Income Taxes

3 Months Ended

Mar. 31, 2017

Income Tax Disclosure [Abstract]

Income Taxes

7. Income Taxes 

The following table presents components of income tax expense for the three months ended March 31, 2017 and 2016:

	Three months ended March 31,
(in thousands)	2017		2016
Income tax based on income from continuing operations, at estimated tax rates of 32.6% in 2017 and 39.7% in 2016	$5,719		$8,076
Income tax expense before discrete items	5,719		8,076
Discrete tax expense/(benefit):
Provision for/resolution of tax audits and contingencies, net	852		(825	)
Other discrete tax adjustments, net	-		(208	)
Enacted tax legislation	(21	)	-
Total income tax expense	$6,550		$7,043

The first quarter estimated income tax rate based on continuing operations was 32.6 percent in 2017, compared to 39.7 percent for the same period in 2016.

The Company records the residual U.S. and foreign taxes on certain amounts of foreign earnings that have been targeted for repatriation to the U.S. These amounts are not considered to be permanently reinvested, and the Company accrued for the tax cost on these earnings to the extent they cannot be repatriated in a tax-free manner. At March 31, 2017, the Company calculated a deferred tax liability of $4.8 million on $69.7 million of non-U.S. earnings that have been targeted for future repatriation to the U.S.

The Company conducts business globally and, as a result, files income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions. In the normal course of business the Company is subject to examination by taxing authorities throughout the world, including major jurisdictions such as United States, Brazil, Canada, France, Germany, Italy, Mexico and Switzerland. The open tax years range from 2007 to 2016. The Company is currently under audit in certain non-U.S. tax jurisdictions.

It is reasonably possible that over the next twelve months the amount of unrecognized tax benefits may change within a range of $0.0 million to a net decrease of $0.6 million, from the reevaluation of uncertain tax positions arising in examinations, in appeals, or in the courts, or from the closure of tax statutes.

In March 2016, an accounting update was issued which simplified several aspects related to accounting for share-based payment transactions, including the income tax consequences of these transactions. We adopted this update as of January 1, 2017. The income tax consequences which related to accounting for excess tax benefits have been adopted prospectively, resulting in recognition of excess tax benefits against income tax expenses rather than additional paid-in capital of less than $0.1 million for the three months ended March 31, 2017. No adjustment was necessary related to the deferred balances.