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Income Taxes
 12 Months Ended
Dec. 31, 2019
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,
 
2019
 
2018
 
2017
United States
$
60.0

 
$
55.8

 
$
42.6

Foreign
36.9

 
61.0

 
58.9

Total
$
96.9

 
$
116.8

 
$
101.5



An analysis of the provision (benefit) for income taxes from continuing operations follows ($ in millions):
 
For the Years Ended December 31,
 
2019
 
2018
 
2017
Current income taxes:
 
 
 
 
 
U.S. federal
$
8.1

 
$
(9.2
)
 
$
53.2

U.S. state
0.8

 
0.8

 
0.6

Foreign
9.7

 
11.6

 
14.2

 
18.6

 
3.2

 
68.0

Deferred income taxes:
 
 
 
 
 
U.S. federal
2.3

 
3.6

 
(1.3
)
U.S. state
(1.9
)
 
1.4

 
2.9

Foreign
(3.8
)
 
2.5

 
—

 
(3.4
)
 
7.5

 
1.6

Total
$
15.2

 
$
10.7

 
$
69.6



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,
 
2019
 
2018
 
2017
 
Amount
 
Percent
 
Amount
 
Percent
 
Amount
 
Percent
Tax provision at U.S. statutory rate
$
20.3

 
21.0
 %
 
$
24.5

 
21.0
 %
 
$
35.6

 
35.0
 %
Foreign income tax rate differential
0.6

 
0.5

 
2.5

 
2.2

 
(3.3
)
 
(3.3
)
Income from passthrough entities
1.7

 
1.6

 
0.7

 
0.6

 
6.4

 
6.4

Global intangible low tax inclusion
(0.1
)
 
(0.1
)
 
7.0

 
6.0

 
—

 
—

Foreign derived intangible income
(0.2
)
 
(0.2
)
 
(4.2
)
 
(3.6
)
 
—

 
—

State income tax, net of federal benefit
(0.2
)
 
(0.2
)
 
1.7

 
1.5

 
2.7

 
2.6

Adjustments to valuation allowances
(3.7
)
 
(3.8
)
 
(2.5
)
 
(2.1
)
 
(2.8
)
 
(2.8
)
Transition tax
(0.7
)
 
(0.6
)
 
(11.6
)
 
(10.0
)
 
51.4

 
50.6

Other tax credits
(2.0
)
 
(2.1
)
 
(2.6
)
 
(2.3
)
 
(2.3
)
 
(2.3
)
Foreign tax credits
(3.5
)
 
(3.6
)
 
(5.1
)
 
(4.4
)
 
(9.2
)
 
(9.0
)
Other foreign operational taxes
2.9

 
3.0

 
3.1

 
2.7

 
4.2

 
4.2

Domestic production deduction
—

 
—

 
—

 
—

 
(2.4
)
 
(2.3
)
Remeasurement of deferred taxes due to tax law
0.9

 
1.0

 
(1.8
)
 
(1.5
)
 
(11.8
)
 
(11.7
)
Non-deductible compensation
1.1

 
1.1

 
0.4

 
0.3

 
—

 
—

Other, net
(1.9
)
 
(1.9
)
 
(1.4
)
 
(1.2
)
 
1.1

 
1.2

Provision for income taxes
$
15.2

 
15.7
 %
 
$
10.7

 
9.2
 %
 
$
69.6

 
68.6
 %

On December 22, 2017, the Tax Act was enacted into law effective January 1, 2018. The new legislation contains several key tax provisions that affected the Company, which include but are not limited to a one-time deemed repatriation tax on post-1986 accumulated earnings and profits of the undistributed earnings of foreign subsidiaries (“transition tax”), a reduction of the federal corporate income tax rate from 35% to 21%, and other U.S. reform items. In 2018, the Company decreased its provisional estimates of transition tax, related currency implications, state taxes and deferred tax rate change effect of the new law by $13.9 million. The reduction from the provisional 2017 amounts were primarily due to the transition tax further analysis of accumulated earnings and foreign taxes paid. As of December 31, 2018, the Company completed its accounting for the tax effects of the Tax Act.

A $15.2 million and $10.7 million provision for income taxes in the years ended December 31, 2019 and 2018, respectively, resulted in an effective tax rate of 15.7 percent as compared with 9.2 percent in 2018. The Company’s effective tax rates differ from the statutory federal income tax rate of 21% due to varying tax rates in foreign jurisdictions, the relative amounts of income we earn in those jurisdictions and year over year adjustments of a $4.2 million reduction due to the one-time Brazil ICMS litigation accrual as compared to the prior year $13 million U.S. tax reform reduction.

Prior to the passage of the U.S. Tax Act, the Company asserted that substantially all of the undistributed earnings of its foreign subsidiaries were considered indefinitely reinvested and accordingly, no deferred taxes were provided. Due to the Tax Act, the Company has significant previously taxed earnings and profits from its foreign subsidiaries, as a result of transition tax, that is generally able to be repatriated free of U. S. federal tax. In addition, future earnings of foreign subsidiaries are generally expected to be able to be repatriated free of U.S. federal income tax because these earnings were taxed in the U.S. under the GILTI regime or would be eligible for a 100% dividends received deduction. Therefore, the Company does not intend to assert indefinite reinvestment on cash earnings generated after December 31, 2017. As a result, the Company has provided for non-U.S. withholding taxes, U.S. federal tax related to currency movement on previously-taxed earnings and profits, and U.S. state taxes on unremitted post-2017 earnings.

Net deferred income tax assets (liabilities) were comprised of the following ($ in millions):
 
December 31,
 
2019
 
2018
Deferred Tax Assets
 
 
 
Receivable allowances
$
0.4

 
$
0.8

Inventory and other assets
—

 
1.1

Postretirement and other employee benefits
19.0

 
14.8

Derivatives
0.1

 
—

Net operating loss and tax credit carryforwards
93.7

 
93.3

Capital loss carryforward
6.9

 
—

Investment in subsidiaries
—

 
5.6

Intangibles
45.7

 
60.0

Other
3.9

 
1.2

 
169.7

 
176.8

Less: Valuation allowance
(157.4
)
 
(172.1
)
Net deferred income tax assets
$
12.3

 
$
4.7

 
 
 
 
Deferred Tax Liabilities
 
 
 
Net property, plant and equipment
$
(52.6
)
 
$
(51.9
)
Accruals and other liabilities
(0.6
)
 
(0.2
)
Investment in subsidiaries
(3.5
)
 
—

Derivatives
—

 
(0.3
)
Other
(0.1
)
 
—

Net deferred income tax liabilities
$
(56.8
)
 
$
(52.4
)
 
 
 
 
Total net deferred income tax liabilities
$
(44.5
)
 
$
(47.7
)


As of December 31, 2019 the Company had approximately $90.5 million of tax-effected operating loss carryforwards available to further reduce future taxable income in various jurisdictions which will expire on various dates as follows:
 
2019
2020-2023
$
0.2

2024-2035
15.3

Indefinite
75.0

 
$
90.5



In addition, the Company has $1.5 million of state tax credits that will expire between 2020 - 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, 2019, in Luxembourg, Spain and the Philippines total $143.4 million, $8.4 million and $0.4 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 $4.3 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 $1.1 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,
 
2019
 
2018
 
2017
Uncertain tax position balance at beginning of year
$
1.1

 
$
1.0

 
$
2.4

Increases related to current year tax positions
0.6

 
0.6

 
0.3

Increases related to prior year tax positions
—

 
—

 
0.4

Decreases related to prior year tax positions
—

 
(0.2
)
 
(2.0
)
Decreases related to expiration of statute of limitations
—

 
(0.3
)
 
(0.1
)
Uncertain tax position balance at end of year
$
1.7

 
$
1.1

 
$
1.0



The liability for unrecognized tax benefits included $1.7 million as of December 31, 2019 that if recognized would impact the Company's effective tax rate. We do not anticipate a decrease in unrecognized tax benefits by the end of 2020 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, 2019, 2018 and 2017.
 
The Company files income tax returns, including returns for its subsidiaries, with federal, state, local and foreign jurisdictions. The Company finalized the U.S. federal audit for tax years 2014 and 2015 during 2019. All expected impacts have been recorded in 2018 or earlier. The following tax years remain subject to examination by the respective major tax jurisdictions:
Jurisdiction
Fiscal Years
Belgium
2017-2019
Brazil
2014-2019
Canada
2015-2019
China
2017-2019
France
2016-2019
Germany
2015-2019
Hong Kong
2013-2019
Luxembourg
2014-2019
Philippines
2016-2019
Poland
2013-2019
Spain
2015-2019
United Kingdom
2016-2019
United States
 
Federal
2016-2019
State
2014-2019