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Income Taxes | 12 Months Ended
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Dec. 31, 2016
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, 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 |
Opening balance at January 1, 2015 |  | $ | 0.5 |  |  | $ | 5.7 |  |  | $ | 6.2 |
Reductions for tax positions of prior periods |  |  | 0.0 |  |  |  | 0.0 |  |  |  | 0.0 |
Additions for tax positions of prior periods |  |  | 0.1 |  |  |  | 0.3 |  |  |  | 0.4 |
Additions for current year tax positions |  |  | 0.0 |  |  |  | 1.2 |  |  |  | 1.2 |
Reductions due to lapsed statutes of limitations |  |  | (0.3 | ) |  |  | (3.6 | ) |  |  | (3.9 | )
Closing balance at December 31, 2015 |  |  | 0.3 |  |  |  | 3.6 |  |  |  | 3.9 |
Current |  |  | 0.0 |  |  |  | 0.0 |  |  |  | 0.0 |
Non-current |  | $ | 0.3 |  |  | $ | 3.6 |  |  | $ | 3.9 |
Opening balance at January 1, 2016 |  | $ | 0.3 |  |  | $ | 3.6 |  |  | $ | 3.9 |
Reductions for tax positions of prior periods |  |  | (0.1 | ) |  |  | (0.6 | ) |  |  | (0.7 | )
Additions for tax positions of prior periods |  |  | 0.0 |  |  |  | 0.0 |  |  |  | 0.0 |
Additions for current year tax positions |  |  | 0.0 |  |  |  | 0.0 |  |  |  | 0.0 |
Reductions due to lapsed statutes of limitations |  |  | (0.1 | ) |  |  | (0.8 | ) |  |  | (0.9 | )
Closing balance at December 31, 2016 |  |  | 0.1 |  |  |  | 2.2 |  |  |  | 2.3 |
Current |  |  | 0.0 |  |  |  | 0.0 |  |  |  | 0.0 |
Non-current |  | $ | 0.1 |  |  | $ | 2.2 |  |  | $ | 2.3 |
All of the $2.3 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 unrecognized tax benefits as part of income taxes in our consolidated statements of income. During 2016, the Company recorded a net reduction of $1.6 million in unrecognized tax benefits and associated interest and penalties. 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, one of the Company’s U.S. subsidiaries is currently subject to a state tax examination in respect of 2012 through to 2014 inclusive. The Company currently anticipates that adjustments, if any, arising out of this tax audit would not result in a material change to the Company’s financial position as at December 31, 2016. As previously disclosed the Company’s German subsidiaries received a tax audit notification in October 2015 in respect of 2010 – 2014 inclusive. The examination was effectively settled in the fourth quarter of 2016. The additional cost to the Company was not material. The Company and its U.S. subsidiaries remain open to examination by the IRS for years 2013 onwards. The Company’s subsidiaries in foreign tax jurisdictions are open to examination including France (2013 onwards), Germany (2015 onwards), Switzerland (2015 onwards) and the United Kingdom (2015 onwards). The sources of income before income taxes were as follows:
(in millions) |  | 2016 |  |  | 2015 |  |  | 2014 |
Domestic |  | $ | 16.8 |  |  | $ | 52.7 |  |  | $ | 15.2 |
Foreign |  |  | 86.3 |  |  |  | 99.6 |  |  |  | 95.7 |
|  | $ | 103.1 |  |  | $ | 152.3 |  |  | $ | 110.9 |
The components of income tax expense are summarized as follows:
(in millions) |  | 2016 |  |  | 2015 |  |  | 2014 |
Current: |  |  |  |  |  |  |  |  |  |  |  |
Federal |  | $ | 4.4 |  |  | $ | 5.2 |  |  | $ | 4.5 |
State and local |  |  | 1.1 |  |  |  | 1.3 |  |  |  | 2.1 |
Foreign |  |  | 15.3 |  |  |  | 14.3 |  |  |  | 14.9 |
|  |  | 20.8 |  |  |  | 20.8 |  |  |  | 21.5 |
Deferred: |  |  |  |  |  |  |  |  |  |  |  |
Federal |  |  | (0.7 | ) |  |  | 12.8 |  |  |  | 3.3 |
State and local |  |  | (0.3 | ) |  |  | 0.5 |  |  |  | 0.3 |
Foreign |  |  | 2.0 |  |  |  | (1.3 | ) |  |  | 1.7 |
|  |  | 1.0 |  |  |  | 12.0 |  |  |  | 5.3 |
|  | $ | 21.8 |  |  | $ | 32.8 |  |  | $ | 26.8 |
Cash payments for income taxes were $23.1 million, $22.5 million and $11.6 million during 2016, 2015 and 2014, respectively. The effective tax rate varies from the U.S. federal statutory rate because of the factors indicated below:
|  | 2016 |  |  | 2015 |  |  | 2014 |
Statutory rate |  |  | 35.0 | % |  |  | 35.0 | % |  |  | 35.0 | %
Foreign income inclusions |  |  | 1.0 |  |  |  | 1.8 |  |  |  | 5.5 |
Foreign tax rate differential |  |  | (16.6 | ) |  |  | (9.6 | ) |  |  | (14.6 | )
Tax (credit)/charge from previous years |  |  | (0.7 | ) |  |  | (0.5 | ) |  |  | 4.7 |
Net (credit) from unrecognized tax benefits |  |  | (1.6 | ) |  |  | (1.5 | ) |  |  | (6.2 | )
Foreign currency transactions |  |  | 2.4 |  |  |  | (1.9 | ) |  |  | 1.0 |
United Kingdom income tax rate reduction |  |  | (0.6 | ) |  |  | (0.7 | ) |  |  | 0.0 |
Other items and adjustments, net |  |  | 2.2 |  |  |  | (1.1 | ) |  |  | (1.2 | )
|  |  | 21.1 | % |  |  | 21.5 | % |  |  | 24.2 | %
The most significant factor is the mix of taxable profits generated in the different geographical jurisdictions in which the Group operates, which continues to have a significant positive impact on the effective rate. Foreign income inclusions arise each year from certain types of income earned overseas being taxable under the U.S. tax regulations. These types of income include Subpart F income, principally from foreign based company sales in the United Kingdom, including the associated Section 78 tax gross up, and also from the income earned by certain overseas subsidiaries taxable under the U.S. tax regime. Foreign income inclusions have a negative impact on the effective tax rate. Foreign tax credits can fully or partially offset these incremental U.S. taxes from foreign income inclusions. The utilization of foreign tax credits varies year on year as this is dependent on a number of variable factors which are difficult to predict and may in certain years prevent any offset of foreign tax credits. The effective rate is favorably impacted by the generation of foreign tax credits against foreign income inclusions in 2016. As a consequence of the Group having operations outside of the U.S., it is exposed to foreign currency fluctuations. These have had a negative impact on the effective rate in 2016. Other items do not have a material impact on the effective tax rate. Details of deferred tax assets and liabilities are analyzed as follows:
(in millions) |  | 2016 |  |  | 2015 |
Deferred tax assets: |  |  |  |  |  |  |  |
Stock options |  | $ | 5.5 |  |  | $ | 5.2 |
Net operating loss carry forwards |  |  | 18.2 |  |  |  | 2.7 |
Intangible assets |  |  | 3.7 |  |  |  | 3.3 |
Accretion expense |  |  | 5.1 |  |  |  | 4.8 |
Other |  |  | 9.5 |  |  |  | 6.0 |
Subtotal |  |  | 42.0 |  |  |  | 22.0 |
Less valuation allowance |  |  | 0.0 |  |  |  | 0.0 |
Total net deferred tax assets |  | $ | 42.0 |  |  | $ | 22.0 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
Excess of book over tax basis in property, plant and equipment |  | $ | (13.0 | ) |  | $ | (4.1 | )
Goodwill amortization |  |  | (11.3 | ) |  |  | (11.3 | )
Intangible amortization |  |  | (26.7 | ) |  |  | (23.4 | )
Pension liabilities |  |  | (8.2 | ) |  |  | (10.0 | )
Other |  |  | (0.2 | ) |  |  | (0.7 | )
Total deferred tax liabilities |  | $ | (59.4 | ) |  | $ | (49.5 | )
Net deferred tax liability |  | $ | (17.4 | ) |  | $ | (27.5 | )
Current portion of deferred tax assets |  | $ | 0.0 |  |  | $ | 8.8 |
Deferred tax assets, net of current portion |  |  | 14.9 |  |  |  | 1.4 |
Current portion of deferred tax liabilities |  |  | 0.0 |  |  |  | 0.0 |
Deferred tax liabilities, net of current portion |  |  | (32.3 | ) |  |  | (37.7 | )
|  | $ | (17.4 | ) |  | $ | (27.5 | )
The Company evaluates deferred tax assets to determine whether it is more likely than not that they will be realized. Deferred tax assets are reviewed each period on a tax jurisdiction by tax jurisdiction basis to analyze whether there is sufficient positive or negative evidence to support realizability. As a result of the Company’s assessment of its deferred tax assets at December 31, 2016, the Company considers it more likely than not that it will recover the full benefit of its deferred tax assets and no valuation allowance is required. 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. Gross net operating loss carry forwards of $75.3 million result in a deferred tax asset of $18.2 million. The net operating loss carry forwards arose in the U.S. and in four of the Company’s foreign subsidiaries. Net operating loss carry forwards of $17.2 million arose from state and federal tax losses in prior and current periods in certain of the Company’s U.S. subsidiaries. It is expected that sufficient taxable profits will be generated in the U.S. against which the federal net operating loss carry forwards of $10.2 million can be relieved prior to their expiration in the period 2035 to 2036, and the state net operating loss carry forwards of $7.0 million can be relieved before their expiration in the period 2022 to 2036. The net operating loss carry forwards in two of the Company’s foreign subsidiaries totaling $58.1 million arose in prior periods and it is expected that sufficient taxable profits will be generated against which these net operating loss carry forwards can be relieved. These losses can be carried forward indefinitely without expiration. The Company is in a position to control whether or not to repatriate foreign earnings and we currently do not expect to make a repatriation in the foreseeable future. No taxes have been provided for on the unremitted earnings of our overseas subsidiaries as any tax basis differences relating to investments in these overseas subsidiaries are considered to be indefinite in duration. The amount of unremitted earnings at December 31, 2016 was approximately $788 million. 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 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 2: 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=65882285&loc=d3e32559-109319 Reference 3: 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=65882285&loc=d3e32718-109319 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=65882285&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=65882285&loc=d3e32537-109319 + Details
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