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Income Taxes | 9 Months Ended
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Sep. 30, 2018
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes For the three and nine months ended September 30, 2018, we recognized income tax expense of $32.3 million and $46.1 million, respectively, representing an effective tax rate of 27.3% and 28.2%, respectively. The effective tax rate was impacted by the following significant factors:
• | We recognized income tax expense of $3.8 million and $4.3 million, respectively, in the three and nine months ended September 30, 2018 as a result of changes in our valuation allowance for the “Tax Cuts and Jobs Act” (the Act). The amount of this adjustment remains provisional under Staff Accounting Bulletin No. 118 (SAB 118) as of the date of this report.
• | We recognized income tax expense of $1.8 million in the nine months ended September 30, 2018 as a result of a change in our valuation allowance on foreign tax credits associated with our euro debt refinancing.
• | We recognized an income tax benefit of $3.3 million and $4.4 million, respectively, in the three and nine months ended September 30, 2018 primarily related to certain foreign tax credits.
• | We recognized an income tax benefit of $1.2 million in the nine months ended September 30, 2018 due to a decrease in reserves for uncertain tax positions of prior years.
On December 22, 2017, the Act was signed into law, making significant changes to the Internal Revenue Code. Changes include, but are not limited to, a corporate tax rate decrease from 35% to 21% effective for tax years beginning after December 31, 2017, the transition of U.S. international taxation from a worldwide tax system to a territorial tax system, and a one-time transition tax on the mandatory deemed repatriation of cumulative foreign earnings as of December 31, 2017. 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 (including computations) in reasonable detail to complete the accounting for certain income tax effects of the Act. The issuance of proposed regulations regarding GILTI and the one-time transition tax on the mandatory deemed repatriation of foreign earnings as well as the IRS notice addressing IRC section 162(m) has resulted in refinements to the provisional amounts initially recorded for the valuation allowance on certain foreign tax credits in 2017, certain covered employee compensation associated with the amendments to IRC section 162(m), the one-time transition tax on the mandatory deemed repatriation of foreign earnings and the estimated tax expense associated with the GILTI taxable inclusion. As a result, we recorded an adjustment to the valuation allowance on certain foreign tax credits and an adjustment to the deferred tax asset associated with certain covered employee compensation. Additional work is still necessary for a more detailed analysis of all provisional amounts associated with the Act including the remeasurement of certain deferred tax assets and liabilities, the one-time transition tax on the mandatory deemed repatriation of foreign earnings, the valuation allowance on certain foreign tax credits, and the non-deductibility of certain covered employee compensation associated with the amendments to IRC section 162(m). The transition tax on the mandatory deemed repatriation of foreign earnings will be finalized in the fourth quarter 2018 when the tax return is filed, and any subsequent adjustment to all other provisional amounts will be recorded to tax expense in the fourth quarter 2018 when the analysis is complete. All adjustments related to the Act remain provisional as of the date of this report. Our income tax expense and effective tax rate in future periods may be impacted by many factors, including our geographic mix of income and changes in tax laws. We recognized an income tax benefit of $11.1 million and $6.7 million for the three and nine months ended October 1, 2017, respectively, representing effective tax rates of 109.3% and (12.0)%, respectively. The effective tax rates were impacted by the following significant factors:
• | We recognized an income tax benefit of $2.5 million and $8.4 million in the three and nine months ended October 1, 2017, respectively, as a result of the implementation of a foreign tax credit planning strategy.
• | Foreign tax rate differences reduced our income tax expense by approximately $1.4 million and $8.4 million in the three and nine months ended October 1, 2017, respectively. The statutory tax rates associated with our foreign earnings generally are lower than the 2017 statutory U.S. tax rate of 35%. This had the greatest impact on our income before taxes that is generated in Germany, Canada, and the Netherlands, which have statutory tax rates of approximately 28%, 26%, and 25%, respectively.
• | We also recognized an income tax benefit of $6.4 million and $11.7 million in the three and nine months ended October 1, 2017, respectively, related to non-taxable currency translation gains.
All other items impacting the effective tax rate represented a net expense of $2.6 million and $2.3 million in the three and nine months ended October 1, 2017, respectively.

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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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