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Income Taxes | 12 Months Ended
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Dec. 31, 2017
Income Tax Disclosure [Abstract] |
Income Taxes | Note 16. Income Taxes We record current income tax expense for the amounts that we expect to report and pay on our income tax returns and deferred income tax expense for the change in the deferred tax assets and liabilities. On December 22, 2017, the President of the United States signed into law the Tax Cuts and Jobs Act (the “Tax Act”) that significantly changed the U.S. tax code and reduced the U.S. federal corporate tax rate from 35% to 21%. Deferred tax assets and liabilities are recorded for the difference between the financial statement and tax basis of assets and liabilities, measured at the enacted tax rate applicable when the differences reverse. We recognized deferred tax expense of $8.0 million for the remeasurement of the net deferred tax assets in the fourth quarter of 2017. The Tax Act included the transition from a worldwide system of taxation to a territorial system and required a one-time deemed mandatory repatriation of post-1986 undistributed foreign subsidiary earnings and profits (“E&P”). As of December 31, 2017, we had an estimated $174.0 million of undistributed foreign E&P subject to the deemed mandatory repatriation and recognized current income tax expense of $8.1 million in the fourth quarter of 2017. In addition to the impact recorded as of December 31, 2017, the Tax Act changed existing tax laws, effective January 1, 2018, including the repeal of the corporate alternative minimum tax and the increasing alternative minimum tax credit carryforward utilization, as well as establishing two new taxes, the base erosion anti-abuse tax (“BEAT”) and the global intangible low-taxed income (“GILTI”) tax after the foreign intangible deduction (“FDII”). Under the new BEAT regime, certain payments made to related foreign companies are treated as base-eroding and limits the deductibility of these payments and imposes a minimum tax in excess of regular tax liability. We have reviewed the applicability of the BEAT provisions to our transactions and we do not expect to be subject to BEAT and have not recorded any provision for BEAT in the year ended December 31, 2017. Under the new GILTI regime, earnings of foreign subsidiaries in excess of an allowable return on the subsidiary’s tangible assets are required to be included in our U.S. taxable income. Because of the complexity of the new GILTI tax rules, we are continuing to assess the impact and have not recorded a provision for the GILTI tax in the year ended December 31, 2017. On December 22, 2017, the SEC issued Staff Accounting Bulletin No. 118 (“SAB 118”), which provides guidance on accounting for the tax effects of the Tax Act under U.S. GAAP for SEC registrants who do not have the necessary information available, prepared or analyzed in reasonable detail to complete the accounting for certain income tax effects of the Tax Act. In accordance with SAB 118, to the extent that a company’s accounting is incomplete but it is able to determine a reasonable estimate, it must record a provisional estimate in the financial statements. We have not completed the detailed accounting for all of the income tax effects of the Tax Act, specifically the BEAT and GILTI taxes, since the computations are complex and we need additional time to complete a full analysis. Under SAB 118, we recorded a provisional estimate for the mandatory repatriation of post-1986 undistributed foreign subsidiary E&P of $8.1 million and the remeasurement of the net deferred tax assets of $8.0 million for the year ended December 31, 2017. The ultimate impact may differ from these provisional amounts, possibly materially, due to additional analysis, changes in interpretations and assumptions we have made, additional regulatory guidance that may be issued and actions we may take as a result of the Tax Act. SAB 118 provides a measurement period that should not extend beyond one year from the enactment date and we expect to complete the detailed accounting and include any adjustments within this period. Income from continuing operations before income taxes consisted of the following:
|  | Year Ended December 31, |
(in thousands) |  | 2017 |  |  | 2016 |  |  | 2015 |
Foreign |  | $ | 82,919 |  |  | $ | 33,611 |  |  | $ | 35,571 |
United States |  |  | 21,431 |  |  |  | 31,118 |  |  |  | 2,364 |
Income from continuing operations before income taxes |  | $ | 104,350 |  |  | $ | 64,729 |  |  | $ | 37,935 |
Significant components of the income tax provision from continuing operations are as follows:
|  | Year Ended December 31, |
(in thousands) |  | 2017 |  |  | 2016 |  |  | 2015 |
Current: |  |  |  |  |  |  |  |  |  |  |  |
United States: |  |  |  |  |  |  |  |  |  |  |  |
Federal |  | $ | 1,693 |  |  | $ | 3,685 |  |  | $ | (876 | )
State |  |  | 2,573 |  |  |  | 1,716 |  |  |  | 1,558 |
Foreign |  |  | 15,583 |  |  |  | 8,177 |  |  |  | 9,342 |
Total current |  |  | 19,849 |  |  |  | 13,578 |  |  |  | 10,024 |
Deferred: |  |  |  |  |  |  |  |  |  |  |  |
United States: |  |  |  |  |  |  |  |  |  |  |  |
Federal |  |  | 19,893 |  |  |  | 8,427 |  |  |  | 1,854 |
State |  |  | 1,761 |  |  |  | (598 | ) |  |  | (164 | )
Foreign |  |  | 4,395 |  |  |  | (157 | ) |  |  | (1,221 | )
Total deferred |  |  | 26,049 |  |  |  | 7,672 |  |  |  | 469 |
Income tax expense |  | $ | 45,898 |  |  | $ | 21,250 |  |  | $ | 10,493 |
We are subject to income tax in jurisdictions in which we operate. A reconciliation of the statutory federal income tax rate to the effective tax rate is as follows:
|  | Year Ended December 31, |
(in thousands) |  | 2017 |  |  | 2016 |  |  | 2015 |
Computed income tax expense at statutory federal income tax rate of 35% |  | $ | 36,522 |  |  |  | 35.0 | % |  | $ | 22,655 |  |  |  | 35.0 | % |  | $ | 13,277 |  |  |  | 35.0 | %
State income taxes, net of federal benefit |  |  | 1,160 |  |  |  | 1.1 | % |  |  | 292 |  |  |  | 0.5 | % |  |  | 1,713 |  |  |  | 4.5 | %
Deemed mandatory repatriation state tax |  |  | 1,206 |  |  |  | 1.2 | % |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Deemed mandatory repatriation federal tax, net of foreign tax credit |  |  | 6,936 |  |  |  | 6.6 | % |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Remeasurement of deferred taxes due to reduction in U.S. tax rate * |  |  | 8,000 |  |  |  | 7.7 | % |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Foreign tax rate differential |  |  | (5,031 | ) |  |  | (4.8 | )% |  |  | (882 | ) |  |  | (1.4 | )% |  |  | (1,181 | ) |  |  | (3.1 | )%
U.S. tax on current year foreign earnings, net of foreign tax credits |  |  | (2,726 | ) |  |  | (2.6 | )% |  |  | (373 | ) |  |  | (0.6 | )% |  |  | (948 | ) |  |  | (2.5 | )%
Change in valuation allowance |  |  | (796 | ) |  |  | (0.8 | )% |  |  | 1,230 |  |  |  | 1.9 | % |  |  | (944 | ) |  |  | (2.5 | )%
Other adjustments, net |  |  | 627 |  |  |  | 0.6 | % |  |  | (1,672 | ) |  |  | (2.6 | )% |  |  | (1,424 | ) |  |  | (3.7 | )%
Income tax expense |  | $ | 45,898 |  |  |  | 44.0 | % |  | $ | 21,250 |  |  |  | 32.8 | % |  | $ | 10,493 |  |  |  | 27.7 | %
* Includes $0.6 million increase to the valuation allowance related to the remeasurement of deferred taxes due to the reduction in U.S. tax rate. The components of deferred income tax assets and liabilities included in the Consolidated Balance Sheets are as follows:
|  | December 31, |
(in thousands) |  | 2017 |  |  | 2016 |
Deferred tax assets: |  |  |  |  |  |  |  |
Tax credit carryforwards |  | $ | 6,654 |  |  | $ | 11,380 |
Pension, compensation, and other employee benefits |  |  | 15,173 |  |  |  | 22,868 |
Provisions for losses |  |  | 5,826 |  |  |  | 10,235 |
Net operating loss carryforward |  |  | 5,195 |  |  |  | 5,023 |
State income taxes |  |  | 2,502 |  |  |  | 3,790 |
Other deferred income tax assets |  |  | 2,796 |  |  |  | 5,020 |
Total deferred tax assets |  |  | 38,146 |  |  |  | 58,316 |
Valuation allowance |  |  | (4,010 | ) |  |  | (3,998 | )
Foreign deferred tax assets included above |  |  | (2,396 | ) |  |  | (1,972 | )
Net deferred tax assets |  |  | 31,740 |  |  |  | 52,346 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
Property and equipment |  |  | (10,530 | ) |  |  | (3,299 | )
Deferred tax related to life insurance |  |  | (3,556 | ) |  |  | (5,642 | )
Goodwill and other intangible assets |  |  | (4,299 | ) |  |  | (4,535 | )
Other deferred income tax liabilities |  |  | (463 | ) |  |  | (557 | )
Total deferred tax liabilities |  |  | (18,848 | ) |  |  | (14,033 | )
Foreign deferred tax liabilities included above |  |  | 7,869 |  |  |  | 2,852 |
United States net deferred tax assets |  | $ | 20,761 |  |  | $ | 41,165 |
We use significant judgment in forming conclusions regarding the recoverability of our deferred tax assets and evaluate all available positive and negative evidence to determine if it is more-likely-than-not that the deferred tax assets will be realized. To the extent recovery does not appear likely, a valuation allowance must be recorded. We had gross deferred tax assets of $38.1 million as of December 31, 2017 and $58.3 million as of December 31, 2016. These deferred tax assets reflect the expected future tax benefits to be realized upon reversal of deductible temporary differences and the utilization of net operating loss and tax credit carryforwards. As of December 31, 2017, foreign tax credit carryforwards were $0.4 million, of which $0.1 million are U.S. foreign tax credits and $0.3 million are United Kingdom foreign tax credits. The U.S. foreign tax credits are subject to a 10-year carryforward period and will expire in 2021. As of December 31, 2017, we had alternative minimum tax credit carryforwards of $6.2 million that will be fully utilized against future tax liabilities before becoming refundable as allowed under the Tax Act. We had gross state and foreign net operating loss carryforwards of $68.4 million as of December 31, 2017 and $63.0 million as of December 31, 2016, for which we had deferred tax assets of $5.2 million as of December 31, 2017 and $5.0 million as of December 31, 2016. The state and foreign net operating loss carryforwards expire on various dates from 2018 through 2038. As of December 31, 2017 and 2016, the valuation allowance was $4.0 million. During 2017, we had a $1.6 million decrease on German foreign net operating loss carryforwards, offset by a $0.3 million increase for the United Kingdom foreign tax credits (although subject to an indefinite carryforward period, do not meet the more likely-than-not threshold for recognition), a $0.5 million increase for the state net operating loss return to provision true up, a $0.6 million increase due to the remeasurement for the reduction in U.S. tax rate, and a $0.2 million increase in foreign exchange. While we believe that the deferred tax assets, net of existing valuation allowances, will be utilized in future periods, there are inherent uncertainties regarding the ultimate realization of these assets. It is possible that the relative weight of positive and negative evidence regarding the realization of deferred tax assets may change, which could result in a material increase or decrease in our valuation allowance. Such a change could result in a material increase or decrease to income tax expense in the period the assessment was made. We have not recorded deferred taxes for certain states or foreign withholding taxes on certain historical unremitted earnings of our subsidiaries located in Canada, the United Kingdom, and the Netherlands as we intend to reinvest those earnings in operations outside of the United States. We exercise judgment in determining the income tax provision for positions taken on prior returns when the ultimate tax determination is uncertain. We classify liabilities associated with uncertain tax positions as non-current liabilities in the Consolidated Balance Sheets unless expected to be paid or released within one year. We had liabilities associated with uncertain tax positions, including interest and penalties, of $1.7 million as of December 31, 2017 and $2.7 million as of December 31, 2016. Uncertain tax positions, including interest and penalties, are classified as a component of income tax expense. During 2017, we decreased the liability for continuing operations uncertain tax positions by $0.1 million due to lapse of statute and we increased accrued interest and penalties for continuing operations positions by $0.1 million. We expect $1.3 million of the continuing operations uncertain tax positions to be resolved or settled within the next twelve months and have classified this amount as a current liability. During 2017, we released the liability for discontinued operations uncertain tax positions of $1.0 million, including $0.4 million in accrued interest and penalties, due to a statute expiration, which was recorded through discontinued operations. We had liabilities associated with discontinued operations uncertain tax positions of zero as of December 31, 2017 and $1.0 million as of December 31, 2016. A reconciliation of the liabilities associated with uncertain tax positions (excluding interest and penalties) is as follows:
(in thousands) |  | Continuing Operations |  |  | Discontinued Operations |  |  | Total |
Balance at December 31, 2014 |  | $ | 1,283 |  |  | $ | 636 |  |  | $ | 1,919 |
Additions for tax positions taken in prior years |  |  | 43 |  |  |  | — |  |  |  | 43 |
Reductions for tax positions taken in prior years |  |  | (666 | ) |  |  | — |  |  |  | (666 | )
Reductions for lapse of applicable statutes |  |  | (353 | ) |  |  | — |  |  |  | (353 | )
Balance at December 31, 2015 |  |  | 307 |  |  |  | 636 |  |  |  | 943 |
Additions for tax positions taken in prior years |  |  | 1,295 |  |  |  | — |  |  |  | 1,295 |
Reductions for lapse of applicable statutes |  |  | (43 | ) |  |  | — |  |  |  | (43 | )
Balance at December 31, 2016 |  |  | 1,559 |  |  |  | 636 |  |  |  | 2,195 |
Additions for tax positions taken in prior years |  |  | 43 |  |  |  | — |  |  |  | 43 |
Reductions for lapse of applicable statutes |  |  | (177 | ) |  |  | (636 | ) |  |  | (813 | )
Balance at December 31, 2017 |  | $ | 1,425 |  |  | $ | — |  |  | $ | 1,425 |
We are subject to regular and recurring audits by taxing authorities in jurisdictions in which we operate or have operated in the past, including various foreign countries in addition to the United States, Canada, and the United Kingdom. Our 2014 through 2017 U.S. federal tax years and various state tax years from 2013 through 2017 remain subject to income tax examinations by tax authorities. Tax years 2012 through 2017 remain subject to examination by various foreign taxing jurisdictions. Cash paid for income taxes was $14.6 million during 2017, $14.1 million during 2016, and $10.1 million during 2015.

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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 -URI http://asc.fasb.org/topic&trid=2144680 + Details
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