XML 30 R19.htm IDEA: XBRL DOCUMENT v3.19.1
Income Taxes
 3 Months Ended
Mar. 31, 2019
Accrued Income Taxes [Abstract]  
Income Taxes Income Taxes

Income tax expense attributable to our loss from continuing operations before income taxes differs from the amounts computed using the applicable income tax rate as a result of the following factors:
 
Three months ended
 
March 31,
 
2019
 
2018
 
in millions
 
 
 
 
Computed “expected” tax benefit (a)
$
53.0

 
$
124.9

Basis and other differences in the treatment of items associated with investments in subsidiaries and affiliates (b)
(79.1
)
 
(51.5
)
Non-deductible or non-taxable foreign currency exchange results
33.0

 
(80.6
)
Non-deductible or non-taxable interest and other items
(22.8
)
 
(13.8
)
Change in valuation allowances
(12.6
)
 
517.6

International rate differences (c)
12.2

 
6.8

Enacted tax law and rate changes
(9.4
)
 
13.8

Mandatory Repatriation Tax
—

 
(1,210.5
)
Other, net
(2.1
)
 
(16.7
)
Total income tax expense
$
(27.8
)
 
$
(710.0
)
_______________

(a)
The statutory or “expected” tax rates are U.K. rate of 19.0%.

(b)
These amounts reflect the net impact of differences in the treatment of income and loss items between financial reporting and tax accounting related to investments in subsidiaries and affiliates including the effects of foreign earnings.

(c)
Adjustments (either a benefit or an expense) to the “expected” tax benefit are for statutory rates in jurisdictions in which we operate that are outside of the U.K.

At March 31, 2019, our unrecognized tax benefits of $843.3 million included $740.2 million of tax benefits that would have a favorable impact on our effective income tax rate if ultimately recognized, after considering amounts that we would expect to be offset by valuation allowances and other factors.

During the next 12 months, it is reasonably possible that the resolution of ongoing examinations by tax authorities, as well as the expiration of statutes of limitation, could result in reductions to our unrecognized tax benefits related to tax positions taken as of March 31, 2019. The amount of any such reductions could range up to $185.0 million, of which approximately $75.0 million would have a positive impact on our effective tax rate. Other than the potential impacts of these ongoing examinations and the expected expiration of certain statutes of limitation, we do not expect any material changes to our unrecognized tax benefits during the next 12 months. No assurance can be given as to the nature or impact of any changes in our unrecognized tax positions during the next 12 months.

We are currently undergoing income tax audits in Belgium, the Netherlands and the U.S. Except as noted below, any adjustments that might arise from the foregoing examinations are not expected to have a material impact on our consolidated financial position, results of operations or cash flows. In the U.S., we have received notices of adjustment from the Internal Revenue Service with respect to our 2009 and 2010 income tax returns, and have entered into the appeals process with respect to the 2009 and 2010 matters. While we believe that the ultimate resolution of these proposed adjustments will not have a material impact on our consolidated financial position, results of operations or cash flows, no assurance can be given that this will be the case given the amounts involved and the complex nature of the related issues.

On April 23, 2019, the Dutch government approved legislation that limits certain tax consolidation provisions that would apply to our Dutch tax group. We are currently assessing the impact of this change on our consolidated financial position.