XML 32 R17.htm IDEA: XBRL DOCUMENT
v3.6.0.2

Income Taxes | 12 Months Ended
--- | ---
Dec. 31, 2016
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes
(In thousands) | 2016 |  | 2015 |  | 2014
Components of income before income taxes* |  |  |  |  |
U.S. income | $ | 100,382 |  |  | $ | 71,547 |  |  | $ | 58,209 |
Non-U.S. income | 51,529 |  |  | 39,479 |  |  | 68,986 |
Income before income taxes | 151,911 |  |  | 111,026 |  |  | 127,195 |
Provision for income taxes* |  |  |  |  |
Current |  |  |  |  |
Federal | $ | 19,968 |  |  | $ | 21,253 |  |  | $ | 23,659 |
State | 2,231 |  |  | 2,389 |  |  | 1,349 |
Non-U.S. | 21,188 |  |  | 22,979 |  |  | 21,101 |
Total current provision | 43,387 |  |  | 46,621 |  |  | 46,109 |
Deferred |  |  |  |  |
Federal | $ | 11,580 |  |  | $ | 3,813 |  |  | $ | (3,650 | )
State | 1,977 |  |  | (213 | ) |  | 317 |
Non-U.S. | 860 |  |  | (5,814 | ) |  | (1,732 | )
Total deferred provision | 14,417 |  |  | (2,214 | ) |  | (5,065 | )
Provision for income taxes | $ | 57,804 |  |  | $ | 44,407 |  |  | $ | 41,044 |
*The components of income before income taxes and the provision for income taxes relate to continuing operations. MSA finalized its European reorganization during 2016. The reorganization is designed to drive optimal performance by aligning certain strategic planning and decision making into a single location enabled by a common IT platform. During 2016, the Company incurred $6.5 million of charges associated with exit taxes related to our European reorganization compared to $7.7 million in 2015. Included in discontinued operations is tax expense of $0.3 million in 2016, $0.6 million in 2015 and $0.6 million in 2014. Cash flows from operations in the Consolidated Statement of Cash Flows includes an insignificant deferred income tax provision (benefit) from discontinued operations for 2016, compared to $0.5 million and $(0.3) million in 2015 and 2014, respectively. Reconciliation of the U.S. federal income tax rates for continuing operations to our effective tax rate:
| 2016 |  | 2015 |  | 2014
U.S. federal income tax rate | 35.0 | % |  | 35.0 | % |  | 35.0 | %
Taxes on non-U.S. income - European reorganization | 4.3 |  |  | 6.9 |  |  | — |
State income taxes—U.S. | 1.8 |  |  | 1.3 |  |  | 0.8 |
Valuation allowances | 1.5 |  |  | 1.7 |  |  | (0.6 | )
Taxes on non-U.S. income | (2.5 | ) |  | (2.1 | ) |  | (2.2 | )
Manufacturing deduction credit | (1.3 | ) |  | (1.6 | ) |  | (1.0 | )
Research and development credit | (0.6 | ) |  | (1.1 | ) |  | (0.7 | )
Other | (0.1 | ) |  | (0.1 | ) |  | 1.0 |
Effective income tax rate | 38.1 | % |  | 40.0 | % |  | 32.3 | %
Components of deferred tax assets and liabilities:
| December 31,
(In thousands) | 2016 |  | 2015
Deferred tax assets |  |  |
Accrued expenses and other reserves | $ | 5,381 |  |  | $ | 4,412 |
Product liability | 1,303 |  |  | 6,116 |
Employee benefits | 9,538 |  |  | 9,387 |
Share-based compensation | 10,462 |  |  | 10,323 |
Reserve for doubtful accounts | 1,178 |  |  | 2,279 |
Inventory | 1,218 |  |  | 2,496 |
Capitalized research and development | 4,654 |  |  | 5,339 |
Net operating losses and tax credit carryforwards | 16,218 |  |  | 15,310 |
Other | 1,316 |  |  | 2,892 |
Total deferred tax assets | 51,268 |  |  | 58,554 |
Valuation allowances | (5,303 | ) |  | (5,153 | )
Net deferred tax assets | 45,965 |  |  | 53,401 |
Deferred tax liabilities |  |  |
Goodwill and intangibles | (42,007 | ) |  | (42,867 | )
Property, plant and equipment | (11,394 | ) |  | (8,920 | )
Other | (3,368 | ) |  | (31 | )
Total deferred tax liabilities | (56,769 | ) |  | (51,818 | )
Net deferred taxes | $ | (10,804 | ) |  | $ | 1,583 |
At December 31, 2016, we had net operating loss carryforwards of approximately $37.2 million, all of which are in non-U.S. tax jurisdictions. Net operating loss carryforwards without a valuation allowance of $0.1 million will expire in 2017. The remainder either have a valuation allowance or may be carried forward for a period of at least six years. The change in valuation allowance for the year of $0.2 million is primarily due to our inability to recognize deferred tax assets on certain foreign entities that continue to generate losses. No deferred U.S. income taxes have been provided on undistributed earnings of non-U.S. subsidiaries, which amounted to $422.3 million as of December 31, 2016. These earnings are considered to be reinvested for an indefinite period of time. Because we currently do not have any plans to repatriate these funds, we cannot determine the impact of local taxes, withholding taxes and foreign tax credits associated with the future repatriation of such earnings and, therefore, cannot reasonably estimate the associated tax liability. In cases where we intend to repatriate a portion of the undistributed earnings of our foreign subsidiaries, we provide U.S. income taxes on such earnings. A reconciliation of the change in the tax liability for unrecognized tax benefits for the years ended December 31, 2016 and 2015 is as follows:
(In thousands) | 2016 |  | 2015
Beginning balance | $ | 13,070 |  |  | $ | 9,857 |
Adjustments for tax positions related to the current year | 2,359 |  |  | 8,203 |
Adjustments for tax positions related to prior years | (856 | ) |  | (4,887 | )
Statute expiration | (180 | ) |  | (103 | )
Ending balance | $ | 14,393 |  |  | $ | 13,070 |
The total amount of unrecognized tax benefits, if recognized, would reduce our future effective tax rate. We have recognized tax benefits associated with these liabilities in the amount of $4.3 million and $2.1 million at December 31, 2016 and 2015, respectively. We recognize interest related to unrecognized tax benefits in interest expense and penalties in operating expenses. Our liability for accrued interest and penalties related to uncertain tax positions was $0.9 million at December 31, 2015. During 2016, we increased interest related to uncertain tax positions by $0.6 million. Our liability for accrued interest and penalties related to uncertain tax positions was $1.5 million at December 31, 2016. We file a U.S. federal income tax return along with various state and foreign income tax returns. Examinations of our U.S. federal returns have been completed through 2013, with the 2012 tax year closed by statute. Various state and foreign income tax returns may be subject to tax audits for periods after 2010.

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://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
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration