v3.10.0.1

Income Taxes | 6 Months Ended
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Jun. 30, 2018
Accrued Income Taxes [Abstract] |
Income Taxes | Income Taxes Income tax expense attributable to our loss from continuing operations before income taxes differs from the amounts computed using the applicable income tax rate as a result of the following factors:
| Three months ended |  | Six months ended
| June 30, |  | June 30,
| 2018 |  | 2017 |  | 2018 |  | 2017
| in millions
Computed “expected” tax benefit (expense) (a) | $ | (109.4 | ) |  | $ | 133.3 |  |  | $ | 15.0 |  |  | $ | 188.0 |
Mandatory Repatriation Tax (b) | 242.0 |  |  | — |  |  | (968.5 | ) |  | — |
Change in valuation allowances (b) (c): |  |  |  |  |  |  |
Expense | 18.9 |  |  | (102.2 | ) |  | (16.1 | ) |  | (169.6 | )
Benefit | (131.2 | ) |  | (2.0 | ) |  | 422.1 |  |  | 10.0 |
Basis and other differences in the treatment of items associated with investments in subsidiaries and affiliates (c): |  |  |  |  |  |  |
Expense | (91.4 | ) |  | (41.3 | ) |  | (146.6 | ) |  | (80.8 | )
Benefit | (0.4 | ) |  | (0.1 | ) |  | 3.3 |  |  | 0.3 |
Non-deductible or non-taxable foreign currency exchange results (c): |  |  |  |  |  |  |
Expense | 78.0 |  |  | (103.4 | ) |  | (4.9 | ) |  | (132.5 | )
Benefit | 71.3 |  |  | 3.0 |  |  | 73.6 |  |  | 4.3 |
Non-deductible or non-taxable interest and other items (c): |  |  |  |  |  |  |
Expense | (15.0 | ) |  | (5.7 | ) |  | (41.8 | ) |  | (52.6 | )
Benefit | 9.3 |  |  | 10.0 |  |  | 22.4 |  |  | 18.8 |
International rate differences (c) (d): |  |  |  |  |  |  |
Expense | (13.5 | ) |  | (3.5 | ) |  | (22.6 | ) |  | (19.1 | )
Benefit | 15.5 |  |  | 41.4 |  |  | 31.2 |  |  | 75.3 |
Other, net | 18.7 |  |  | 1.8 |  |  | 15.7 |  |  | 7.5 |
Total income tax benefit (expense) | $ | 92.8 |  |  | $ | (68.7 | ) |  | $ | (617.2 | ) |  | $ | (150.4 | )
_______________
(a) | The statutory or “expected” tax rates are U.K. rates of 19.0% for the 2018 periods and 19.25% for the 2017 periods. The statutory rate for the 2017 periods represents the blended rate in effect for the year ended December 31, 2017 based on the 20.0% statutory rate that was in effect for the first quarter of 2017 and the 19.0% statutory rate that was in effect for the remainder of 2017.
(b) | As further discussed below, the liability we have recorded for the Mandatory Repatriation Tax (as defined and described below) is significantly lower than the amount included in our income tax expense due primarily to the expected use of carryforward tax attributes in the U.S., all of which were subject to valuation allowances prior to the initial recognition of the Mandatory Repatriation Tax during the first quarter of 2018.
(c) | Country jurisdictions giving rise to income tax benefits are grouped together and shown separately from country jurisdictions giving rise to income tax expenses.
(d) | Amounts reflect adjustments (either a benefit or an expense) to the “expected” tax benefit for statutory rates in jurisdictions in which we operate outside of the U.K.
The Tax Cuts and Jobs Act (the 2017 U.S. Tax Act) was signed into law on December 22, 2017. In addition to lowering the U.S. corporate tax rate from 35% to 21% effective January 1, 2018, the 2017 U.S. Tax Act contains significant changes to the U.S. income tax regime, including (i) changes to the formation and use of net operating losses incurred after December 31, 2017, (ii) changes to the income tax deductibility of certain business expenses, including interest expense and compensation paid to certain executive officers, (iii) the imposition of taxes on a one-time deemed mandatory repatriation of earnings and profits of foreign corporations (the Mandatory Repatriation Tax) and (iv) a new tax on global intangible low-taxed income. The Mandatory Repatriation Tax requires that the aggregate post-1986 earnings and profits of our foreign corporations be included in our U.S. taxable income. The one-time repatriation of undistributed foreign earnings and profits is then taxed at a rate of 15.5% for cash earnings and 8% for non-cash earnings, both as defined in the 2017 U.S. Tax Act, and is payable, interest free, over an eight year period according to a prescribed payment schedule with 45% of the tax due in the last two years. At June 30, 2018, we have recorded an estimate of our liability for the Mandatory Repatriation Tax of $289.6 million after considering the expected use of carryforward tax attributes and other filing positions. Our estimate is subject to change during the remaining quarters of 2018 as we continue to refine the complex calculations, review various historical transactions and analyze substantial information that supports our ownership structure and the operating history of our foreign subsidiaries, as well as evaluate recent guidance from the tax authorities on the application of the tax laws underlying the Mandatory Repatriation Tax. At June 30, 2018, our unrecognized tax benefits of $585.1 million included $425.9 million of tax benefits that would have a favorable impact on our effective income tax rate if ultimately recognized, after considering amounts that we would expect to be offset by valuation allowances and other factors. During the next 12 months, it is reasonably possible that the resolution of ongoing examinations by tax authorities, as well as the expiration of statutes of limitation, could result in reductions to our unrecognized tax benefits related to tax positions taken as of June 30, 2018. The amount of any such reductions could range up to $125.0 million, all of which would have a positive impact on our effective tax rate. Other than the potential impacts of these ongoing examinations and the expected expiration of certain statutes of limitation, we do not expect any material changes to our unrecognized tax benefits during the next 12 months. No assurance can be given as to the nature or impact of any changes in our unrecognized tax positions during the next 12 months. We are currently undergoing income tax audits in Belgium, the Netherlands and the U.S. Except as noted below, any adjustments that might arise from the foregoing examinations are not expected to have a material impact on our consolidated financial position or results of operations. In the U.S., we have received notices of adjustment from the Internal Revenue Service with respect to our 2009 and 2010 income tax returns, and have entered into the appeals process with respect to the 2009 and 2010 matters. While we believe that the ultimate resolution of these proposed adjustments will not have a material impact on our consolidated financial position, results of operations or cash flows, no assurance can be given that this will be the case given the amounts involved and the complex nature of the related issues.

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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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