XML 34 R16.htm IDEA: XBRL DOCUMENT
v3.10.0.1

Income Taxes (Notes) | 12 Months Ended
--- | ---
Dec. 31, 2018
Income Tax Disclosure [Abstract] |
Income Tax Disclosure [Text Block] | Income Taxes The components of income before income taxes are listed below.
| Years ended December 31,
| 2018 |  | 2017 |  | 2016
Domestic | $ | 474.0 |  |  | $ | 514.8 |  |  | $ | 502.1 |
Foreign | 364.0 |  |  | 326.0 |  |  | 323.5 |
Total | $ | 838.0 |  |  | $ | 840.8 |  |  | $ | 825.6 |
The provision for income taxes is listed below.
| Years ended December 31,
| 2018 |  | 2017 |  | 2016
U.S. federal income taxes (including foreign withholding taxes): |  |  |  |  |
Current | $ | 38.1 |  |  | $ | 154.1 |  |  | $ | 54.3 |
Deferred | 29.9 |  |  | (37.6 | ) |  | 35.7 |
| 68.0 |  |  | 116.5 |  |  | 90.0 |
State and local income taxes: |  |  |  |  |
Current | 25.1 |  |  | 18.8 |  |  | 8.2 |
Deferred | 3.4 |  |  | 19.7 |  |  | (1.6 | )
| 28.5 |  |  | 38.5 |  |  | 6.6 |
Foreign income taxes: |  |  |  |  |
Current | 121.9 |  |  | 107.9 |  |  | 89.8 |
Deferred | (19.2 | ) |  | 8.4 |  |  | 10.5 |
| 102.7 |  |  | 116.3 |  |  | 100.3 |
Total | $ | 199.2 |  |  | $ | 271.3 |  |  | $ | 196.9 |
A reconciliation of the effective income tax rate as reflected in our Consolidated Statements of Operations to the U.S. federal statutory income tax rate is listed below.
| Years ended December 31,
| 2018 |  | 2017 |  | 2016
U.S. federal statutory income tax rate | 21.0 | % |  | 35.0 | % |  | 35.0 | %
Income tax provision at U.S. federal statutory rate | $ | 176.0 |  |  | $ | 294.3 |  |  | $ | 289.0 |
State and local income taxes, net of U.S. federal income tax benefit | 23.8 |  |  | 23.5 |  |  | 4.3 |
Impact of foreign operations, including withholding taxes | 50.7 |  |  | (6.7 | ) |  | (23.9 | )
U.S. tax incentives | (17.5 | ) |  | (1.3 | ) |  | (1.3 | )
Change in net valuation allowance 1 | (16.9 | ) |  | 1.4 |  |  | (13.4 | )
Divestitures | 11.7 |  |  | 1.1 |  |  | 9.7 |
U.S. federal tax credits | (48.1 | ) |  | (0.4 | ) |  | (44.6 | )
Stock compensation | (6.8 | ) |  | (15.3 | ) |  | (9.0 | )
Increase/(decrease) in unrecognized tax benefits | 8.4 |  |  | 7.0 |  |  | (21.8 | )
Net impact of the Tax Act | 13.4 |  |  | (36.0 | ) |  | 0.0 |
Statutory tax rate changes | 0.0 |  |  | 0.0 |  |  | 11.4 |
Other | 4.5 |  |  | 3.7 |  |  | (3.5 | )
Provision for income taxes | $ | 199.2 |  |  | $ | 271.3 |  |  | $ | 196.9 |
Effective income tax rate on operations | 23.8 | % |  | 32.3 | % |  | 23.8 | %
1 | Reflects changes in valuation allowances that impacted the effective income tax rate for each year presented.
In 2018, our effective income tax rate of 23.8% was positively impacted by U.S. tax incentives, foreign tax credits from a distribution of unremitted earnings, the net reversal of valuation allowance in Continental Europe and research and development credits. The effective income tax rate was negatively impacted by losses in certain foreign jurisdictions where we receive no tax benefit due to 100% valuation allowances, non-deductible losses on sales of businesses and assets held for sale, by tax expense associated with the change to our assertion regarding the permanent reinvestment of undistributed earnings attributable to certain foreign subsidiaries, and by tax expense related to the true-up of our December 31, 2017 tax reform estimates as permitted by SEC Staff issued Accounting Bulletin No. 118 (“SAB 118”). Public Law 115-97, commonly referred to as the Tax Cuts and Jobs Act (the "Tax Act") was signed into law on December 22, 2017. The Tax Act legislated many new tax provisions which have impacted our operations. At December 31, 2017, provisional amounts were recorded as permitted by SAB 118. We have finalized our calculations of the impact of the Tax Act and have revised our estimates as required by SAB 118. This resulted in a tax expense of $13.4, primarily attributable to our estimate of the tax imposed on the deemed repatriation of unremitted foreign earnings. The Tax Act imposed a new tax on certain foreign earnings generated in 2018 and forward. These global intangible low-taxed income ("GILTI") tax rules are complex. U.S. GAAP allows us to choose an accounting policy which treats the U.S. tax under GILTI provisions as either a current expense, as incurred, or as a component of the Company’s measurement of deferred taxes. The Company has elected to account for the GILTI tax as a current expense. In 2017, our effective income tax rate of 32.3% was positively impacted by a net benefit of $36.0 as a result of the Tax Act as well as excess tax benefits on employee share-based payments, partially offset by losses in certain foreign jurisdictions where we receive no tax benefit due to 100% valuation allowances. In 2016, our effective income tax rate of 23.8% was positively impacted by a benefit of $44.6 related to refunds to be claimed on future amended U.S. federal returns for tax years 2014 and 2015 primarily related to foreign tax credits and, to a lesser extent, research and development credits based on the conclusion of multi-year studies; the settlement of 2011 and 2012 income tax audits, which included the recognition of certain previously unrecognized tax benefits of $23.4; the reversal of valuation allowances of $12.2 as a consequence of the disposition of certain businesses in Continental Europe; excess tax benefits on employee share-based payments; and various changes in state income tax laws as well as the recognition of previously unrecognized state tax benefits as a result of a lapse in statute of limitations. The positive impacts to our tax rates were partially offset by the revaluation of deferred tax assets as a result of a statutory tax rate change in Continental Europe, losses in certain foreign jurisdictions where we receive no tax benefit due to 100% valuation allowances and by losses on sales of businesses for which we did not receive a full tax benefit. The components of deferred tax assets and liabilities are listed below.
| December 31,
| 2018 |  | 2017
Postretirement/post-employment benefits | $ | 17.9 |  |  | $ | 19.5 |
Deferred compensation | 99.8 |  |  | 91.7 |
Pension costs | 22.2 |  |  | 27.6 |
Basis differences in fixed assets | (71.7 | ) |  | (52.0 | )
Rent | 27.3 |  |  | 27.5 |
Interest | 48.8 |  |  | 45.8 |
Accruals and reserves | 21.0 |  |  | 18.4 |
Allowance for doubtful accounts | 7.4 |  |  | 10.2 |
Basis differences in intangible assets | (302.7 | ) |  | (281.3 | )
Investments in equity securities | 1.2 |  |  | (3.3 | )
Tax loss/tax credit carry forwards | 345.6 |  |  | 357.9 |
Prepaid expenses | (6.3 | ) |  | (1.7 | )
Deferred revenue | (26.8 | ) |  | (41.3 | )
Unremitted foreign earnings | (9.5 | ) |  | 0.0 |
Other | 38.2 |  |  | 43.7 |
Total deferred tax assets, net | 212.4 |  |  | 262.7 |
Valuation allowance | (211.0 | ) |  | (243.0 | )
Net deferred tax assets | $ | 1.4 |  |  | $ | 19.7 |
We evaluate the realizability of our deferred tax assets on a quarterly basis. The realization of our deferred tax assets is primarily dependent on future earnings. The amount of the deferred tax assets considered realizable could be reduced or increased in the near future if estimates of future taxable income are lower or greater than anticipated. A valuation allowance is established when it is “more likely than not” that all or a portion of deferred tax assets will not be realized. In circumstances where there is negative evidence, establishment of a valuation allowance is considered. The factors used in assessing valuation allowances include all available evidence, such as past operating results, estimates of future taxable income and the feasibility of tax planning strategies. We believe that cumulative losses in the most recent three-year period represent significant negative evidence, and as a result, we determined that certain of our deferred tax assets required the establishment of a valuation allowance. The deferred tax assets for which an allowance was recognized relate primarily to state and foreign tax loss carryforwards. The change in the valuation allowance is listed below.
| Years ended December 31,
| 2018 |  | 2017 |  | 2016
Balance at beginning of period | $ | 243.0 |  |  | $ | 255.6 |  |  | $ | 275.1 |
Reversed to costs and expenses | (28.0 | ) |  | (4.6 | ) |  | (15.4 | )
Charged (reversed) to gross tax assets and other accounts 1 | 5.1 |  |  | (27.3 | ) |  | 9.5 |
Foreign currency translation | (9.1 | ) |  | 19.3 |  |  | (13.6 | )
Balance at end of period | $ | 211.0 |  |  | $ | 243.0 |  |  | $ | 255.6 |
1 | Primarily represents changes to the valuation allowance related to the change of a corresponding deferred tax asset.
In 2018, 2017, and 2016, amounts reversed to costs and expenses primarily related to decreases in valuation allowances in Continental Europe for existing deferred tax assets. As of December 31, 2018, there were $1,149.4 of loss carryforwards. These loss carryforwards were all non-U.S. tax loss carryforwards, of which $994.1 have unlimited carryforward periods and $155.3 have expiration periods from 2019 to 2038. As of December 31, 2018, the Company also had $26.8 in deferred tax assets for state net operating loss carryforwards and tax credit carryforwards, which will expire between 2019 and 2038. As of December 31, 2018, we had $1,079.1 of undistributed earnings attributable to foreign subsidiaries. The Company has historically asserted that its unremitted foreign earnings are permanently reinvested, and therefore has not recorded any deferred taxes on such amounts. During the third quarter ended September 30, 2018, as a result of our increased debt and associated servicing commitments in connection with the Acxiom Acquisition that was consummated on October 1, 2018, the Company re-evaluated its global cash needs and as a result determined that approximately $435.0 of undistributed foreign earnings from certain international entities are no longer subject to the permanent reinvestment assertion. We recorded a tax expense of $10.8 representing our estimate of the tax costs associated with this change to our assertion. We have not changed our permanent reinvestment assertion with respect to any other international entities as we intend to use the related historical earnings and profits to fund international operations and investments. The table below summarizes the activity related to our unrecognized tax benefits.
| Years ended December 31,
| 2018 |  | 2017 |  | 2016
Balance at beginning of period | $ | 271.9 |  |  | $ | 246.7 |  |  | $ | 226.9 |
Increases as a result of tax positions taken during a prior year | 65.9 |  |  | 6.3 |  |  | 65.0 |
Decreases as a result of tax positions taken during a prior year | (10.8 | ) |  | (8.1 | ) |  | (47.5 | )
Settlements with taxing authorities | (6.5 | ) |  | (0.8 | ) |  | (4.6 | )
Lapse of statutes of limitation | (1.7 | ) |  | (3.3 | ) |  | (11.8 | )
Increases as a result of tax positions taken during the current year | 16.6 |  |  | 31.1 |  |  | 18.7 |
Balance at end of period | $ | 335.4 |  |  | $ | 271.9 |  |  | $ | 246.7 |
Included in the total amount of unrecognized tax benefits of $335.4 as of December 31, 2018, is $313.5 of tax benefits that, if recognized, would impact the effective income tax rate. The total amount of accrued interest and penalties as of December 31, 2018 and 2017 is $42.4 and $27.9, respectively, of which a detriment of $14.5 and $7.0 is included in our 2018 and 2017 Consolidated Statements of Operations, respectively. In accordance with our accounting policy, interest and penalties accrued on unrecognized tax benefits are classified as income taxes in our Consolidated Statements of Operations. We have various tax years under examination by tax authorities in the U.S., in various countries, and in various states, such as New York, in which we have significant business operations. It is not yet known whether these examinations will, in the aggregate, result in our paying additional taxes. We believe our tax reserves are adequate in relation to the potential for additional assessments in each of the jurisdictions in which we are subject to taxation. We regularly assess the likelihood of additional tax assessments in those jurisdictions and, if necessary, adjust our reserves as additional information or events require. With respect to all tax years open to examination by U.S. federal, various state and local, and non-U.S. tax authorities, we currently anticipate that total unrecognized tax benefits will decrease by an amount between $15.0 and $25.0 in the next twelve months, a portion of which will affect our effective income tax rate, primarily as a result of the settlement of tax examinations and the lapsing of statutes of limitations. This net decrease is related to various items of income and expense, primarily transfer pricing adjustments. We are effectively settled with respect to U.S. federal income tax audits through 2012, with the exception of 2009. With limited exceptions, we are no longer subject to state and local income tax audits for years prior to 2007 or non-U.S. income tax audits for years prior to 2009.

X
- References No definition available. + Details
Name: | us-gaap_IncomeTaxDisclosureAbstract
Namespace Prefix: | us-gaap_
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