Income Taxes (Tables)

12 Months Ended

Dec. 31, 2017

Pre-tax Income Attributable to Operating Segments

The following sets forth the amount of income before income taxes attributable to each of the Company’s geographies for the years ended December 31, 2017, 2016 and 2015:



	Year Ended December 31,
(in millions)	2017		2016		2015
Income before income taxes:
United States	$	97.2	$	179.0	$	120.2
Rest of the world	91.2		92.8		70.9
	$	188.4	$	271.8	$	191.1

Reconciliation of Statutory Tax Rate to Effective Tax Rate

The Company’s effective income tax provision differs from the amount calculated using the statutory U.S. federal income tax rate, principally due to the following:



	Year Ended December 31,
	2017					2016					2015
(dollars in millions)	Amount			Percentage of Income Before Income Taxes		Amount			Percentage of Income Before Income Taxes		Amount			Percentage of Income Before Income Taxes
Statutory U.S. federal income tax	$	65.9		35.0	%	$	95.1		35.0	%	$	66.9		35.0	%
State income taxes, net of federal benefit	(0.6		)	(0.3	)%	8.0			2.9	%	1.1			0.6	%
Foreign repatriation, net of foreign tax credits	—			—		(4.3		)	(1.6	)%	—			—
Foreign tax differential	(11.6		)	(6.1	)%	(11.9		)	(4.4	)%	(10.0		)	(5.2	)%
Change in valuation allowances	8.3			4.4	%	20.2			7.4	%	2.5			1.3	%
Uncertain tax positions	0.2			0.0	%	(27.1		)	(9.9	)%	59.7			31.2	%
Subpart F income	2.7			1.4	%	2.0			0.7	%	1.9			1.0	%
Manufacturing deduction	(1.9		)	(1.0	)%	(4.2		)	(1.5	)%	(1.6		)	(0.8	)%
Remeasurement of deferred taxes	(69.7		)	(37.0	)%	—			—		—			—
Transition Tax	45.9			24.4	%	—			—		—			—
Permanent and other	8.5			4.5	%	9.0			3.3	%	4.9			2.5	%
Effective income tax provision	$	47.7		25.3	%	$	86.8		31.9	%	$	125.4		65.6	%

Tax Provision Summary

The income tax provision consisted of the following:



	Year Ended December 31,
(in millions)	2017			2016			2015
Current provision
Federal	$	73.5		$	73.5		$	107.1
State	3.1			4.5			7.2
Foreign	31.3			39.9			32.4
Total current	$	107.9		$	117.9		$	146.7
Deferred provision
Federal	$	(67.7	)	$	(21.4	)	$	(12.3	)
State	7.5			1.6			(3.7		)
Foreign	—			(11.3		)	(5.3		)
Total deferred	(60.2		)	(31.1		)	(21.3		)
Total income tax provision	$	47.7		$	86.8		$	125.4

Deferred Tax Assets and Liabilities Recognized in the Consolidated Balance Sheets

The net deferred tax assets and liabilities recognized in the accompanying Consolidated Balance Sheets, determined using the income tax rate applicable to each period, consist of the following:



	December 31,
(in millions)	2017			2016
Deferred tax assets:
Stock-based compensation	$	10.6		$	18.4
Accrued expenses and other	36.3			49.9
Net operating losses, foreign tax credits and other tax attribute carryforwards	92.9			98.5
Inventories	6.2			7.2
Transaction costs	13.4			10.2
Property, plant and equipment	2.8			3.4
Total deferred tax assets	162.2			187.6
Valuation allowances	(55.1		)	(45.2		)
Total net deferred tax assets	$	107.1		$	142.4
Deferred tax liabilities:
Intangible assets	$	(161.9	)	$	(242.4	)
Property, plant and equipment	(29.5		)	(42.4		)
Accrued expenses and other	(6.4		)	(9.7		)
Total deferred tax liabilities	(197.8		)	(294.5		)
Net deferred tax liabilities	$	(90.7	)	$	(152.1	)

Operating Loss and Tax Credit Carryforwards

The Company has the following gross income tax attributes available at December 31, 2017 and 2016, respectively:



(in millions)	2017		2016
State net operating losses (“SNOLs”)	$	133.9	$	131.2
U.S. federal foreign tax credits (“FTCs”)	12.2		12.2
U.S. state income tax credits ("SITCs")	8.1		4.0
Foreign net operating losses (“FNOLs”)	33.1		34.1
Charitable contribution carryover ("CCCs")	18.0		38.4

Reconciliation of Beginning and Ending Amount of Unrecognized Tax Benefits

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:



(in millions)
Balance as of December 31, 2015	$	69.8
Additions based on tax positions related to 2016	2.5
Additions for tax positions of prior years	29.2
Expiration of statutes of limitations	(5.0		)
Settlements of uncertain tax positions with tax authorities	(24.8		)
Balance as of December 31, 2016	$	71.7
Additions based on tax positions related to 2017	3.9
Additions for tax positions of prior years	11.4
Expiration of statutes of limitations	—
Settlements of uncertain tax positions with tax authorities	(2.5		)
Balance as of December 31, 2017	$	84.5