XML 86 R23.htm IDEA: XBRL DOCUMENT
v2.4.1.9

Income Taxes | 12 Months Ended
--- | ---
Dec. 31, 2014
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes An analysis of the provision (benefit) for income taxes from continuing operations follows ($ in millions):
| For the Years Ended December 31,
| 2014 |  | 2013 |  | 2012
Current income taxes: |  |  |  |  |
U.S. Federal | $ | 6.6 |  |  | $ | 13.6 |  |  | $ | 16.2 |
U.S. State | 0.6 |  |  | 0.9 |  |  | 1.5 |
Foreign | 10.0 |  |  | 21.2 |  |  | 18.7 |
| 17.2 |  |  | 35.7 |  |  | 36.4 |
Deferred income taxes: |  |  |  |  |
U.S. Federal | 3.0 |  |  | (0.2 | ) |  | (4.6 | )
U.S. State | (0.8 | ) |  | — |  |  | (0.4 | )
Foreign | 1.1 |  |  | 17.5 |  |  | 18.1 |
| 3.3 |  |  | 17.3 |  |  | 13.1 |
Total | $ | 20.5 |  |  | $ | 53.0 |  |  | $ | 49.5 |
Income from continuing operations before income taxes and income from equity affiliates included income of $77.2 million in 2014, $70.0 million in 2013, and $104.4 million in 2012 from operations outside the United States. A reconciliation of income taxes computed at the U.S. Federal statutory income tax rate to the provision for income taxes is as follows ($ in millions):
| For the Years Ended December 31,
| 2014 |  | 2013 |  | 2012
| Amount |  | Percent |  | Amount |  | Percent |  | Amount |  | Percent
Tax provision at U.S. statutory rate | $ | 37.9 |  |  | 35.0 | % |  | $ | 44.7 |  |  | 35.0 | % |  | $ | 52.4 |  |  | 35.0 | %
Foreign income tax rate differential | (16.1 | ) |  | (14.9 | ) |  | 8.2 |  |  | 6.4 |  |  | (4.5 | ) |  | (3.0 | )
Tax effect of foreign legal structure | (0.4 | ) |  | (0.4 | ) |  | — |  |  | — |  |  | — |  |  | — |
Domestic production deduction | (1.0 | ) |  | (0.9 | ) |  | (0.9 | ) |  | (0.7 | ) |  | (1.0 | ) |  | (0.7 | )
Adjustments to valuation allowances | 0.4 |  |  | 0.4 |  |  | 1.2 |  |  | 0.9 |  |  | — |  |  | — |
French business tax classified as income tax | 1.7 |  |  | 1.6 |  |  | 2.2 |  |  | 1.7 |  |  | 2.4 |  |  | 1.6 |
Other foreign taxes, net | (0.6 | ) |  | (0.6 | ) |  | (1.4 | ) |  | (1.1 | ) |  | (0.7 | ) |  | (0.5 | )
Other, net | (1.4 | ) |  | (1.3 | ) |  | (1.0 | ) |  | (0.7 | ) |  | 0.9 |  |  | 0.7 |
Provision for income taxes | $ | 20.5 |  |  | 18.9 | % |  | $ | 53.0 |  |  | 41.5 | % |  | $ | 49.5 |  |  | 33.1 | %
The decrease in our 2014 effective tax rate reflects the change in our geographic mix of earnings with a concentration of earnings from lower taxed jurisdictions. The lower rate was also driven primarily by global asset realignment actions taken during the early part of 2014 to improve the Company's use of critical assets along with a reorganization of foreign operations under a new holding company structure. The 2013 and 2012 foreign income tax rate differential includes the effect of not recognizing the tax benefits of a tax holiday at the RTL Philippines facility attributable to asset impairment charges. The amount of unrecognized tax benefits was $13.4 million and $2.0 million during the years ended December 31, 2013 and 2012, respectively. The RTL Philippines tax holiday expired in December 2013. The effect of not recognizing a tax benefit due to the tax holiday on net income per share (diluted) was $0.43 and $0.06 for 2013 and 2012, respectively. During 2013, the Company increased its valuation allowances by $1.2 million primarily attributed to partially reserving the net deferred tax assets in Poland due to the change in tax status for that entity in early 2014. The Company considers the undistributed earnings of certain foreign subsidiaries to be indefinitely reinvested. Accordingly, no provision for U.S. federal and state income taxes has been made thereon. Upon distribution of those earnings in the form of dividends, loans to the U.S. parent, or otherwise, the Company could be liable for both U.S. income taxes (subject to an adjustment for foreign tax credits) and withholding taxes payable to foreign tax authorities. Determination of the amount of unrecognized deferred U.S. tax liability is not practicable because of the complexities associated with this hypothetical calculation. Net deferred income tax assets (liabilities) were comprised of the following ($ in millions):
| December 31,
Current deferred income tax assets attributable to: | 2014 |  | 2013
Inventories | $ | 0.6 |  |  | $ | (1.0 | )
Postretirement and other employee benefits | 3.1 |  |  | 1.9 |
Other accrued liabilities | 4.3 |  |  | 6.0 |
Valuation allowances | (0.7 | ) |  | (3.0 | )
Foreign tax incentives | — |  |  | 2.3 |
Other | 1.9 |  |  | 3.9 |
Net current deferred income tax assets | $ | 9.2 |  |  | $ | 10.1 |
Noncurrent deferred income tax assets attributable to: |  |  |
Operating loss carryforwards | $ | 17.7 |  |  | $ | 8.8 |
Tax credit carryforwards | — |  |  | — |
Postretirement and other employee benefits | 0.3 |  |  | — |
Accumulated depreciation, amortization and impairment | 10.8 |  |  | — |
Valuation allowances | (28.7 | ) |  | (9.8 | )
Other | (0.1 | ) |  | 1.0 |
Net noncurrent deferred income tax assets | $ | — |  |  | $ | — |
Noncurrent deferred income tax liabilities attributable to: |  |  |
Accumulated depreciation and amortization | $ | (70.3 | ) |  | $ | (74.3 | )
Operating loss carryforwards | 8.9 |  |  | 14.3 |
Valuation allowance | (7.8 | ) |  | (7.5 | )
Postretirement and other employee benefits | 16.2 |  |  | 13.1 |
Basis difference of acquired intangible assets | (22.1 | ) |  | (29.9 | )
Other | 3.7 |  |  | 3.4 |
Net noncurrent deferred income tax liabilities | $ | (71.4 | ) |  | $ | (80.9 | )
Net deferred tax assets in Brazil, the Philippines and Spain tax jurisdictions are fully reserved by valuation allowances. Total gross deferred income tax assets were $90.1 million and $43.1 million at December 31, 2014 and 2013, respectively. Total gross deferred income tax liabilities were $152.3 million and $113.9 million at December 31, 2014 and 2013, respectively. The net operating loss carryforward balances, or NOLs, were primarily generated due to operating losses incurred in Brazil and as a result of lower operating earnings together with substantial restructuring expenses incurred in Brazil and France. Also, NOLs had been generated since 2003 by the SMH tax group in France and by SM-Spain since its formation in 1997. As of December 31, 2014 the Company had approximately $97.5 million of operating loss carryforwards available to reduce future taxable income. Under current tax laws, remaining NOLs in France, Spain and Brazil carry forward indefinitely and NOLs in the Philippines expire 3 years subsequent to year generated. NOLs of approximately $18.4 million in the Philippines will expire from 2015 through 2017 and NOLs in the United States totaling $11.7 million related to various states will expire from 2022 through 2032 if not utilized against taxable income. The remaining $3.3 million, $20.7 million, and $43.4 million of NOLs are related to France, Brazil and Spain, respectively, and have no expiration date. The Company's deferred tax asset valuation allowances are primarily the result of uncertainties regarding the future realization of recorded tax benefits on tax loss carryforwards for certain entities. The valuation allowance on deferred tax assets associated with NOLs in Spain totaled $12.2 million as of December 31, 2014, fully reserving the related deferred tax asset. The valuation allowances in Brazil and the Philippines totaled $7.9 million and $16.5 million, respectively, fully reserving the net deferred tax asset balances. The Company's assumptions, judgments and estimates relative to the valuation of these net deferred tax assets take into account available positive and negative evidence of realizability, including recent financial performance, the ability to realize benefits of restructuring and other recent actions, projections of the amount and category of future taxable income and tax planning strategies. Actual future operating results and the underlying amount and category of income in future periods could differ from the Company's current assumptions, judgments and estimates. The Company believes that it will generate sufficient future taxable income to realize the tax benefits related to the remaining net deferred tax assets, including the deferred tax assets associated with the NOLs in France. The following table summarizes the activity related to the Company's unrecognized tax benefits related to income taxes ($ in millions):
| December 31, 2014
Uncertain tax position balance at beginning of year | $ | 1.8 |
Increases related to current year tax positions | — |
Uncertain tax position balance at end of year | $ | 1.8 |
All unrecognized tax positions would impact the Company's effective tax rate if recognized. The Company's policy with respect to penalties and interest in connection with income tax assessments or related to unrecognized tax benefits is to classify penalties as provision for income taxes and interest as interest expense in its consolidated income statement. There were no material income tax penalties or interest accrued during the years ended December 31, 2014, 2013 or 2012. The Company files income tax returns in the U.S. Federal and several state jurisdictions as well as in many foreign jurisdictions. With certain exceptions, the Company is no longer subject to U.S. Federal, state and local, or foreign income tax examinations for years before 2011.

X
- 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 -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
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration