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Income Taxes | 12 Months Ended
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Dec. 31, 2017
Income Taxes [Abstract] |
Income Taxes | 9. Income Taxes The provision for income taxes for continuing operations was as follows:
(In thousands) |  | 2017 |  |  | 2016 |  |  | 2015 |
Currently payable: |  |  |  |  |  |  |  |  |
Federal (1) |  | $ | 15,513 |  |  | $ | 12,145 |  |  | $ | 20,794 |
State |  |  | 642 |  |  |  | 2,631 |  |  |  | 2,936 |
Foreign |  |  | 25,254 |  |  |  | 19,168 |  |  |  | 23,873 |
|  |  | 41,409 |  |  |  | 33,944 |  |  |  | 47,603 |
Deferred (benefit) expense: |  |  |  |  |  |  |  |  |  |  |  |
Federal |  |  | 18,458 |  |  |  | 7,630 |  |  |  | 5,779 |
State |  |  | 215 |  |  |  | 1,656 |  |  |  | (772 | )
Foreign |  |  | (1,259 | ) |  |  | 1,142 |  |  |  | (10,461 | )
|  |  | 17,414 |  |  |  | 10,428 |  |  |  | (5,454 | )
Income taxes |  | $ | 58,823 |  |  | $ | 44,372 |  |  | $ | 42,149 |
| (1) | This amount includes $7.4 million related to the one-time transition tax on earnings of foreign subsidiaries enacted by the 2017 Tax Legislation (See discussion below). Approximately $5.1 million of this amount is reported in Other liabilities on the Consolidated Balance Sheet at December 31, 2017.
The tax effects of temporary differences that give rise to significant portions of deferred tax assets and liabilities consisted of the following:
(in thousands) |  | 2017 |  |  | 2016 |
Deferred tax assets: |  |  |  |  |  |
Benefit plans |  | $ | 8,440 |  |  | $ | 11,040 |
Liabilities and reserves |  |  | 11,141 |  |  |  | 15,733 |
Operating loss and credit carryovers |  |  | 40,164 |  |  |  | 49,778 |
Other |  |  | 1,007 |  |  |  | 3,181 |
Gross deferred tax assets |  |  | 60,752 |  |  |  | 79,732 |
Valuation allowance |  |  | (38,366 | ) |  |  | (35,426 | )
Deferred tax assets |  |  | 22,386 |  |  |  | 44,306 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
Property, plant and equipment |  |  | (12,458 | ) |  |  | (1,186 | )
Other assets |  |  | - |  |  |  | (353 | )
Goodwill |  |  | (20,345 | ) |  |  | (27,863 | )
Other |  |  | (422 | ) |  |  | (12,434 | )
Deferred tax liabilities |  |  | (33,225 | ) |  |  | (41,836 | )
Net deferred tax (liabilities) assets |  | $ | (10,839 | ) |  | $ | 2,470 |
At December 31, 2017, foreign operating loss carryovers were $116.8 million. Included in the foreign operating loss carryovers are losses of $25.0 million that expire through 2032, and $91.8 million that do not have an expiration date. At December 31, 2017, state operating loss carryovers were $138.7 million, all of which expire through 2032. The effective tax rate for continuing operations differed from the statutory federal income tax rate of 35% as described below:
|  | 2017 |  |  | 2016 |  |  | 2015 |
Taxes at statutory rate |  |  | 35.0 | % |  |  | 35.0 | % |  |  | 35.0 | %
State income taxes, net of federal income tax benefit |  |  | 0.3 |  |  |  | 1.4 |  |  |  | 1.7 |
Tax credits |  |  | (1.1 | ) |  |  | (1.8 | ) |  |  | (0.7 | )
Taxes on foreign earnings |  |  | 0.2 |  |  |  | (4.4 | ) |  |  | (0.8 | )
Resolution of prior years’ tax matters |  |  | 0.1 |  |  |  | - |  |  |  | (0.3 | )
U.S. manufacturing deduction |  |  | (1.4 | ) |  |  | (2.0 | ) |  |  | (1.9 | )
Valuation allowance adjustments |  |  | - |  |  |  | (0.3 | ) |  |  | (5.0 | )
2017 Tax Legislation |  |  | 12.4 |  |  |  | - |  |  |  | - |
Loss on foreign branch remittances |  |  | (5.2 | ) |  |  | - |  |  |  | - |
Other, net |  |  | (0.7 | ) |  |  | (1.4 | ) |  |  | 0.2 |
Effective tax rate |  |  | 39.6 | % |  |  | 26.5 | % |  |  | 28.2 | %
On December 22, 2017, the U.S. enacted the Tax Cuts and Jobs Act (the “Act”). The Act, which is also commonly referred to as “2017 Tax Legislation”, significantly changes the U.S. corporate income tax laws by reducing the U.S. corporate income tax rate to 21% beginning in 2018 and imposing a one-time mandatory tax on previously deferred foreign earnings of U.S. subsidiaries in 2017. Staff Accounting Bulletin No. 118 (“SAB 118”) was issued to address the application of U.S. 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. In accordance with SAB 118, the Company recorded a net charge of $18.4 million during the fourth quarter of 2017. The amount consists of reassessing the U.S. deferred tax assets and liabilities, adjustments to the Company’s tax credit carryover, and the one-time mandatory tax on previously deferred foreign earnings of U.S. subsidiaries. Although the Company believes that the $18.4 million is a reasonable estimate of the current year impact of the 2017 Tax Legislation, it should be considered a provisional estimate. The Company expects additional guidance on the 2017 Tax Legislation in 2018, and will finalize certain tax positions when it files its 2017 U.S. tax return. The ultimate impact could differ from these provisional amounts, possibly materially, due to, additional guidance, changes in interpretation, additional analysis and assumptions the Company has made. Any adjustments to the provisional estimate will be reported in income tax expense in the reporting period in which any such adjustments are determined, which will be no later than the fourth quarter of 2018. The loss on remittances is the result of the cumulative foreign currency effect related to certain repatriation transactions. Taxes on foreign earnings include the difference between the tax rates applied to foreign earnings relative to the U.S. statutory tax rate, accruals for foreign unrecognized tax benefits, and the impact of the U.S. foreign tax credit. The impact on the Company’s effective tax rate varies from year to year based on the mix of earnings, increases in foreign unrecognized tax benefits, and the expected realization of U.S. foreign tax credits generated each year. The increase of the 2017 effective tax rate from taxes on foreign earnings compared to 2016 is primarily the result of the non-deductible losses from the sale of the European Natural Ingredients business (See Note 12, Restructuring Charges), and the sale of the business lines in Strasbourg, France (See Note 14, Divestiture). The 2015 reduction in the effective tax rate from the valuation allowance adjustments is the result of a tax audit settlement and a change in projections on the utilization of certain deferred tax assets. Earnings from continuing operations before income taxes were as follows:
(In thousands) |  | 2017 |  |  | 2016 |  |  | 2015 |
United States |  | $ | 88,479 |  |  | $ | 96,963 |  |  | $ | 87,749 |
Foreign |  |  | 59,944 |  |  |  | 70,322 |  |  |  | 61,647 |
Total |  | $ | 148,423 |  |  | $ | 167,285 |  |  | $ | 149,396 |
Federal and state income taxes are provided on international subsidiary income distributed to or taxable in the U.S. during the year. At December 31, 2017, no additional income or withholding taxes have been provided for any remaining undistributed earnings not subject to the transition tax, or any additional outside basis difference, inherent in these entities, as these amounts are considered to be invested indefinitely. Determination of the deferred tax liability on such earnings is not practicable. A reconciliation of the change in the liability for unrecognized tax benefits for 2017 and 2016 is as follows:
(in thousands) |  | 2017 |  |  | 2016 |
Balance at beginning of year |  | $ | 4,947 |  |  | $ | 4,963 |
Increases for tax positions taken in the current year |  |  | 871 |  |  |  | 570 |
Increases for tax positions taken in prior years |  |  | 553 |  |  |  | 1,204 |
Decreases related to settlements with tax authorities |  |  | (76 | ) |  |  | (1,172 | )
Decreases as a result of lapse of the applicable statutes of limitations |  |  | (607 | ) |  |  | (426 | )
Foreign currency exchange rate changes |  |  | 588 |  |  |  | (192 | )
Balance at the end of year |  | $ | 6,276 |  |  | $ | 4,947 |
The amount of the unrecognized tax benefits that would affect the effective tax rate, if recognized, was approximately $4.5 million. The Company recognizes interest and penalties related to the unrecognized tax benefits in income tax expense. As of December 31, 2017 and 2016, $0.5 million and $0.4 million, respectively, of accrued interest and penalties were reported as an income tax liability in each period. The liability for unrecognized tax benefits relates to multiple jurisdictions and is reported in Other liabilities on the Company’s Consolidated Balance Sheet at December 31, 2017. The Company believes that it is reasonably possible that the total amount of liability for unrecognized tax benefits as of December 31, 2017, will decrease by approximately $1.6 million during 2018, of which $0.8 million is estimated to impact the effective tax rate. The potential decrease relates to various tax matters for which the statute of limitations may expire or will be otherwise settled in 2018. The amount that is ultimately recognized in the financial statements will be dependent upon various factors including potential increases or decreases in unrecognized tax benefits as a result of examinations, settlements, and other unanticipated items that may occur during the year. With limited exceptions, the Company is no longer subject to federal, state, and local, or non-U.S. income tax examinations by tax authorities for years before 2013.

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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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