On December 22, 2017, the TCJA was enacted into law in the United States. The legislation contains several key tax provisions including the reduction of the corporate income tax rate to 21% effective January 1, 2018 and a one-time transition tax on foreign earnings which have not previously been subject to tax in the United States, as well as a variety of other changes, including limitation of the tax deductibility of interest expense, limitations for the deduction for net operating losses, new taxes on certain foreign-sourced earnings and modification or repeal of many business deductions and credits.

The SEC staff issued Staff Accounting Bulletin 118 (“SAB 118”) to address the application of GAAP in situations where a registrant does not have the necessary information available, prepared or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the TCJA. The Company applied the guidance in SAB 118 when accounting for the enactment-date effects of the TCJA in 2017 and throughout 2018. During the fourth quarter of 2018, the Company finalized the accounting for the enactment-date effects of the TCJA.

At December 31, 2017, the Company recorded a provisional income tax benefit for continuing operations totaling $46.3 million as a result of remeasuring U.S. federal deferred taxes for the change in statutory tax rate and a partial release of the U.S. federal valuation allowance due to changes in the carryforward period and limitation on the utilization of future net operating losses. The Company completed its analysis of the impact of the TCJA enactment-date effects on the U.S. federal valuation allowance and recorded $55.5 million of additional benefit for continuing operations in 2018, primarily due to the expected impact of global intangible low-taxed income (GILTI). To make this determination, the Company has adopted the tax law ordering approach for determining the impact of GILTI on the realizability of U.S. deferred tax assets.

The one-time transition tax is based on the Company’s total post-1986 earnings and profits (E&P), the tax on which the Company previously deferred from U.S. income taxes under U.S. law. At December 31, 2017, the Company believed foreign tax credits would be utilized to offset the one-time transition tax. Significant technical analysis was required to further substantiate the foreign earnings subject to the one-time transition tax as well as the utilization of foreign tax credits. Upon further analysis of the TCJA and notices or regulations issued and proposed by various regulatory agencies, the Company finalized its calculations of the transition tax and increased its tax expense for continuing operations by $13.7 million in the fourth quarter of 2018.

The TCJA subjects a U.S. shareholder to tax on GILTI earned by foreign subsidiaries for which an entity can make an accounting policy election to either recognize deferred taxes for temporary differences expected to reverse as GILTI in future years or provide for the tax expense related to GILTI in the year the tax is incurred. At December 31, 2017, the Company was still evaluating the effects of the GILTI provisions and as such, recorded no GILTI-related amounts and had not yet determined its accounting policy election. In 2018, the Company elected to account for GILTI in the year the tax is incurred.



	Year Ended December 31,
($ amounts in millions)	2018			2017			2016
Current:
U.S.:
Federal	$	14.9		$	(1.2	)	$	0.1
State and local	0.4			1.0			0.4
Foreign	63.2			65.7			0.6
Total current	78.5			65.5			1.1
Deferred:
U.S.:
Federal	(35.1		)	(78.4		)	(27.8		)
State and local	(4.3		)	(2.1		)	(2.2		)
Foreign	(15.3		)	(53.6		)	(12.4		)
Total deferred	(54.7		)	(134.1		)	(42.4		)
Income tax expense (benefit)	$	23.8		$	(68.6	)	$	(41.3	)



	Year Ended December 31,
($ amounts in millions)	2018			2017			2016
U.S. federal statutory tax rate	21.0		%	35.0		%	35.0		%

Taxes computed at U.S. statutory rate	$	(11.2	)	$	(91.1	)	$	(81.1	)
Impact of TCJA	(41.8		)	(46.3		)	—
Net change in reserve	(4.9		)	(10.6		)	(27.4		)
State income taxes, net of federal benefit	(3.1		)	1.7			(0.1		)
U.S. tax on foreign operations	31.2			35.0			17.7
Change in valuation allowances	27.5			43.3			53.1
Foreign tax on foreign operations	11.4			8.3			16.1
Change of tax rate	8.3			(19.4		)	11.8
Provision for tax on undistributed foreign earnings	7.0			1.5			11.4
Impact of transaction costs	—			—			(24.5		)
Settlement of Series B Convertible Preferred Stock	—			—			(34.3		)
Goodwill impairment	—			—			6.2
Other, net	(0.6		)	9.0			9.8
Income tax expense (benefit)	$	23.8		$	(68.6	)	$	(41.3	)

Effective tax rate	(44.7		)%	26.3		%	17.8		%



	December 31,
($ amounts in millions)	2018			2017
Deferred tax assets:
Net operating losses	$	224.5		$	323.0
Arysta outside basis differences	274.2			—
Employee benefits	38.6			40.3
Tax credits	38.5			62.0
Financing activities	29.1			24.3
Accrued liabilities	26.4			25.9
Interest carryforward	17.3			44.4
Accounts receivable	16.0			19.1
Research and development costs	11.8			10.3
Goodwill	10.3			19.5
Inventory	4.7			4.6
Other	10.2			20.7
Total deferred tax assets	701.6			594.1
Valuation allowance	(475.2		)	(391.7		)
Total deferred tax assets	226.4			202.4
Deferred tax liabilities:
Intangibles	631.2			710.4
Plant and equipment	31.8			24.8
Undistributed foreign earnings	29.5			21.9
Other	0.4			0.4
Total deferred tax liabilities	692.9			757.5
Net deferred tax liability	$	466.5		$	555.1

Deferred tax assets are included in the Consolidated Balance Sheets as "Other assets," "Non-current assets of discontinued operations" and "Deferred income taxes" at December 31, 2018 and 2017. The total deferred tax assets, valuation allowance and deferred tax liabilities of discontinued operations were $173 million, $75 million and $450 million, respectively, at December 31, 2018 and $296 million, $206 million and $487 million, respectively, at December 31, 2017.

The Company has provided foreign taxes on previously unremitted earnings of certain foreign subsidiaries from 2015 and for other foreign subsidiaries from 2016. At December 31, 2018, the Company had a deferred tax liability of $29.5 million relating to income and withholding taxes upon distribution of earnings from non-U.S. subsidiaries to certain foreign holding companies. No additional income taxes have been provided on approximately $490 million of remaining undistributed foreign earnings as these amounts continue to be indefinitely reinvested in foreign operations. Determining the amount of the unrecognized deferred tax liability related to any remaining undistributed foreign earnings is not practicable.

Valuation allowances reflect the Company's assessment that it is more likely than not that certain federal, state and foreign deferred tax assets, primarily net operating losses, will not be realized. The assessment of the need for a valuation allowance requires management to make estimates and assumptions about future earnings, reversal of existing temporary differences and available tax planning strategies. If actual experience differs from these estimates and assumptions, the recorded deferred tax asset may not be fully realized, resulting in an increase to income tax expense in the Company's results of operations. The valuation allowance for deferred tax assets was $475 million and $392 million at December 31, 2018 and 2017, respectively. During 2018, the valuation allowance increased by $83.5 million primarily due to foreign operating losses and the anticipated capital loss on the Sale of Arysta, offset by release of the U.S. valuation allowance following enactment of the TCJA.

At December 31, 2018, the Company had federal, state and foreign net operating loss carryforwards of approximately $230 million, $770 million and $562 million, respectively. The U.S. federal net operating loss carryforwards expire between the years 2023 and 2037. The majority of the state net operating loss carryforwards expire between the years 2019 and 2037. The foreign tax net

operating loss carryforwards expire between the years 2019 through 2037 or may be carried forward indefinitely. In addition, at December 31, 2018, the Company had approximately $32.9 million and $5.8 million of foreign tax credits and other tax credits, respectively, available for carryforward. These carryforward periods range from ten years to an unlimited period of time.

Section 382 of the Internal Revenue Code imposes an annual limitation on the amount of a corporation's U.S. federal taxable income that can be offset by net operating losses if it experiences an "ownership change." The Company experienced ownership changes in 2013 and 2015 with respect to the acquisition of various companies. Accordingly, the use of the Company's net operating losses generated prior to these ownership changes is subject to an annual limitation. If certain changes in the Company's ownership occur prospectively, there could be an additional annual limitation on the amount of utilizable carryforwards.



	Year Ended December 31,
($ amounts in millions)	2018			2017			2016
Unrecognized tax benefits at beginning of period	$	90.3		$	128.3		$	112.2
Additions based upon prior year tax positions (including acquired uncertain tax positions)	2.7			4.0			1.7
Additions based on current year tax positions	3.1			6.5			76.2
Reductions for prior period positions	(6.9		)	(38.0		)	(51.9		)
Reductions for settlements and payments	(4.3		)	(4.2		)	—
Reductions due to closed statutes	(3.5		)	(6.3		)	(9.9		)
Total unrecognized tax benefits at end of period	$	81.4		$	90.3		$	128.3

At December 31, 2018, the Company had $81.4 million of total unrecognized tax benefits, of which $80.6 million, if recognized, would impact the Company’s effective tax rate. Due to expected settlements, statute of limitations expirations and the sale of Arysta, the Company estimates that $10.9 million of the total unrecognized benefits will reverse within the next twelve months.

The Company recognizes interest and/or penalties related to income tax matters as part of income tax expense (benefit), which totaled $0.4 million, $1.2 million and $5.5 million, for 2018, 2017 and 2016, respectively. The Company's accrual for interest and penalties totaled $12.9 million and $13.0 million at December 31, 2018 and 2017, respectively.



Major Jurisdictions	Open Years
Belgium	2015	through current
Brazil	2014	through current
Canada	2014	through current
China	2015	through current
France	2015	through current
Germany	2013	through current
Japan	2013	through current
Mexico	2013	through current
Netherlands	2012	through current
South Africa	2013	through current
Taiwan	2013	through current
United Kingdom	2008 and 2015	through current
United States	2015	through current

The Company is subject to taxation in the United States and in various states and foreign jurisdictions. With few exceptions, at December 31, 2018, the Company was no longer subject to state and local or foreign examinations by tax authorities for years