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Income Taxes | 6 Months Ended
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Jun. 30, 2019
Income Tax Disclosure [Abstract] |
Income Taxes | 7. Income Taxes The following table presents components of income tax expense for the three and six months ended June 30, 2019 and 2018:
| Three months ended June 30, | Six months ended June 30,
(in thousands, except percentages) | 2019 | 2018 | 2019 | 2018
Income tax based on income from continuing operations, at estimated tax rates of 28.4% and 30.1%, respectively | $13,821 | $11,080 | $24,668 | $14,736
provision for change in estimated tax rate | (382) | (266) | (382) | (266)
Income tax before discrete items | 13,439 | 10,814 | 24,286 | 14,470
Discrete tax expense: |  |  |  |
Exercise of U.S. Stock Options | (6) | (3) | (56) | (126)
Impact of Mandatory Repatriation | — | (1,099) | — | (1,099)
Adjustments to prior period tax liabilities | 153 | (206) | 347 | (252)
Provision for/resolution of tax audits and contingencies, net | 5 | 2,443 | (2,227) | 2,448
Adjustment related to prior period change in opening valuation allowance | — | — | (1,346) | —
Other changes in valuation allowances | 841 | (4,986) | 841 | (4,986)
Other | (27) | 3 | 36 | (124)
Total income tax expense | $14,405 | $6,966 | $21,881 | $10,331
The second-quarter estimated annual effective tax rate on continuing operations was 28.4 percent in 2019, compared to 30.1 percent for the same period in 2018. Income tax expense for the quarter was computed in accordance with ASC 740-270 “Income Taxes – Interim Reporting”. Under this method, loss jurisdictions, which cannot recognize a tax benefit with regard to their generated losses, are excluded from the annual effective tax rate (AETR) calculation and their taxes will be recorded discretely in each quarter. The Company’s tax rate is affected by recurring items such as the income tax rate in the U.S. and in non-U.S. jurisdictions and the mix of income earned in those jurisdictions, including changes in losses and income from excluded loss jurisdictions, and the impact of discrete items in the respective quarter. The Company records the residual U.S. and foreign taxes on certain amounts of foreign earnings that have been targeted for repatriation to the U.S. These amounts are not considered to be indefinitely reinvested, and the Company accrued for the tax cost on these earnings to the extent they cannot be repatriated in a tax-free manner. The Company has targeted for repatriation $153.2 million of current year and prior year earnings of the Company’s foreign operations. If these earnings were distributed, the Company would be subject to foreign withholding taxes of $3.9 million and state income taxes of $3.2 million which have already been recorded. The Company conducts business globally and, as a result, files income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions. In the normal course of business the Company is subject to examination by taxing authorities throughout the world, including major jurisdictions such as the United States, Brazil, Canada, France, Germany, Italy, Mexico, and Switzerland. The open tax years in these jurisdictions range from 2007 to 2019. The Company is currently under audit in non-U.S. tax jurisdictions, including but not limited to Italy and Canada. In the first quarter of 2019, the Company recorded a net benefit of $2.2 million for tax audit settlements with Canada. The Canadian Revenue Agency agreed to accept the Company’s appeal of all protested issues. The Company has begun to receive refunds from the Canadian Revenue Agency and Ontario for taxes that were pre-paid at the time of protests. As such, during the first quarter, the Company had determined that it was more likely than not that the liability for unrecognized tax benefits of $2.2 million that was recorded as of December 31, 2018 was no longer warranted and thus it was reduced in the first quarter of 2019, resulting in a $2.2 million discrete tax benefit. 17 Index As of each reporting date, management considers new evidence, both positive and negative, that could affect its view of the future realization of deferred tax assets. In the second quarter of 2019, the Company recorded a valuation allowance of $0.8 million related to a non-U.S. subsidiary. In the first quarter of 2019, the Company recorded a $1.3 million out-of-period immaterial adjustment related to a German tax valuation allowance. In the second quarter of 2018, income tax expense was reduced $5.0 million as the Company reversed a previously-established valuation allowance for its subsidiary in Germany.

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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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