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Income Taxes | 12 Months Ended
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Dec. 31, 2018
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes Income taxes have been based on the following components of earnings (loss) before income taxes and equity in (earnings) loss of unconsolidated entity for the years ended December 31, 2018, 2017 and 2016:
| 2018 |  | 2017 |  | 2016
United States | $ | (5.8 | ) |  | $ | 65.6 |  |  | $ | 48.4 |
Foreign | 2.9 |  |  | 25.6 |  |  | 10.9 |
Total | $ | (2.9 | ) |  | $ | 91.2 |  |  | $ | 59.3 |
The components of income tax (benefit) expense for the years ended December 31, 2018, 2017 and 2016, were as follows:
| 2018 |  | 2017 |  | 2016
Federal: |  |  |  |  |
Current | $ | 4.8 |  |  | $ | 1.4 |  |  | $ | 32.0 |
Deferred | (7.3 | ) |  | (5.5 | ) |  | (20.0 | )
State: |  |  |  |  |
Current | (2.1 | ) |  | 2.7 |  |  | 3.9 |
Deferred | 0.4 |  |  | (0.5 | ) |  | (5.3 | )
Foreign: |  |  |  |  |
Current | 2.0 |  |  | 2.4 |  |  | 3.7 |
Deferred | (7.6 | ) |  | (16.5 | ) |  | (1.3 | )
Total income tax (benefit) expense | $ | (9.8 | ) |  | $ | (16.0 | ) |  | $ | 13.0 |
The following table outlines the reconciliation of differences between the Federal statutory tax rate and the Company’s income tax (benefit) expense for the years ended December 31, 2018, 2017 and 2016:
| 2018 |  | 2017 |  | 2016
Federal statutory rate | $ | (0.6 | ) |  | $ | 31.9 |  |  | $ | 20.8 |
Adjustment to valuation allowances | (6.9 | ) |  | (20.0 | ) |  | 1.0 |
Adjustment of uncertain tax positions | (3.7 | ) |  | (2.6 | ) |  | 0.9 |
State taxes, net of federal benefit | (2.0 | ) |  | 2.0 |  |  | (2.1 | )
Foreign rate differential | (0.8 | ) |  | (2.9 | ) |  | (4.8 | )
Impact from foreign branches | 2.6 |  |  | 7.1 |  |  | 3.6 |
Adjustment of deferred tax liabilities | 1.4 |  |  | (1.7 | ) |  | 2.2 |
Federal rate change | (0.8 | ) |  | (28.8 | ) |  | — |
Domestic production activity deduction | — |  |  | (0.9 | ) |  | (3.3 | )
Loss on foreign investment | — |  |  | — |  |  | (4.7 | )
Other | 1.0 |  |  | (0.1 | ) |  | (0.6 | )
Income tax (benefit) expense | $ | (9.8 | ) |  | $ | (16.0 | ) |  | $ | 13.0 |
The $6.9 million adjustment to valuation allowance in 2018 primarily relates to net operating losses and deferred tax assets related to property, plant and equipment expected to be realized in the future by one of the Company’s Mexican subsidiaries based on current and projected future profitability. The $20.0 million adjustment to valuation allowance in 2017 primarily relates to an income tax credit utilized by the Company’s Polish subsidiaries due to sustainable profitability. The Company determined the utilization of the credit is sufficient to record a reduction in the valuation allowance in order to reflect the current net realizable value of related deferred tax assets based on estimated credit utilization through 2026, the year the credit expires. Deferred Income Taxes The significant deferred tax assets and liabilities as of December 31, 2018 and 2017, were as follows:
| 2018 |  | 2017
Deferred tax assets: |  |  |
Net operating loss and other tax carryforwards | $ | 125.1 |  |  | $ | 129.6 |
Interest limitation | 47.1 |  |  | 43.7 |
Pension and workers compensation benefits | 46.0 |  |  | 42.7 |
Accrued compensation | 16.6 |  |  | 20.2 |
Accrued liabilities | 14.1 |  |  | 19.3 |
Goodwill and intangible assets | 11.4 |  |  | 7.5 |
Allowance for doubtful accounts | 6.4 |  |  | 7.3 |
Other | 7.3 |  |  | 9.4 |
Total deferred tax assets | 274.0 |  |  | 279.7 |
Valuation allowance | (115.2 | ) |  | (126.9 | )
Net deferred tax assets | $ | 158.8 |  |  | $ | 152.8 |
Deferred tax liabilities: |  |  |
Property, plant and equipment | $ | (153.8 | ) |  | $ | (165.0 | )
Other | (9.7 | ) |  | (8.5 | )
Total deferred tax liabilities | (163.5 | ) |  | (173.5 | )
Net deferred tax liabilities | $ | (4.7 | ) |  | $ | (20.7 | )
The Company has recorded deferred income tax liabilities of $32.1 million and $41.9 million as of December 31, 2018 and 2017, respectively, which were included in deferred income taxes in the consolidated balance sheets. The Company has also recorded deferred income tax assets of $27.4 million and $21.2 million as of December 31, 2018 and 2017, respectively, which were included in other long-term assets in the consolidated balance sheets. At December 31, 2018, the Company had the following gross amounts of tax-related carryforwards:
• | Net operating loss carryforwards of $99.1 million and $501.5 million for foreign and state, respectively. Of the foreign net operating loss carryforwards, $30.2 million is available without expiration, while the remainder expires through 2038. The state net operating loss carryforwards expire in varying amounts through 2038.
• | Capital loss carryforwards of $24.6 million and $13.6 million for federal and state, respectively. Of the federal capital loss carryforwards, $6.2 million expires in 2019, $1.1 million expires in 2021 and $17.3 million expires in 2022; and of the state capital loss carryforwards, $4.6 million expires in 2019, $0.5 million expires in 2021 and $8.5 million expires in 2022.
• | Various credit carryforwards of $30.1 million and $44.1 million for foreign and state, respectively. The foreign credit carryforward expires in 2026. The state credit carryforwards include $32.0 million that is available without expiration, while the remainder expires through 2033.
As of December 31, 2018, the Company has recorded a valuation allowance of $115.2 million on its consolidated balance sheet primarily related to the tax-affected amounts of the above carryforwards. The valuation allowance includes $5.9 million, $53.6 million and $55.7 million of federal, foreign and state deferred tax assets, respectively, that are not expected to be realized. Uncertain Tax Positions The following table summarizes the activity of the Company’s liability for unrecognized tax benefits at December 31, 2018, 2017 and 2016:
| 2018 |  | 2017 |  | 2016
Balance at beginning of period | $ | 21.6 |  |  | $ | 29.6 |  |  | $ | 29.8 |
Additions for tax positions of the current year | — |  |  | 2.3 |  |  | 0.3 |
Additions for tax positions of prior years | 0.5 |  |  | 1.3 |  |  | 1.0 |
Reductions for tax positions of prior years | (0.8 | ) |  | (11.3 | ) |  | (0.7 | )
Lapses of applicable statutes of limitations | (6.1 | ) |  | (0.3 | ) |  | (0.8 | )
Settlements during the period | (0.8 | ) |  | — |  |  | — |
Balance at end of period | $ | 14.4 |  |  | $ | 21.6 |  |  | $ | 29.6 |
As of December 31, 2018, $14.4 million of unrecognized tax benefits would impact the Company’s effective tax rate, if recognized. Of that amount, it is reasonably possible that $4.6 million of the total amount of unrecognized tax benefits will decrease within the next twelve months due to resolution of income tax audits or statute expirations. The Company classified interest (income) expense and any related penalties (refunds) related to income tax uncertainties as a component of income tax (benefit) expense. The following table summarizes the Company’s interest (income) expense related to tax uncertainties and penalties recognized during the years ended December 31, 2018, 2017 and 2016:
| 2018 |  | 2017 |  | 2016
Interest (income) expense | $ | (2.8 | ) |  | $ | (2.5 | ) |  | $ | 1.0 |
Penalties (refunds) | (0.4 | ) |  | 0.1 |  |  | — |
Accrued interest and penalties related to income tax uncertainties are reported as components of other current liabilities and other long-term liabilities in the consolidated balance sheets. The following table summarizes the Company’s liabilities for accrued interest and penalties related to income tax uncertainties at December 31, 2018 and 2017:
| December 31, 2018 |  | December 31, 2017
| Accrued interest |  | Accrued penalties |  | Accrued interest |  | Accrued penalties
Other current liabilities | $ | 0.2 |  |  | $ | 0.1 |  |  | $ | 0.1 |  |  | $ | 0.2 |
Other long-term liabilities | 0.3 |  |  | — |  |  | 3.2 |  |  | 0.3 |
Total liabilities | $ | 0.5 |  |  | $ | 0.1 |  |  | $ | 3.3 |  |  | $ | 0.5 |
The Company has tax years from 2014 through 2018 that remain open and subject to examination by the Internal Revenue Service. Tax years from 2013 through 2018 remain open and subject to examination in the Company’s various major state jurisdictions within the United States. On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Act. The Tax Act makes broad and complex changes to the U.S. tax code, including, but not limited to, (1) reducing the U.S. federal corporate tax rate from 35 percent to 21 percent; (2) requiring companies to pay a one-time transition tax on certain unrepatriated earnings of foreign subsidiaries; (3) generally eliminating U.S. federal income taxes on dividends from foreign subsidiaries; (4) requiring a current inclusion in U.S. federal taxable income of certain earnings of controlled foreign corporations; (5) creating a new limitation on deductible interest expense; (6) creating the base erosion anti-abuse tax, a new minimum tax; (7) the repeal of the domestic production activity deduction; and (8) bonus depreciation that will allow for full expensing of qualified property. The SEC staff issued Staff Accounting Bulletin No. 118 (“SAB 118”), which provides guidance on accounting for the tax effects of the Tax Act. SAB 118 provides a measurement period that should not extend beyond one year from the Tax Act enactment date for companies to complete the accounting under ASC 740. In accordance with SAB 118, a company must reflect the income tax effects of those aspects of the Tax Act for which the accounting under ASC 740 is complete. To the extent that a company’s accounting for certain income tax effects of the Tax Act is incomplete, but it is able to determine a reasonable estimate, it must record a provisional estimate in the financial statements. If a company cannot determine a provisional estimate to be included in the financial statements, it should continue to apply ASC 740 on the basis of the provisions of the tax laws that were in effect immediately before the enactment of the Tax Act. The Company applied the guidance in SAB 118 when accounting for the enactment-date effects of the Tax Act in 2017 and throughout 2018. As of December 31, 2017, the Company had not completed the accounting for all of the enactment-date income tax effects of the Tax Act for the following aspects: (1) remeasurement of deferred tax assets and liabilities due to the reduced U.S. federal corporate rate; (2) deemed repatriation transition tax; and (3) global intangible low-tax income (“GILTI”). As of December 31, 2018, the Company has completed the accounting for all the enactment-date income tax effects of the Tax Act. As discussed further below, during the year ended December 31, 2018, the Company recognized adjustments of $0.8 million to the preliminary provisional amount recorded at December 31, 2017, and included these adjustments as a component of income tax expense. Reduction of U.S. federal corporate rate: The Tax Act reduced the corporate tax rate to 21 percent, effective January 1, 2018. The Company had recorded a provisional decrease of $23.7 million to its deferred tax liabilities, with a corresponding net adjustment to deferred income tax expense. Upon refinement of the calculation during the year ended December 31, 2018, the Company increased the provisional adjustment by $0.8 million to $24.5 million, which was included as a component of income tax expense. Deemed Repatriation Transition Tax: The Deemed Repatriation Transition Tax (“Transition Tax”) is a tax on previously untaxed accumulated and current earnings and profits (“E&P”) of certain foreign subsidiaries. To determine the amount of the Transition Tax, the Company must determine, in addition to other factors, the amount of post-1986 E&P of the relevant subsidiaries, as well as the amount of non-U.S. income taxes paid on such earnings. After further analysis, the Company concluded that its Transition Tax was zero based on the aggregate post-1986 foreign earnings and profits deficit of the relevant subsidiaries. Therefore, there was no change from the initial estimate as of December 31, 2017. Global intangible low taxed income: The Tax Act creates a new requirement that certain income (i.e. GILTI) earned by controlled foreign corporations (“CFCs”) must be included currently in the gross income of the CFCs’ U.S. shareholder. GILTI is the excess of the shareholder’s “net CFC tested income” over the net deemed tangible income return, which is currently defined as the excess of (1) ten percent of the aggregate of the U.S. shareholder’s pro rata share of the qualified business asset investment of each CFC with respect to which it is a U.S. shareholder over (2) the amount of certain interest expense taken into account in the determination of net CFC-tested income. Under GAAP, the Company is allowed to make an accounting policy choice of either (1) treating taxes due on future U.S. inclusions in taxable income related to GILTI as current-period expense when incurred (the “period cost method”) or (2) factoring such amounts into a company’s measurement of its deferred taxes (the “deferred method”). The Company has elected to account for GILTI as a period cost. Accordingly, this income has been included as a component of current income tax expense for the year ended December 31, 2018. As a result of the Tax Act, historical earnings in certain foreign subsidiaries became subject to the U.S. Transition Tax, as described above. However, an actual repatriation from these subsidiaries could be subject to additional foreign and U.S. state income taxes. The Company considers its foreign earnings to be indefinitely invested. Accordingly, the Company does not provide for, nor expect to incur, any significant, additional taxes which could become payable upon repatriation of such amounts.

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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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