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Income Taxes | 12 Months Ended
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Dec. 31, 2014
Income Tax Disclosure [Abstract] |
Income Taxes | Note 10. Income Taxes A roll-forward of unrecognized tax benefits and associated accrued interest and penalties is as follows:
(in millions) |  | Interest and Penalties |  |  | Unrecognized Tax Benefits |  |  | Total |
Opening balance at January 1, 2012 |  | $ | 0.4 |  |  | $ | 12.2 |  |  | $ | 12.6 |
Additions related to tax positions taken in the current period |  |  | 0.0 |  |  |  | 0.2 |  |  |  | 0.2 |
Additions for tax positions of prior periods |  |  | 0.2 |  |  |  | 0.0 |  |  |  | 0.2 |
Reductions due to lapsed statutes of limitations |  |  | 0.0 |  |  |  | (0.2 | ) |  |  | (0.2 | )
Closing balance at December 31, 2012 |  |  | 0.6 |  |  |  | 12.2 |  |  |  | 12.8 |
Current |  |  | (0.3 | ) |  |  | (2.7 | ) |  |  | (3.0 | )
Non-current |  | $ | 0.3 |  |  | $ | 9.5 |  |  | $ | 9.8 |
Opening balance at January 1, 2013 |  | $ | 0.6 |  |  | $ | 12.2 |  |  | $ | 12.8 |
Additions for tax positions of prior periods |  |  | 0.6 |  |  |  | 0.2 |  |  |  | 0.8 |
Reductions due to lapsed statutes of limitations |  |  | (0.1 | ) |  |  | (0.5 | ) |  |  | (0.6 | )
Closing balance at December 31, 2013 |  |  | 1.1 |  |  |  | 11.9 |  |  |  | 13.0 |
Current |  |  | (0.6 | ) |  |  | (6.2 | ) |  |  | (6.8 | )
Non-current |  | $ | 0.5 |  |  | $ | 5.7 |  |  | $ | 6.2 |
Opening balance at January 1, 2014 |  | $ | 1.1 |  |  | $ | 11.9 |  |  | $ | 13.0 |
Reductions for tax positions of prior periods |  |  | (0.4 | ) |  |  | (3.6 | ) |  |  | (4.0 | )
Additions for tax positions of prior periods |  |  | 0.0 |  |  |  | 0.1 |  |  |  | 0.1 |
Additions for current year tax positions |  |  | 0.0 |  |  |  | 0.2 |  |  |  | 0.2 |
Reductions due to lapsed statutes of limitations |  |  | (0.2 | ) |  |  | (2.9 | ) |  |  | (3.1 | )
Closing balance at December 31, 2014 |  |  | 0.5 |  |  |  | 5.7 |  |  |  | 6.2 |
Current |  |  | 0.0 |  |  |  | 0.0 |  |  |  | 0.0 |
Non-current |  | $ | 0.5 |  |  | $ | 5.7 |  |  | $ | 6.2 |
All of the $6.2 million of unrecognized tax benefits, and interest and penalties, would impact our effective tax rate if recognized. We recognize accrued interest and penalties associated with uncertain tax positions as part of income taxes in our consolidated statements of income. The Company or one of its subsidiaries files income tax returns with the U.S. federal government, and various state and foreign jurisdictions. As previously disclosed, as at December 31, 2013, the Company and its U.S. subsidiaries were subject to tax audits in the U.S.. On March 6, 2014, the federal income tax examination by the IRS for 2009 was effectively settled. The additional tax cost was nominal and resulted in a reduction of $3.6 million in unrecognized tax benefits and a reduction of $0.4 million in associated interest and penalties in the first quarter of 2014. During the third quarter of 2014, the Company recorded a reduction of $2.9 million in unrecognized tax benefits and $0.2 million in associated interest and penalties due to the expiration of applicable statutes of limitations and there was a $0.3 million addition to unrecognized tax benefits recorded during the fourth quarter of 2014. The Company and its U.S. subsidiaries remain open to examination by the IRS for years 2011 onwards. The Company’s subsidiaries in foreign tax jurisdictions are open to examination including France (2013 onwards), Germany (2010 onwards), Switzerland (2013 onwards) and the United Kingdom (2013 onwards). The sources of income before income taxes were as follows:
(in millions) |  | 2014 |  |  | 2013 |  |  | 2012 |
Domestic |  | $ | 15.2 |  |  | $ | 10.0 |  |  | $ | 5.6 |
Foreign |  |  | 95.7 |  |  |  | 82.8 |  |  |  | 87.7 |
|  | $ | 110.9 |  |  | $ | 92.8 |  |  | $ | 93.3 |
The components of income tax charges are summarized as follows:
(in millions) |  | 2014 |  |  | 2013 |  |  | 2012 |
Current: |  |  |  |  |  |  |  |  |  |  |  |
Federal |  | $ | 4.5 |  |  | $ | 0.8 |  |  | $ | 2.3 |
State and local |  |  | 2.1 |  |  |  | 0.8 |  |  |  | 0.6 |
Foreign |  |  | 14.9 |  |  |  | 6.8 |  |  |  | 11.8 |
|  |  | 21.5 |  |  |  | 8.4 |  |  |  | 14.7 |
Deferred: |  |  |  |  |  |  |  |  |  |  |  |
Federal |  |  | 3.3 |  |  |  | 1.7 |  |  |  | 11.4 |
State and local |  |  | 0.3 |  |  |  | 0.1 |  |  |  | 0.9 |
Foreign |  |  | 1.7 |  |  |  | 4.8 |  |  |  | (0.6 | )
|  |  | 5.3 |  |  |  | 6.6 |  |  |  | 11.7 |
|  | $ | 26.8 |  |  | $ | 15.0 |  |  | $ | 26.4 |
Cash payments for income taxes were $11.6 million, $21.1 million and $13.1 million during 2014, 2013 and 2012, respectively. The effective tax rate varies from the U.S. federal statutory rate because of the factors indicated below:
|  | 2014 |  |  | 2013 |  |  | 2012 |
Statutory rate |  |  | 35.0 | % |  |  | 35.0 | % |  |  | 35.0 | %
Foreign income inclusions |  |  | 5.5 |  |  |  | 4.2 |  |  |  | 10.5 |
Foreign tax rate differential |  |  | (14.6 | ) |  |  | (14.6 | ) |  |  | (16.4 | )
Tax charge/(credit) from previous years |  |  | 4.7 |  |  |  | (2.9 | ) |  |  | (0.6 | )
Net charge/(credit) from unrecognized tax benefits |  |  | (6.2 | ) |  |  | 0.2 |  |  |  | 0.3 |
Foreign currency translation |  |  | 1.0 |  |  |  | (2.7 | ) |  |  | (1.0 | )
Other items and adjustments, net |  |  | (1.2 | ) |  |  | (3.0 | ) |  |  | 0.5 |
|  |  | 24.2 | % |  |  | 16.2 | % |  |  | 28.3 | %
Significant factors affecting the variation to statutory rate are set out above and include foreign income inclusions net of foreign tax credits. The mix of taxable profits generated in the different geographical localities in which the Group operates had a significant positive impact on the effective tax rate in 2014. Details of deferred tax assets and liabilities are analyzed as follows:
(in millions) |  | 2014 |  |  | 2013 |
Deferred tax assets: |  |  |  |  |  |  |  |
Foreign tax credits |  | $ | 0.8 |  |  | $ | 4.5 |
Accrued expenses |  |  | 0.3 |  |  |  | 3.4 |
Stock options |  |  | 5.0 |  |  |  | 5.2 |
Excess of tax over book basis in property, plant and equipment |  |  | 0.4 |  |  |  | 0.9 |
Net operating loss carry forwards |  |  | 0.6 |  |  |  | 0.3 |
Pension assets |  |  | 0.7 |  |  |  | 6.5 |
Other intangible assets |  |  | 5.3 |  |  |  | 1.0 |
Other |  |  | 5.4 |  |  |  | 3.9 |
Subtotal |  |  | 18.5 |  |  |  | 25.7 |
Less valuation allowance |  |  | 0.0 |  |  |  | 0.0 |
Total net deferred tax assets |  | $ | 18.5 |  |  | $ | 25.7 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
Excess of book over tax basis in property, plant and equipment |  | $ | (2.7 | ) |  | $ | (2.0 | )
Goodwill amortization |  |  | (9.6 | ) |  |  | (7.2 | )
Other intangible assets |  |  | 0.0 |  |  |  | (0.3 | )
Excess of book over tax basis in tax deductible goodwill |  |  | (3.4 | ) |  |  | (0.2 | )
Excess of book over tax basis in intangible assets |  |  | (7.2 | ) |  |  | (7.5 | )
Pension liabilities |  |  | (9.0 | ) |  |  | 0.0 |
Other |  |  | (0.5 | ) |  |  | (0.9 | )
Total deferred tax liabilities |  | $ | (32.4 | ) |  | $ | (18.1 | )
Net deferred tax (liability)/asset |  | $ | (13.9 | ) |  | $ | 7.6 |
Current portion of deferred tax assets |  | $ | 8.4 |  |  | $ | 8.7 |
Deferred tax assets, net of current portion |  |  | 0.7 |  |  |  | 8.6 |
Current portion of deferred tax liabilities |  |  | 0.0 |  |  |  | (0.2 | )
Deferred tax liabilities, net of current portion |  |  | (23.0 | ) |  |  | (9.5 | )
|  | $ | (13.9 | ) |  | $ | 7.6 |
Details of the deferred tax asset valuation allowance are as follows:
(in millions) |  | 2014 |  |  | 2013 |  |  | 2012 |
At January 1 |  | $ | 0.0 |  |  | $ | 0.0 |  |  | $ | (7.5 | )
Change in foreign tax credits |  |  | 0.0 |  |  |  | 0.0 |  |  |  | 7.5 |
At December 31 |  | $ | 0.0 |  |  | $ | 0.0 |  |  | $ | 0.0 |
As a result of the Company’s assessment of its net deferred tax assets at December 31, 2014, the Company considers it more likely than not that no valuation allowance is required for $0.6 million (2013 – $0.3 million) of its net operating loss carry forwards and that no valuation allowance is required against its foreign tax credit carry forwards (2013 – $0.0 million). The net operating loss carry forwards arose in the U.S. and in one of the Company’s foreign subsidiaries. The net operating loss carry forwards in the U.S. arose in the prior periods as a result of state tax losses. It is expected that sufficient taxable profits will be generated in the U.S. against which these net operating loss carry forwards can be relieved prior to their expiration in 2021. The foreign tax credit carry forwards arose in the U.S. in prior periods. The Company has determined that future foreign income inclusions will be sufficient to utilize all of the $0.8 million (2013 – $4.5 million) of the foreign tax credit carry forwards prior to their expiration in 2021 and therefore no valuation allowance is required. The net operating loss carry forwards in one of the Company’s foreign subsidiaries arose in the current period and it is expected that sufficient taxable profits will be generated against which these net operating loss carry forwards can be relieved. Should it be determined in the future that it is no longer more likely than not that these assets will be realized, a valuation allowance would be required, and the Company’s operating results would be adversely affected during the period in which such a determination would be made. The Company is in a position to control whether or not to repatriate foreign earnings and we intend to permanently reinvest earnings overseas to fund overseas subsidiaries. No taxes have been provided for the unremitted earnings of our overseas subsidiaries as any tax basis differences relating to investments in these overseas subsidiaries are considered to be permanent in duration. The amount of unremitted earnings at December 31, 2014 and 2013 was approximately $743 million and $605 million, respectively. If these earnings are remitted, additional taxes could result after offsetting foreign income taxes paid although the calculation of the additional taxes is not practicable to compute at this time.

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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 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 08 -Paragraph h -Article 4 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32559-109319 + Details
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