss carryforwards expire as follows: $5.8 million in 2016 and $260.0 million thereafter. Foreign loss carryforwards will begin to expire in 2019, while $5.6 million of the total $8.9 million will not expire. As of December 31, 2015, we had available foreign tax credit carryforwards of $21.1 million expiring as follows: $1.5 million in 2018, $3.1 million in 2019, $3.2 million in 2020, $9.6 million in 2021 and $3.7 million in 2024. We have U.S. federal and state research and development credit carryforwards of $11.0 million and $3.2 million, respectively. The $11.0 million of U.S. federal research and development credits expire as follows: $1.1 million expire in 2028, $1.1 million expire in 2029, $1.0 million expire in 2030, $1.0 million expire in 2031, $1.4 million expire in 2032 and $5.4 million expire after 2032. The $3.2 million of state research and development credits expire as follows: $0.5 million expire in 2021, $0.8 million expire in 2022, $0.5 million expire in 2023 and $1.4 million expire after 2023. Additionally, we have available other state tax credits of $1.0 million which expire in 2020. As part of its simplification initiative, in 2015, the FASB issued new guidance that requires entities with a classified balance sheet to present all deferred tax assets and liabilities as noncurrent. Management has elected to early adopt the new guidance, on a prospective basis. This election was included as part of the year-end 2015 financial statements. Prior period results were not restated to reflect this election. Undistributed earnings of foreign subsidiaries amounted to $529.1 million at December 31, 2015, on which deferred income taxes have not been provided because such earnings are intended to be reinvested indefinitely outside of the U.S. It is not practicable to estimate the tax liability that might be incurred if such earnings were remitted to the U.S.

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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/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32559-109319 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319 + Details
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