Income Taxes

6 Months Ended

Jun. 30, 2017

Income Tax Disclosure [Abstract]

Income Taxes

7. Income Taxes

The following table presents components of income tax expense for the three and six months ended June 30, 2017 and 2016:

	Three months ended June 30,				Six months ended June 30,
(in thousands)	2017		2016		2017		2016
Income tax based on income from continuing operations, at estimated tax rates of 32.8% in 2017 and 38.7% in 2016, respectively	$989		$6,258		$6,744		$14,131
Provision for change in estimated tax rate	36		(203	)	-		-
Income tax expense before discrete items	1,025		6,055		6,744		14,131
Discrete tax expense/(benefit):
Provision for/resolution of tax audits and contingencies, net	109		-		961		(825	)
Uncertain Tax Positions	490		-		490		-
Adjustments to prior period tax liabilities	189		-		189		(243	)
Other discrete tax adjustments, net	(34	)	27		(55	)	62
Total income tax expense	$1,779		$6,082		$8,329		$13,125

The second quarter estimated income tax rate based on continuing operations was 32.8 percent in 2017, compared to 38.7 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 June 30, 2017, the Company calculated a deferred tax liability of $4.5 million on $62.6 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, including but not limited to Canada and Italy.

It is reasonably possible that over the next twelve months the amount of unrecognized tax benefits may decrease up to $0.4 million from the reevaluation of uncertain tax positions arising in examinations, in appeals, or in the courts, or from the closure of tax statutes of limitations.

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. The Company adopted this update on 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 expense rather than additional paid-in capital of $0.6 million for the six months ended June 30, 2017. No adjustment was necessary related to the deferred tax balances.