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Income Taxes | 3 Months Ended
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Mar. 31, 2019
Income Tax Disclosure [Abstract] |
Income Taxes |
9. | INCOME TAXES
Income taxes are recognized for the amount of taxes payable or refundable for the current year and deferred tax liabilities and assets for the future tax consequences of events that have been recognized in our consolidated financial statements or tax returns. The effects of income taxes are measured based on enacted tax laws and rates. We elect to account for the tax associated with the Global Intangible Low-Taxed Income (GILTI) provision of the 2017 Tax Cuts and Jobs Act in the period in which it is incurred. The GILTI provisions require entities to include in its U.S. income tax return foreign subsidiary earnings in excess of an allowable return on the foreign subsidiary’s tangible assets. For the three months ended March 31, 2019, our effective tax rate increased by approximately 8% as a result of the GILTI provisions due to our U.S. federal tax loss carryforward position, which restricts our ability to recognize the associated foreign tax credits and a deduction of up to 50% of the GILTI income. Due to our U.S. federal tax loss carryforward position, there is no impact to cash taxes related to the GILTI provisions. In the first quarter of 2019, we recorded an additional valuation allowance with a tax impact of $0.2 million against our net deferred tax assets primarily due to uncertainty regarding the ability to utilize federal net operating losses and credit carryforwards. In assessing the need for a valuation allowance, management considers all available positive and negative evidence in its analysis. Based on this analysis, we recorded a valuation allowance for the portion of deferred tax assets where the weight of the evidence indicated it is more likely than not that the deferred tax assets will not be realized. As of March 31, 2019 and December 31, 2018, we had $29.9 million and $29.6 million, respectively, of gross unrecognized tax benefits. As of March 31, 2019, if such benefits were to be recognized, approximately $19.9 million would be recorded as a component of income tax expense, thereby affecting our effective tax rate. We, or one of our subsidiaries, file income tax returns with the United States Internal Revenue Service, as well as various state and foreign authorities. The following table summarizes, by major jurisdiction, tax years that remain subject to examination:
| Open Tax Years |
Jurisdiction | Examinations not yet initiated |  |  | Examination in progress |
United States |  |  |  |  |
Federal | 2015 - 2018 |  |  | N/A |
State | 2014 - 2018 |  |  | N/A |
Canada(1) | 2011-2013; 2018 |  |  | 2014 - 2017 |
Germany(1) | 2016 - 2018 |  |  | 2012 - 2015 |
France | 2018 |  |  | 2015 - 2017 |
United Kingdom | 2017 - 2018 |  |  | N/A |
Philippines | 2015, 2018 |  |  | 2016, 2017 |
(1) | includes provincial or similar local jurisdictions, as applicable
The amount of income taxes we pay is subject to ongoing audits by federal, state and foreign tax authorities, which often result in proposed assessments. Management performs a comprehensive review of its global tax positions on a quarterly basis and accrues amounts for uncertain tax positions. Based on these reviews and the result of discussions and resolutions of matters with certain tax authorities and the closure of tax years subject to tax audit, reserves are adjusted as necessary. However, future results may include favorable or unfavorable adjustments to our estimated tax liabilities in the period the assessments are determined or resolved or as such statutes are closed. Due to potential for resolution of federal, state and foreign examinations, and the lapse of various statutes of limitation, it is reasonably possible our gross unrecognized tax benefits balance may decrease within the next twelve months by a range of zero to $6.3 million. Substantially all this range relates to tax positions taken in Germany and the U.S. We recognize interest and penalties related to uncertain tax positions as income tax expense. The following table summarizes information related to interest and penalties on uncertain tax positions:
| Three months ended March 31 |
In millions | 2019 |  |  |  | 2018 |
Interest expense (income) | $ | 0.1 |  |  |  | $ | 0.1 |
Penalties |  | — |  |  |  |  | — |
| March 31 |  |  |  | December 31 |
| 2019 |  |  |  | 2018 |
Accrued interest payable | $ | 1.2 |  |  |  | $ | 1.1 |

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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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