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Income Taxes | 12 Months Ended
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Dec. 31, 2016
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 2016, the statute of limitations for the 2012 U.S. federal tax year lapsed, leaving tax years 2013 through 2016 open to examination. For U.S. state and local jurisdictions, tax years 2012 through 2016 are open to examination. We are also subject to examination in various foreign jurisdictions for tax years 2009 through 2016. A reconciliation of the beginning and ending amount of the liability for unrecognized tax benefits is as follows:
($ in millions) | 2016 |  | 2015 |
Balance at January 1 | $ | 5.9 |  | $ | 6.9 |
Increase due to current year position | 1.0 |  | 0.8 |
Increase due to prior year position | 1.2 |  | 0.9 |
Reduction for expiration of statute of limitations | (0.9 | ) | (1.2 | )
Settlements | (1.0 | ) | (1.5 | )
Balance at December 31 | $ | 6.2 |  | $ | 5.9 |
In addition, we had balances in accrued liabilities for interest and penalties of $0.1 million and $0.3 million at December 31, 2016 and 2015, respectively. As of December 31, 2016, we had $6.2 million of total gross unrecognized tax benefits, of which $1.4 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 amount of gross unrecognized tax benefits may be reduced by approximately $0.7 million during the next twelve months, which would favorably impact our effective tax rate. The components of income before income taxes are:
($ in millions) | 2016 |  | 2015 |  | 2014 |
U.S. operations | $ | 84.5 |  | $ | (4.0 | ) | $ | 57.5 |
International operations | 105.3 |  | 120.1 |  | 111.5 |
Total income before income taxes | $ | 189.8 |  | $ | 116.1 |  | $ | 169.0 |
The related provision for income taxes consists of:
($ in millions) | 2016 |  | 2015 |  | 2014 |
Current: |  |  |
Federal | $ | 2.5 |  | $ | 1.0 |  | $ | 5.2 |
State | 1.0 |  | 0.9 |  | 0.5 |
International | 29.4 |  | 33.3 |  | 34.5 |
Current income tax provision | 32.9 |  | 35.2 |  | 40.2 |
Deferred: |  |  |
Federal and state | 21.8 |  | (13.2 | ) | 7.7 |
International | (0.3 | ) | 4.3 |  | (0.7 | )
Deferred income tax provision | 21.5 |  | (8.9 | ) | 7.0 |
Income tax expense | $ | 54.4 |  | $ | 26.3 |  | $ | 47.2 |
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) | 2016 |  | 2015 |
Deferred tax assets |  |
Net operating loss carryforwards | $ | 15.4 |  | $ | 16.5 |
Tax credit carryforwards | 27.9 |  | 40.8 |
Restructuring and impairment charges | 2.9 |  | — |
Pension and deferred compensation | 46.4 |  | 42.0 |
Other | 19.5 |  | 19.3 |
Valuation allowance | (18.7 | ) | (20.1 | )
Total deferred tax assets | 93.4 |  | 98.5 |
Deferred tax liabilities: |  |
Accelerated depreciation | 30.3 |  | 35.0 |
Other | 6.1 |  | 5.4 |
Total deferred tax liabilities | 36.4 |  | 40.4 |
Net deferred tax asset | $ | 57.0 |  | $ | 58.1 |
A reconciliation of the U.S. federal corporate tax rate to our effective consolidated tax rate on income before income taxes follows:
| 2016 |  | 2015 |  | 2014 |
U.S. federal corporate tax rate | 35.0 | % | 35.0 | % | 35.0 | %
Tax on international operations less than U.S. tax rate | (2.9 | ) | (5.1 | ) | (6.8 | )
Reversal of prior valuation allowance | (0.3 | ) | — |  | (0.5 | )
Reversal of reserves for unrecognized tax benefits | (0.6 | ) | (1.6 | ) | (0.5 | )
U.S. tax on international earnings, net of foreign tax credits | (1.3 | ) | (4.6 | ) | (0.1 | )
State income taxes, net of federal tax effect | 0.8 |  | 0.3 |  | 1.5 |
U.S. research and development credits | (0.8 | ) | (1.3 | ) | (0.9 | )
Other business credits and Section 199 Deduction | (1.1 | ) | (1.3 | ) | (0.7 | )
Other | (0.1 | ) | 1.2 |  | 1.0 |
Effective tax rate | 28.7 | % | 22.6 | % | 28.0 | %
During 2016, we recorded a tax benefit of $9.0 million in connection with restructuring and related charges of $26.4 million, a discrete tax charge of $0.8 million related to the pension curtailment gain of $2.1 million, and a discrete tax charge of $1.0 million resulting from the impact of changes in enacted tax rates on our previously-recorded deferred tax asset and liability balances. 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 pension settlement charge. 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 OCI 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. At December 31, 2016, we have fully utilized all of our U.S. federal net operating loss carryforwards. State operating loss carryforwards of $254.8 million created a deferred tax asset of $14.0 million, while foreign operating loss carryforwards of $9.4 million created a deferred tax asset of $1.4 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: $5.3 million in 2017 and $249.5 million thereafter. Foreign loss carryforwards will begin to expire in 2024, while $6.2 million of the total $9.4 million will not expire. As of December 31, 2016, we had available foreign tax credit carryforwards of $8.2 million expiring as follows: $3.2 million in 2024 and $5.0 million in 2025. We have U.S. federal and state research and development credit carryforwards of $12.0 million and $3.0 million, respectively. The $12.0 million of U.S. federal research and development credits expire as follows: $0.6 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, $1.4 million expire in 2033 and $5.5 million expire after 2033. The $3.0 million of state research and development credits expire as follows: $0.2 million expire in 2021, $0.8 million expire in 2022, $0.5 million expire in 2023 and $1.5 million expire after 2023. Additionally, we have available other state tax credits of $0.9 million which expire in 2020. In November 2015, the FASB issued guidance regarding the balance sheet classification of deferred taxes. This guidance requires that deferred tax assets and liabilities be classified as noncurrent. The requirement that deferred tax assets and liabilities of a tax-paying component of an entity be offset and presented as a single amount is not affected by these amendments. We adopted this guidance in the fourth quarter of 2015, on a prospective basis. Please refer to Note 2, New Accounting Standards, for additional details. Undistributed earnings of foreign subsidiaries amounted to $612.3 million at December 31, 2016, 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=65882285&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=65882285&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=65882285&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=65882285&loc=d3e32537-109319 + Details
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