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Income Taxes | 12 Months Ended
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Dec. 31, 2017
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes For financial reporting purposes, income before income taxes includes the following components ($ in millions):
| For the Years Ended December 31,
| 2017 |  | 2016 |  | 2015
United States | $ | 42.6 |  |  | $ | 27.7 |  |  | $ | 41.6 |
Foreign | 58.9 |  |  | 65.7 |  |  | 63.9 |
Total | $ | 101.5 |  |  | $ | 93.4 |  |  | $ | 105.5 |
An analysis of the provision (benefit) for income taxes from continuing operations follows ($ in millions):
| For the Years Ended December 31,
| 2017 |  | 2016 |  | 2015
Current income taxes: |  |  |  |  |
U.S. federal | $ | 53.2 |  |  | $ | 14.3 |  |  | $ | 13.0 |
U.S. state | 0.6 |  |  | 0.1 |  |  | 1.1 |
Foreign | 14.2 |  |  | 17.2 |  |  | 14.2 |
| 68.0 |  |  | 31.6 |  |  | 28.3 |
Deferred income taxes: |  |  |  |  |
U.S. federal | (1.3 | ) |  | (2.7 | ) |  | (5.8 | )
U.S. state | 2.9 |  |  | (4.0 | ) |  | 0.1 |
Foreign | — |  |  | (9.5 | ) |  | (1.0 | )
| 1.6 |  |  | (16.2 | ) |  | (6.7 | )
Total | $ | 69.6 |  |  | $ | 15.4 |  |  | $ | 21.6 |
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,
| 2017 |  | 2016 |  | 2015
| Amount |  | Percent |  | Amount |  | Percent |  | Amount |  | Percent
Tax provision at U.S. statutory rate | $ | 35.6 |  |  | 35.0 | % |  | $ | 32.6 |  |  | 35.0 | % |  | $ | 36.9 |  |  | 35.0 | %
Foreign income tax rate differential | 0.7 |  |  | 0.7 |  |  | (9.0 | ) |  | (9.6 | ) |  | (16.2 | ) |  | (15.4 | )
State income tax, net of federal benefit | 2.7 |  |  | 2.6 |  |  | (2.5 | ) |  | (2.7 | ) |  | 1.1 |  |  | 1.1 |
Domestic production deduction | (2.4 | ) |  | (2.3 | ) |  | (0.9 | ) |  | (1.0 | ) |  | (1.5 | ) |  | (1.4 | )
Remeasurement of deferred taxes for tax law change | (11.8 | ) |  | (11.7 | ) |  | (7.0 | ) |  | (7.5 | ) |  | — |  |  | — |
Adjustments to valuation allowances | (2.8 | ) |  | (2.8 | ) |  | 3.5 |  |  | 3.7 |  |  | 1.4 |  |  | 1.3 |
U.S. tax reform transition tax | 51.4 |  |  | 50.6 |  |  | — |  |  | — |  |  | — |  |  | — |
Other, net | (3.8 | ) |  | (3.5 | ) |  | (1.3 | ) |  | (1.4 | ) |  | (0.1 | ) |  | (0.1 | )
Provision for income taxes | $ | 69.6 |  |  | 68.6 | % |  | $ | 15.4 |  |  | 16.5 | % |  | $ | 21.6 |  |  | 20.5 | %
On December 22, 2017, the Tax Cuts and Jobs Act of 2017 (the “Act”) was signed into law making significant changes to the Internal Revenue Code. Changes include, but are not limited to, a federal corporate tax rate decrease from 35% to 21% for tax years beginning after December 31, 2017. We are required to recognize the effect of the tax law changes in the period of enactment, such as determining the transition tax, remeasuring our U.S. deferred tax assets and liabilities as well as reassessing the net realizability of our deferred tax assets and liabilities. On December 22, 2017, the SEC staff issued Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act ("SAB 118"), which allows us to record provisional amounts during a measurement period not to extend beyond one year of the enactment date. In accordance with SAB 118, we have determined certain provisional amounts and reasonable estimates at December 31, 2017. The impact of the Act may differ from this estimate, possibly materially, due to, among other things, changes in interpretations and assumptions the Company has made, guidance that may be issued, and actions the Company may take as a result of the Act. In accordance with SAB 118, we have determined the provisional amounts and reasonable estimates of the transition tax and deferred tax remeasurement at December 31, 2017. The impact of the Act may differ from this estimate, possibly materially, due to, among other things, changes in interpretations and assumptions the Company has made, guidance that may be issued, and actions the Company may take as a result of the Act. We will complete our analysis over this measurement period ending December 22, 2018 and any adjustments during this measurement period will be included in net earnings from continuing operations as an adjustment to income tax expense in the reporting period when such adjustments are determined. The Company has not accounted for the tax impacts related to state taxes, the Global Intangible Low Tax Income, Base Erosion Anti Abuse Tax or Foreign Derived Intangible Income regimes or any of the other provisions of the Tax Legislation that are not effective until fiscal year 2018. Any subsequent adjustment to these amounts will be recorded to current tax expense in the quarter of 2018 when the analysis is complete. We previously considered the earnings in our non-U.S. subsidiaries to be indefinitely reinvested and, accordingly, recorded no deferred income taxes. Prior to the Transition Tax, we had an excess of the amount for financial reporting over the tax basis in our foreign subsidiaries, including undistributed foreign earnings. While the Transition Tax resulted in the reduction of the excess of the amount for financial reporting over the tax basis in our foreign subsidiaries, an actual repatriation from our non-U.S. subsidiaries could still be subject to additional foreign withholding taxes and U.S. state taxes. We have analyzed our global working capital and cash requirements and the potential tax liabilities attributable to a repatriation and have provisionally determined that we will not be repatriating any previously deemed indefinitely reinvested earnings. Net deferred income tax assets (liabilities) were comprised of the following ($ in millions):
| December 31,
| 2017 |  | 2016
Deferred Tax Assets |  |  |
Receivable allowances | $ | 0.4 |  |  | $ | 0.2 |
Reserves and accruals | 3.8 |  |  | 3.9 |
Inventory and other assets | 0.7 |  |  | 2.3 |
Postretirement and other employee benefits | 15.9 |  |  | 20.0 |
Net operating loss and tax credit carryforwards | 94.1 |  |  | 104.8 |
Intangibles | 73.6 |  |  | 76.6 |
Other | 4.7 |  |  | 0.1 |
| 193.2 |  |  | 207.9 |
Less: Valuation allowance | (182.5 | ) |  | (194.8 | )
Net deferred income tax assets | $ | 10.7 |  |  | $ | 13.1 |
Deferred Tax Liabilities |  |  |
Net fixed assets | $ | (40.5 | ) |  | $ | (34.4 | )
Investment in subsidiaries | (9.8 | ) |  | (4.1 | )
Derivatives | (1.3 | ) |  | — |
Other | (0.4 | ) |  | (0.7 | )
Net deferred income tax liabilities | $ | (52.0 | ) |  | $ | (39.2 | )
Total net deferred income tax liabilities | $ | (41.3 | ) |  | $ | (26.1 | )
As of December 31, 2017 the Company had approximately $92.8 million of tax affected operating loss carryforwards available to reduce future taxable income in various jurisdictions which will expire on various dates as follows:
| 2017
2018-2022 | $ | 3.4 |
2023-2034 | 12.7 |
Indefinite | 76.7 |
| 92.8 |
In addition, the Company has $1.3 million of state tax credits that will expire between 2018 - 2036. 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 as of December 31, 2017, in Luxembourg, Spain and the Philippines total $166.3 million, $9.1 million and $2.7 million respectively, fully reserving the net deferred tax asset balances in these locations. In addition, there is a valuation allowance on a tax credit receivable of $3.4 million in Brazil. We believe that it is more likely than not that the benefit from certain state tax attributes will not be realized. In recognition of this risk, we have provided a valuation allowance of $1.0 million on the related deferred tax assets. The Company's assumptions, judgments and estimates relative to the valuation of these net deferred tax assets take into account available positive and negative evidence of realizability, including recent financial performance, the ability to realize benefits of restructuring and other recent actions, projections of the amount and category of future taxable income and tax planning strategies. Actual future operating results and the underlying amount and category of income in future periods could differ from the Company's current assumptions, judgments and estimates. The Company believes that it will generate sufficient future taxable income to realize the tax benefits related to the remaining net deferred tax assets. The following table summarizes the activity related to the Company's unrecognized tax benefits related to income taxes ($ in millions):
| December 31,
| 2017 |  | 2016 |  | 2015
Uncertain tax position balance at beginning of year | $ | 2.4 |  |  | $ | 0.9 |  |  | $ | 1.8 |
Increases related to current year tax positions | 0.3 |  |  | 2.0 |  |  | — |
Increases related to prior year tax positions | 0.4 |  |  | — |  |  | — |
Decreases related to prior year tax positions | (2.0 | ) |  | — |  |  | — |
Decreases related to expiration of statute of limitations | (0.1 | ) |  | (0.5 | ) |  | (0.9 | )
Uncertain tax position balance at end of year | $ | 1.0 |  |  | $ | 2.4 |  |  | $ | 0.9 |
The liability for unrecognized tax benefits included $1.1 million as of December 31, 2017 that if recognized would impact the Company's effective tax rate. We believe that it is reasonably possible that a decrease of up to approximately $0.2 million in unrecognized tax benefits may be recognized by the end of 2018 as a result of a lapse of the statute of limitations and other regulatory filings. 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 Statements of Income. There were no material income tax penalties or interest accrued during the years ended December 31, 2017, 2016 and 2015. The Company files income tax returns, including returns for its subsidiaries, with federal, state, local and foreign jurisdictions. Currently, the company is under U.S. audit for tax years 2014 and 2015. The following tax years remain subject to examination by the respective major tax jurisdictions:
Jurisdiction | Fiscal Years
Belgium | 2014-2016
Brazil | 2012-2016
Canada | 2010-2016
China | 2014-2016
France | 2015-2016
Germany | 2013-2016
Hong Kong | 2011-2016
Luxembourg | 2013-2016
Philippines | 2014-2016
Poland | 2012-2016
Spain | 2013-2016
United Kingdom | 2011-2016
United States |
Federal | 2014-2016
State | 2014-2016

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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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