Income Taxes (Tables)

12 Months Ended

Dec. 31, 2019

U.S. and foreign income before income taxes consist of the following (in millions):

The income tax provision (benefit) related to income before income taxes consists of the following components (in millions):



	2019			2018			2017
Current:
U.S. federal statutory tax	$	(4.0	)	$	8.2		$	94.6
State	1.6			(1.6		)	5.6
Foreign	35.9			46.3			34.2
	33.5			52.9			134.4
Deferred:
U.S. federal statutory tax	11.0			4.0			15.1
State	4.6			(6.2		)	8.9
Foreign	(12.2		)	(1.0		)	(10.0		)
	3.4			3.2			13.9
Non-current tax expense (income)	19.3			6.2			0.9
	$	56.2		$	55.9		$	149.2

A reconciliation of the U.S. federal statutory income tax rate to our effective income tax rate is as follows:



	2019		2018		2017
U.S. federal statutory tax rate	21.0	%	21.0	%	35.0	%
Foreign earnings, net of foreign taxes	(13.8	)	(11.6	)	245.4
State income taxes, net of U.S. federal income tax benefit	2.2		(3.3	)	(51.8	)
U.S. tax on deemed dividends	0.9		(0.4	)	(14.0	)
Tax Act - Transition Tax	0.5		0.7		(704.3	)
Tax Reform - GILTI	6.0		9.7		—
Tax Reform - BEAT	0.1		2.8		—
Deferred tax impact on foreign unrepatriated earnings	0.5		(1.0	)	(65.5	)
Goodwill impairment	—		—		(81.5	)
Uncertain tax positions	8.2		3.4		(4.1	)
Foreign currency adjustments	(6.1	)	2.2		(0.7	)
Intercompany interest transfer pricing adjustment	1.4		1.5		—
Tax authority settlements	—		—		(10.0	)
Nontaxable interest income	(2.3	)	(2.7	)	36.9
Nondeductible interest expense	1.8		—		(12.6	)
Valuation allowance	1.2		3.0		(19.6	)
Other permanent differences	2.4		5.0		(60.4	)
Effective income tax rate	23.7	%	30.2	%	(707.1	)%

The temporary differences which comprise our net deferred tax liabilities are as follows (in millions):



	As of December 31,
	2019			2018
Gross Deferred Tax Assets:
Bad debt reserve	$	4.2		$	4.7
Net operating loss	40.1			33.7
Accrued and other share-based compensation	27.1			23.2
Accrued expenses	6.0			10.2
U.S. foreign income tax credits	3.0			2.3
Other income tax credits	0.2			0.2
Customer deposits	3.1			3.1
Investments	1.9			1.9
Cash flow hedges	3.9			—
Other	0.7			—
Total gross deferred tax assets	90.1			79.4
Less: Valuation allowance	32.5			24.3
Gross deferred tax assets, net of valuation allowance	57.6			55.1
Deferred Tax Liabilities:
Depreciation	(11.7		)	(11.2		)
Goodwill and intangible assets	(53.5		)	(47.5		)
Unrealized foreign exchange	(6.3		)	(4.5		)
Prepaid expenses, deductible for tax purposes	(4.2		)	(3.9		)
Deferred tax costs on foreign unrepatriated earnings	(12.0		)	(11.3		)
Unrealized derivatives	(3.8		)	(4.1		)
Cash flow hedges	—			(2.5		)
Other	—			(3.5		)
Total gross deferred tax liabilities	(91.6		)	(88.5		)
Net deferred tax liability	$	34.0		$	33.4
Net deferred tax asset	—			—
Reported on the consolidated balance sheets as:
Identifiable intangible and other non-current assets for deferred tax assets, non-current	$	20.7		$	11.4

Non-current income tax liabilities, net of deferred tax liabilities, non-current	$	54.1		$	44.8

This deferred tax asset expires as follows (in millions):

The following is a tabular reconciliation of the total amounts of gross unrecognized income tax liabilities for the year (in millions):



	2019			2018			2017
Gross Unrecognized Tax Liabilities – opening balance	$	57.0		$	58.8		$	62.2
Gross increases – tax positions in prior period	12.2			3.6			10.9
Gross decreases – tax positions in prior period	(13.5		)	(10.6		)	—
Gross increases – tax positions in current period	14.9			11.5			10.7
Gross decreases – tax positions in current period	—			—			—
Settlements	(1.4		)	(1.5		)	(23.0		)
Lapse of statute of limitations	(2.7		)	(4.8		)	(2.1		)
Gross Unrecognized Tax Liabilities – ending balance	$	66.5		$	57.0		$	58.8

The following table summarizes these open tax years by jurisdiction with material uncertain tax positions:



	Open Tax Year
Jurisdiction	Examination in progress	Examination not yet initiated
Denmark	2013 - 2015	2016 - 2019
South Korea	2011 - 2014	2015 - 2019
United Kingdom	2017	2018 - 2019
Other non-U.S.	None	2014 - 2019