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Income Taxes | 12 Months Ended
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Dec. 31, 2017
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes Income (loss) from continuing operations before income taxes and the (provision for) benefit from income taxes consisted of the following:
| Year ended December 31,
| 2017 |  | 2016 |  | 2015
Income (loss) from continuing operations: |  |  |  |  |
United States | $ | 68.8 |  |  | $ | 14.0 |  |  | $ | (14.2 | )
Foreign | (32.7 | ) |  | 25.4 |  |  | (140.1 | )
| $ | 36.1 |  |  | $ | 39.4 |  |  | $ | (154.3 | )
(Provision for) benefit from income taxes: |  |  |  |  |
Current: |  |  |  |  |
United States | $ | 30.4 |  |  | $ | (4.3 | ) |  | $ | 10.9 |
Foreign | (3.5 | ) |  | (4.8 | ) |  | (3.3 | )
Total current | 26.9 |  |  | (9.1 | ) |  | 7.6 |
Deferred and other: |  |  |  |  |
United States | 23.5 |  |  | 0.2 |  |  | (10.7 | )
Foreign | (2.5 | ) |  | (0.2 | ) |  | 5.8 |
Total deferred and other | 21.0 |  |  | — |  |  | (4.9 | )
Total (provision) benefit | $ | 47.9 |  |  | $ | (9.1 | ) |  | $ | 2.7 |
The reconciliation of income tax computed at the U.S. federal statutory tax rate to our effective income tax rate was as follows:
| Year ended December 31,
| 2017 |  | 2016 |  | 2015
Tax at U.S. federal statutory rate | 35.0 | % |  | 35.0 | % |  | 35.0 | %
State and local taxes, net of U.S. federal benefit | 4.4 | % |  | 5.0 | % |  | (0.1 | )%
U.S. credits and exemptions | (8.5 | )% |  | (12.9 | )% |  | 1.5 | %
Foreign earnings/losses taxed at lower rates | (14.9 | )% |  | (5.9 | )% |  | (9.0 | )%
Audit settlements with taxing authorities | (0.1 | )% |  | — | % |  | 0.7 | %
Adjustments to uncertain tax positions | (9.8 | )% |  | (1.9 | )% |  | (5.4 | )%
Changes in valuation allowance | 54.4 | % |  | 17.4 | % |  | (18.8 | )%
Tax on distributions of foreign earnings | — | % |  | 0.7 | % |  | (0.2 | )%
Worthless stock deductions and other basis adjustments | (226.3 | )% |  | — | % |  | (2.4 | )%
Disposition of dry cooling business | — | % |  | (15.6 | )% |  | — | %
U.S. tax reform | 32.6 | % |  | — | % |  | — | %
Other | 0.5 | % |  | 1.3 | % |  | 0.4 | %
| (132.7 | )% |  | 23.1 | % |  | 1.7 | %
Significant components of our deferred tax assets and liabilities were as follows:
| As of December 31,
| 2017 |  | 2016
Deferred tax assets: |  |  |
NOL and credit carryforwards | $ | 146.0 |  |  | $ | 78.2 |
Pension, other postretirement and postemployment benefits | 41.2 |  |  | 77.2 |
Payroll and compensation | 18.2 |  |  | 22.8 |
Legal, environmental and self-insurance accruals | 25.3 |  |  | 35.1 |
Working capital accruals | 11.5 |  |  | 16.4 |
Other | 17.6 |  |  | 20.7 |
Total deferred tax assets | 259.8 |  |  | 250.4 |
Valuation allowance | (110.9 | ) |  | (75.8 | )
Net deferred tax assets | 148.9 |  |  | 174.6 |
Deferred tax liabilities: |  |  |
Intangible assets recorded in acquisitions | 53.9 |  |  | 68.3 |
Basis difference in affiliates | 3.7 |  |  | 10.6 |
Accelerated depreciation | 28.8 |  |  | 40.6 |
Other | 12.9 |  |  | 6.6 |
Total deferred tax liabilities | 99.3 |  |  | 126.1 |
| $ | 49.6 |  |  | $ | 48.5 |
The Tax Cuts and Jobs Act As indicated in Note 1, on December 22, 2017, the Tax Cuts and Jobs Act was enacted which significantly changes U.S. income tax law for businesses and individuals. The Act introduces changes that impact U.S. corporate tax rates (e.g., a reduction in the top tax rate from 35% to 21%), business-related exclusions, and deductions and credits. In addition, the Act will have tax consequences for many entities that operate internationally, including the timing and the amount of tax to be paid on undistributed foreign earnings. As a result of the reduction in the federal corporate income tax rate and other legislative changes in the Act, we have revalued our net U.S. federal deferred tax assets, resulting in a charge of $11.8. Further, we considered the transition tax required for the mandatory one-time “deemed repatriation” and our preliminary analysis indicates we will not have a liability in this regard. Given the significance and number of changes required by the Act and the historical complexity of our global tax structure, we have yet to complete our analysis of the impact of the Act on our consolidated financial statements. As a result, the above net charges are based on current estimates (i.e., provisional amounts). In addition, other adjustments may be necessary to our income tax accounts to properly reflect the impact of certain provisions of the Act that have not been contemplated. For example, the potential impact of the Act on our liability for uncertain tax positions and various state tax implications of the Act have not been considered in our provisional amounts. As more guidance is issued and we better understand the full impact of the Act on our tax positions, we will finalize our analysis, with any resulting adjustments, which could be material, reflected in our 2018 consolidated financial statements. General Matters Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. We periodically assess deferred tax assets to determine if they are likely to be realized and the adequacy of deferred tax liabilities, incorporating the results of local, state, federal and foreign tax audits in our estimates and judgments. At December 31, 2017, we had the following tax loss carryforwards available: federal, state, and foreign tax loss carryforwards of approximately $27.0, $659.0, and $293.0, respectively. We also had federal and state tax credit carryforwards of $32.4. Of these amounts, $6.8 expire in 2018 and $714.0 expire at various times between 2018 and 2036. The remaining carryforwards have no expiration date. Realization of deferred tax assets, including those associated with net operating loss and credit carryforwards, is dependent upon generating sufficient taxable income in the appropriate tax jurisdiction. We believe that it is more likely than not that we may not realize the benefit of certain of these deferred tax assets and, accordingly, have established a valuation allowance against these deferred tax assets. Although realization is not assured for the remaining deferred tax assets, we believe it is more likely than not that the deferred tax assets will be realized through future taxable earnings or tax planning strategies. However, deferred tax assets could be reduced in the near term if our estimates of taxable income are significantly reduced or tax planning strategies are no longer viable. The valuation allowance increased by $35.1 in 2017 and increased by $4.9 in 2016. The 2017 increase was driven by the losses generated during the year for our large power projects in South Africa and the impact of the Act on the realization of certain deferred tax assets. The amount of income tax that we pay annually is dependent on various factors, including the timing of certain deductions. These deductions can vary from year to year, and, consequently, the amount of income taxes paid in future years will vary from the amounts paid in prior years. Unrecognized Tax Benefits As of December 31, 2017, we had gross and net unrecognized tax benefits of $31.3 and $20.6, respectively. Of these net unrecognized tax benefits, $15.7 would impact our effective tax rate from continuing operations if recognized. Similarly, at December 31, 2016 and 2015, we had gross unrecognized tax benefits of $37.9 (net unrecognized tax benefits of $25.2) and $48.8 (net unrecognized tax benefits of $30.1), respectively. We classify interest and penalties related to unrecognized tax benefits as a component of our income tax (provision) benefit. As of December 31, 2017, gross accrued interest totaled $3.9 (net accrued interest of $2.5), while the related amounts as of December 31, 2016 and 2015 were $3.7 (net accrued interest of $2.4) and $5.4 (net accrued interest of $4.5), respectively. Our income tax (provision) benefit for the years ended December 31, 2017, 2016 and 2015 included gross interest income (expense) of $(0.2), $1.8 and $0.2, respectively, resulting from adjustments to our liability for uncertain tax positions. As of December 31, 2017, 2016 and 2015, we had no accrual for penalties included in our unrecognized tax benefits. Based on the outcome of certain examinations or as a result of the expiration of statutes of limitations for certain jurisdictions, we believe that within the next 12 months it is reasonably possible that our previously unrecognized tax benefits could decrease by approximately $3.0 to $15.0. The previously unrecognized tax benefits relate to a variety of tax matters including deemed income inclusions, transfer pricing and various state matters. The aggregate changes in the balance of unrecognized tax benefits for the years ended December 31, 2017, 2016 and 2015 were as follows:
| Year ended December 31,
| 2017 |  | 2016 |  | 2015
Unrecognized tax benefit — opening balance | $ | 37.9 |  |  | $ | 48.8 |  |  | $ | 63.3 |
Gross increases — tax positions in prior period | 1.6 |  |  | 3.6 |  |  | 14.1 |
Gross decreases — tax positions in prior period | (0.3 | ) |  | (9.3 | ) |  | (7.6 | )
Gross increases — tax positions in current period | 0.3 |  |  | 0.7 |  |  | 11.3 |
Settlements | (1.3 | ) |  | — |  |  | — |
Lapse of statute of limitations | (7.1 | ) |  | (5.9 | ) |  | (4.4 | )
Gross decreases — Spin-Off | — |  |  | — |  |  | (26.7 | )
Change due to foreign currency exchange rates | 0.2 |  |  | — |  |  | (1.2 | )
Unrecognized tax benefit — ending balance | $ | 31.3 |  |  | $ | 37.9 |  |  | $ | 48.8 |
Other Tax Matters During 2017, our income tax benefit was impacted most significantly by (i) a tax benefit of $77.6 related to a worthless stock deduction in the U.S. associated with our investment in a South African subsidiary and (ii) $4.9 of tax benefits related to various audit settlements, statute expirations, and other adjustments to liabilities for uncertain tax positions, partially offset by (iii) $11.8 of net tax charges associated with the impact of the new U.S. tax regulations described more fully above and (iv) $68.2 of foreign losses generated during the period for which no foreign tax benefit was recognized as future realization of any such foreign tax benefit is considered unlikely. During 2016, our income tax provision was impacted most significantly by (i) the $0.3 of income taxes provided in connection with the $18.4 gain that was recorded on the sale of the dry cooling business, (ii) $13.7 of foreign losses generated during the period for which no tax benefit was recognized as future realization of any such tax benefit is considered unlikely, and (iii) $2.4 of tax benefits related to various audit settlements, statute expirations, and other adjustments to liabilities for uncertain tax positions. During 2015, our income tax benefit was impacted most significantly by (i) the effects of approximately $139.0 of foreign losses generated during the year for which no tax benefit was recognized, as future realization of any such tax benefit is considered unlikely, (ii) $3.7 of foreign taxes incurred during the year related to the Spin-Off and the reorganization actions undertaken to facilitate the Spin-Off, and (iii) $3.4 of taxes related to various audit settlements, statute expirations, and other adjustments to liabilities for uncertain tax positions. We perform reviews of our income tax positions on a continuous basis and accrue for potential uncertain positions when we determine that an uncertain position meets the criteria of the Income Taxes Topic of the Codification. Accruals for these uncertain tax positions are recorded in “Income taxes payable” and “Deferred and other income taxes” in the accompanying consolidated balance sheets based on the expectation as to the timing of when the matters will be resolved. As events change and resolutions occur, these accruals are adjusted, such as in the case of audit settlements with taxing authorities. We have filed our federal income tax returns for the 2014, 2015, and 2016 tax years and those returns are subject to examination. With regard to all open tax years, we believe any contingencies are adequately provided for. State income tax returns generally are subject to examination for a period of three to five years after filing the respective tax returns. The impact on such tax returns of any federal changes remains subject to examination by various states for a period of up to one year after formal notification to the states. We have various state income tax returns in the process of examination. We believe any uncertain tax positions related to these examinations have been adequately provided for. We have various foreign income tax returns under examination. The most significant of these are in Germany for the 2010 through 2014 tax years. We believe that any uncertain tax positions related to these examinations have been adequately provided for. An unfavorable resolution of one or more of the above matters could have a material adverse effect on our results of operations or cash flows in the quarter and year in which an adjustment is recorded or the tax is due or paid. As audits and examinations are still in process, the timing of the ultimate resolution and any payments that may be required for the above matters cannot be determined at this time.

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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 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
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