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Income Taxes | 12 Months Ended
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Dec. 31, 2018
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes
(In thousands) | 2018 |  | 2017 |  | 2016
Components of income (loss) before income taxes* |  |  |  |  |
U.S. income (loss) | $ | 85,234 |  |  | $ | (20,555 | ) |  | $ | 100,382 |
Non-U.S. income | 77,101 |  |  | 50,330 |  |  | 51,529 |
Income before income taxes | 162,335 |  |  | 29,775 |  |  | 151,911 |
Provision for income taxes* |  |  |  |  |
Current |  |  |  |  |
Federal | $ | 13,574 |  |  | $ | 22,272 |  |  | $ | 19,968 |
State | 4,265 |  |  | 813 |  |  | 2,231 |
Non-U.S. | 23,446 |  |  | 11,054 |  |  | 21,188 |
Total current provision | 41,285 |  |  | 34,139 |  |  | 43,387 |
Deferred |  |  |  |  |
Federal | $ | 291 |  |  | $ | (26,931 | ) |  | $ | 11,580 |
State | (1,604 | ) |  | (3,630 | ) |  | 1,977 |
Non-U.S. | (2,752 | ) |  | (759 | ) |  | 860 |
Total deferred (benefit) provision | (4,065 | ) |  | (31,320 | ) |  | 14,417 |
Provision for income taxes | $ | 37,220 |  |  | $ | 2,819 |  |  | $ | 57,804 |
*The components of income before income taxes and the provision for income taxes relate to continuing operations. The Company elected to treat Global Intangible Low Taxed Income (“GILTI”), which was effective in 2018 for the Company, as a period cost. The Tax Cuts and Jobs Act of 2017 ("the Act"), which was signed into law on December 22, 2017, has resulted in significant changes to the U.S. corporate income tax system including reducing the U.S. corporate rate to 21% starting in 2018. The Act also creates a territorial tax system with a one-time mandatory tax on previously deferred foreign earnings of U.S. subsidiaries. On December 22, 2017, SAB 118 was issued to address the application of US GAAP in situations when a registrant does not have the necessary information available, prepared or analyzed in reasonable detail to complete the accounting for certain income tax effects of the Act. In accordance with SAB 118, the Company calculated its best estimate of the impact of the Act and recorded income tax expense of $19.8 million during the fourth quarter of 2017, the period in which the legislation was enacted. Of this amount, $18.0 million related to the one-time transition tax and the remaining $1.8 million was related to the revaluation of U.S. deferred tax assets and liabilities. The company previously considered the earnings in non-U.S. subsidiaries to be indefinitely reinvested and, accordingly, recorded no deferred income taxes. As as result of the Act, among other things, the Company determined it will repatriate earnings for all non-U.S. subsidiaries with cash in excess of working capital needs. The Company has estimated the associated tax to be $1.9 million, offset partially by $0.7 million of foreign tax credits. At December 31, 2018, the Company has now completed its accounting for all of the enactment-date income tax effects of the Act. Accordingly, we reduced our estimate for the one-time transition tax by $2.0 million and increased our estimate for the revaluation of U.S. deferred tax assets and liabilities by $2.5 million and a $2.0 million increase associated with prepaid taxes for updated regulations related to the Act. 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 2017, the Company recognized a benefit of $2.5 million associated with the reduction of exit taxes related to our European reorganization compared to incurring charges of $6.5 million in 2016 related to the European reorganization. During 2018, the Company recorded $1.8 million of foreign income tax reserves related to the legal and operational realignment of our U.S., Canadian and European operations. Included in discontinued operations is tax expense of $0.3 million in 2016. There were no discontinued operations in 2018 or 2017. Reconciliation of the U.S. federal income tax rates for continuing operations to our effective tax rate:
| 2018 |  | 2017 |  | 2016
U.S. federal income tax rate | 21.0 | % |  | 35.0 | % |  | 35.0 | %
U.S. tax reform | 1.6 | % |  | 66.6 | % |  | — | %
State income taxes—U.S. | 1.3 | % |  | (6.2 | )% |  | 1.8 | %
Taxes on non-U.S. income - U.S., Canadian & European reorganization | 1.1 | % |  | (8.4 | )% |  | 4.3 | %
Valuation allowances | 0.5 | % |  | (3.3 | )% |  | 1.5 | %
Taxes on non-U.S. income | 0.4 | % |  | (24.6 | )% |  | (2.5 | )%
Employee share-based payments | (1.6 | )% |  | (28.0 | )% |  | — | %
Manufacturing deduction credit | (1.0 | )% |  | (15.3 | )% |  | (1.3 | )%
Research and development credit | (0.9 | )% |  | (4.7 | )% |  | (0.6 | )%
Other | 0.5 | % |  | (1.6 | )% |  | (0.1 | )%
Effective income tax rate | 22.9 | % |  | 9.5 | % |  | 38.1 | %
Components of deferred tax assets and liabilities:
| December 31,
(In thousands) | 2018 |  | 2017
Deferred tax assets |  |  |
Product liability | $ | 31,169 |  |  | $ | 28,481 |
Capitalized research and development | 10,938 |  |  | 2,442 |
Employee benefits | 9,641 |  |  | 6,401 |
Net operating losses and tax credit carryforwards | 7,845 |  |  | 10,013 |
Share-based compensation | 5,561 |  |  | 6,444 |
Accrued expenses and other reserves | 4,385 |  |  | 4,237 |
Other | 4,056 |  |  | 2,691 |
Total deferred tax assets | 73,595 |  |  | 60,709 |
Valuation allowances | (5,039 | ) |  | (4,559 | )
Net deferred tax assets | 68,556 |  |  | 56,150 |
Deferred tax liabilities |  |  |
Goodwill and intangibles | (31,290 | ) |  | (30,368 | )
Property, plant and equipment | (9,555 | ) |  | (8,056 | )
Other | (2,353 | ) |  | (1,242 | )
Total deferred tax liabilities | (43,198 | ) |  | (39,666 | )
Net deferred taxes | $ | 25,358 |  |  | $ | 16,484 |
At December 31, 2018, we had net operating loss carryforwards of approximately $29.5 million, all of which are in non-U.S. tax jurisdictions. All net operating loss carryforwards without a valuation allowance may be carried forward for a period of at least six years. The change in valuation allowance for the year of $0.5 million is primarily due to our inability to recognize deferred tax assets on certain foreign entities that continue to generate losses partially offset by the release of a valuation allowance on certain losses. A reconciliation of the change in the tax liability for unrecognized tax benefits for the years ended December 31, 2018 and 2017 is as follows:
(In thousands) | 2018 |  | 2017
Beginning balance | $ | 15,055 |  |  | $ | 14,393 |
Adjustments for tax positions related to the current year | 1,869 |  |  | 1,921 |
Adjustments for tax positions related to prior years | (32 | ) |  | (766 | )
Statute expiration | (737 | ) |  | (493 | )
Ending balance | $ | 16,155 |  |  | $ | 15,055 |
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 $5.2 million and $5.5 million at December 31, 2018 and 2017, 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 $3.3 million and $2.2 million at December 31, 2018 and 2017, respectively. 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 2014 tax year closed by statute. Various state and foreign income tax returns may be subject to tax audits for periods after 2010.

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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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
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