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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2017

Components of Provision for Income Taxes

The components of the provision (benefit) for income taxes consisted of the following:

Years ended December 31 (dollars in millions)		2017				2016				2015
Current:
Federal		$	148.0			$	71.6			$	82.9
State			9.4				14.5				13.9
International			43.8				34.9				23.6
Deferred:
Federal			23.5				11.0				(4.2	)
State			5.8				5.2				2.2
International			(6.2	)			(1.2	)			1.2
		$	224.3			$	136.0			$	119.6

Difference Between Provision for Income Taxes and U.S. Federal Statutory Rate

The provision for income taxes differs from the U.S. federal statutory rate due to the following items:

Years ended December 31		2017				2016				2015
Provision at U.S. federal statutory rate			35.0	%			35.0	%			35.0	%
State taxes, net of federal benefit			1.9				2.8				2.6
International income tax rate differential - China			(6.5	)			(6.2	)			(6.8	)
International income tax rate differential - other			0.1				0.3				0.2
U.S. manufacturing credit			(1.4	)			(1.5	)			(1.3	)
Research tax credits			(0.3	)			(0.3	)			(0.3	)
Excess tax benefit on stock compensation			(2.2	)			(1.1	)			—
Other			0.8				0.4				0.3
			27.4	%			29.4	%			29.7	%
U.S. Tax Cuts & Jobs Act (U.S. Tax Reform)			15.7				—				—
			43.1	%			29.4	%			29.7	%

Components of Earnings Before Income Taxes

Components of earnings before income taxes were as follows:

Years ended December 31 (dollars in millions)		2017				2016				2015
U.S.		$	329.9			$	300.9			$	255.7
International			190.9				161.6				146.8
		$	520.8			$	462.5			$	402.5

Tax Effects of Temporary Differences of Assets and Liabilities

The tax effects of temporary differences of assets and liabilities between income tax and financial reporting are as follows:

December 31 (dollars in millions)
		2017								2016
		Assets				Liabilities				Assets				Liabilities
Employee benefits		$	30.4			$	—			$	67.5			$	—
Product liability and warranties			43.4				—				67.1				—
Inventories			—				2.0				—				3.4
Accounts receivable			16.5				—				14.9				—
Property, plant and equipment			—				31.1				—				34.3
Intangibles			—				54.3				—				77.4
Environmental liabilities			2.4				—				2.9				—
Undistributed foreign earnings			—				38.6				—				42.3
Tax loss and credit carryovers			19.8				—				18.2				—
All other			5.5				—				4.3				—
Valuation allowance			(15.0	)			—				(13.1	)			—
		$	103.0			$	126.0			$	161.8			$	157.4
Net asset						$	23.0			$	4.4

Reconciliation of Tax Loss Carryovers, Credit Carryovers and Valuation Allowances

A reconciliation of the beginning and ending amounts of tax loss carryovers, credit carryovers and valuation allowances is as follows:

December 31 (dollars in millions)
		Net Operating Losses and Tax Credits								Valuation Allowances
		2017				2016				2017				2016
Beginning balance		$	18.2			$	14.6			$	13.1			$	11.0
Additions			1.6				3.7				1.9				2.1
Reductions			—				(0.1	)			—				—
Ending balance		$	19.8			$	18.2			$	15.0			$	13.1

Reconciliation of Unrecognized Tax Benefits

A reconciliation of the beginning and ending amount of unrecognized benefits is as follows:

(Dollars in millions)		2017				2016
Balance at January 1		$	4.2			$	2.6
Additions for tax positions of prior years			2.0				1.6
Balance at December 31		$	6.2			$	4.2

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Tabular disclosure for tax positions taken in the tax returns filed or to be filed for which it is more likely than not that the tax position will not be sustained upon examination by taxing authorities and other income tax contingencies. Includes, but is not limited to, interest and penalties, reconciliation of unrecognized tax benefits, unrecognized tax benefits that would affect the effective tax rate, tax years that remain subject to examination by tax jurisdictions, and information about positions for which it is reasonably possible that amounts unrecognized will significantly change within 12 months.

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