XML 29 R12.htm IDEA: XBRL DOCUMENT
v3.8.0.1

Income Taxes | 12 Months Ended
--- | ---
Dec. 31, 2017
Income Taxes [Abstract] |
Income Taxes | Note 5. Income Taxes The U.S. Tax Cuts and Jobs Act (“U.S. Tax Reform”), enacted in December 2017, significantly changes U.S. corporate income tax laws by, among other things, reducing the U.S. corporate income tax rate to 21% starting in 2018 and creating a territorial tax system with a one-time mandatory tax on previously deferred foreign earnings of U.S. subsidiaries. Under U.S. GAAP (specifically, ASC Topic 740), the effects of changes in tax rates and laws on deferred tax balances are recognized in the period in which the new legislation is enacted. In response to U.S. Tax Reform, the Staff of the U.S. Securities and Exchange Commission issued Staff Accounting Bulletin No. 118 (“SAB No. 118”) to provide guidance to registrants in applying ASC Topic 740 in connection with U.S. Tax Reform. SAB No. 118 provides that in the period of enactment, the income tax effects of U.S. Tax Reform may be reported as a provisional amount based on a reasonable estimate (to the extent a reasonable estimate can be determined), which would be subject to adjustment during a “measurement period.” The measurement period begins in the reporting period of the U.S. Tax Reform enactment date and ends when a registrant has obtained, prepared and analyzed the information that was needed in order to complete the accounting requirements under ASC Topic 740. SAB No. 118 also describes supplemental disclosure that should accompany the provisional amounts. U.S. Tax Reform represents the first significant change in U.S. tax law in over 30 years. As permitted by SAB No. 118, some elements of the tax expense recorded in the fourth quarter of 2017 due to the enactment of U.S. Tax Reform are based on reasonable estimates and considered provisional. The Company is continuing to collect and analyze detailed information about the earnings and profits of its non-U.S. subsidiaries, the related taxes paid, the amounts which could be repatriated, the foreign taxes which may be incurred on repatriation and the associated impact of these items under U.S. Tax Reform. The Company may record adjustments to refine those estimates during the measurement period, as additional analysis is completed. As a result, we have recorded a net tax benefit of $47.3 million during the fourth quarter of 2017. This amount, which is reflected within the provision for income taxes in the Consolidated Statement of Income, includes the estimated impact of the one-time mandatory tax on previously deferred earnings of non-U.S. subsidiaries offset in part by the benefit from revaluation of net deferred tax liabilities based on the new lower corporate income tax rate. The impact of the U.S. Tax Reform may differ from this estimate, possibly materially, due to, among other things, changes in interpretations and assumptions made, additional guidance that may be issued and actions taken by the Company as a result of the U.S. Tax Reform. Income from operations before provision for taxes by domestic and foreign source is as follows:
|  | 2017 |  |  | 2016 |  |  | 2015 |
|  | (millions of dollars) |
Income from continuing operations before income taxes and income from affiliates and joint ventures: |  |  |  |  |  |  |  |  |
Domestic |  | $ | 96.7 |  |  | $ | 72.9 |  |  | $ | 32.6 |
Foreign |  |  | 94.2 |  |  |  | 97.4 |  |  |  | 100.0 |
|  | $ | 190.9 |  |  | $ | 170.3 |  |  | $ | 132.6 |
The provision (benefit) for taxes on income consists of the following:
|  | 2017 |  |  | 2016 |  |  | 2015 |
|  | (millions of dollars) |
Domestic |  |  |  |  |  |  |  |  |
Taxes currently payable |  |  |  |  |  |  |  |  |
Federal |  | $ | 46.0 |  |  | $ | 18.7 |  |  | $ | 1.4 |
State and local |  |  | 2.4 |  |  |  | 4.4 |  |  |  | 1.2 |
Deferred income taxes |  |  | (78.1 | ) |  |  | (8.8 | ) |  |  | (3.2 | )
Domestic tax provision (benefit) |  |  | (29.7 | ) |  |  | 14.3 |  |  |  | (0.6 | )
Foreign |  |  |  |  |  |  |  |  |  |  |  |
Taxes currently payable |  |  | 21.1 |  |  |  | 23.2 |  |  |  | 22.7 |
Deferred income taxes |  |  | 2.0 |  |  |  | (2.2 | ) |  |  | 0.7 |
Foreign tax provision |  |  | 23.1 |  |  |  | 21.0 |  |  |  | 23.4 |
Total tax provision (benefit) |  | $ | (6.6 | ) |  | $ | 35.3 |  |  | $ | 22.8 |
The provision (benefit) for taxes on income shown in the previous table is classified based on the location of the taxing authority, regardless of the location in which the taxable income is generated. The major elements contributing to the difference between the U.S. federal statutory tax rate and the consolidated effective tax rate are as follows:
|  | 2017 |  |  | 2016 |  |  | 2015 |
U.S. statutory rate |  |  | 35.0 | % |  |  | 35.0 | % |  |  | 35.0 | %
Depletion |  |  | (6.7 | )% |  |  | (6.6 | )% |  |  | (8.4 | )%
Difference between tax provided on foreign earnings and the U.S. statutory rate |  |  | (3.8 | )% |  |  | (6.4 | )% |  |  | (8.3 | )%
State and local taxes, net of federal tax benefit |  |  | 1.1 | % |  |  | 1.1 | % |  |  | 0.3 | %
Tax credits and foreign dividends |  |  | 0.3 | % |  |  | 0.6 | % |  |  | (0.5 | )%
Change in valuation allowance |  |  | (1.9 | )% |  |  | (1.1 | )% |  |  | (0.9 | )%
Impact of uncertain tax positions |  |  | 0.4 | % |  |  | 0.4 | % |  |  | (0.1 | )%
Impact of officer's non-deductible compensation |  |  | 0.8 | % |  |  | 0.1 | % |  |  | 2.9 | %
Manufacturing deduction |  |  | (1.6 | )% |  |  | (2.0 | )% |  |  | (2.0 | )%
Impact of US Tax Reform |  |  | (24.8 | )% |  |  | 0.0 | % |  |  | 0.0 | %
Other |  |  | (2.3 | )% |  |  | (0.4 | )% |  |  | (0.8 | )%
Consolidated effective tax rate |  |  | (3.5 | )% |  |  | 20.7 | % |  |  | 17.2 | %
The Company believes that its accrued liabilities are sufficient to cover its U.S. and foreign tax contingencies. The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities are presented below:
|  | 2017 |  |  | 2016 |
|  | (millions of dollars) |
Deferred tax assets attributable to: |  |  |  |  |  |
Accrued liabilities |  | $ | 28.6 |  |  | $ | 49.7 |
Net operating loss carry forwards |  |  | 33.2 |  |  |  | 34.6 |
Pension and post-retirement benefits costs |  |  | 40.4 |  |  |  | 55.4 |
Other |  |  | 22.0 |  |  |  | 35.0 |
Valuation allowance |  |  | (21.4 | ) |  |  | (24.8 | )
Total deferred tax assets |  |  | 102.8 |  |  |  | 149.9 |
Deferred tax liabilities attributable to: |  |  |  |  |  |  |  |
Plant and equipment, principally due to differences in depreciation |  |  | 161.6 |  |  |  | 251.3 |
Intangible assets |  |  | 63.4 |  |  |  | 96.3 |
Other |  |  | 11.6 |  |  |  | 14.0 |
Total deferred tax liabilities |  |  | 236.6 |  |  |  | 361.6 |
Net deferred tax asset (liability) |  | $ | (133.8 | ) |  | $ | (211.7 | )
Net deferred tax assets and net deferred tax liabilities are as follows:
|  | 2017 |  |  | 2016 |
|  | (millions of dollars) |
Net deferred tax asset, long-term |  | $ | 25.6 |  |  | $ | 27.1 |
Net deferred tax liability, long-term |  |  | 159.4 |  |  |  | 238.8 |
Net deferred tax asset (liability), long-term |  | $ | (133.8 | ) |  | $ | (211.7 | )
The Company has $33.2 million of deferred tax assets arising from tax loss carry forwards which will be realized through future operations. Carry forwards of approximately $15.5 million expire over the next 20 years, and $17.7 million can be utilized over an indefinite period. On December 31, 2017, the Company had $14.7 million of total unrecognized tax benefits. Included in this amount were a total of $11.9 million of unrecognized income tax benefits that, if recognized, would affect the Company's effective tax rate. While it is expected that the amount of unrecognized tax benefits will change in the next 12 months, we do not expect the change to have a significant impact on the results of operations or the financial position of the Company. The following table summarizes the activity related to our unrecognized tax benefits:
|  | 2017 |  |  | 2016 |
|  | (millions of dollars) |
Balance at beginning of the year |  | $ | 13.7 |  |  | $ | 4.0 |
Increases related to current year tax positions |  |  | 1.2 |  |  |  | 8.8 |
Increases related to new judgements |  |  | 1.2 |  |  |  | 0.9 |
Decreases related to audit settlements and statue expirations |  |  | (1.4 | ) |  |  | - |
Balance at the end of the year |  | $ | 14.7 |  |  | $ | 13.7 |
The Company's accounting policy is to recognize interest and penalties accrued, relating to unrecognized income tax benefits as part of its provision for income taxes. The Company had recorded a $0.4 million benefit in interest and penalties during 2017 and had a total accrued balance on December 31, 2017 of $1.7 million. The Company operates in multiple taxing jurisdictions, both within and outside the U.S. In certain situations, a taxing authority may challenge positions that the Company has adopted in its income tax filings. The Company, with a few exceptions (none of which are material), is no longer subject to U.S. federal, state, local, and European income tax examinations by tax authorities for years prior to 2010. Net cash paid for income taxes were $47.7 million, $30.6 million and $43.8 million for the years ended December 31, 2017, 2016 and 2015, respectively. The Company had approximately $531.2 million of foreign subsidiaries' undistributed earnings as of December 31, 2017. We intend to continue to permanently reinvest these earnings overseas for the foreseeable future and while U.S. federal tax expense as been recognized as a result of U.S. Tax Reform, no deferred tax liabilities with respect to foreign withholding taxes or state taxes have been recognized.

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 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration