Income Taxes (Tables)

12 Months Ended

Dec. 31, 2019

Schedule of Components of Income Tax (Benefit)/Expense

The following tables present components of income tax expense/(benefit) and income before income taxes on continuing operations:

(in thousands)	2019	2018	2017
Income tax based on income from continuing operations, at estimated tax rates of 28%, 31%, and 32%, respectively	$49,977	$36,044	$17,519
Income tax before discrete items	49,977	36,044	17,519
Discrete tax expense/(benefit):
Net impact of mandatory deemed repatriation	—	(1,003)	5,758
Provision for/resolution of tax audits and contingencies, net	(2,874)	1,286	1,329
Adjustments to prior period tax liabilities	(1,637)	(1,284)	(840)
Provision for/adjustment to beginning of year valuation allowances	(525)	(4,882)	(3,522)
Enacted tax legislation	(112)	2,067	1,879
Total income tax expense	$44,829	$32,228	$22,123

(in thousands)	2019	2018	2017
Income/(loss) before income taxes:
U.S.	$76,024	$41,875	$(5,865)
Non-U.S.	102,188	73,372	60,573
	$178,212	$115,247	$54,708
Income tax provision
Current:
Federal	$780	$304	$1,551
State	6,357	4,996	1,770
Non-U.S.	25,255	21,557	19,282
	$32,392	$26,857	$22,603
Deferred:
Federal	$10,583	$10,700	$1,881
State	253	(338)	(1,237)
Non-U.S.	1,601	(4,991)	(1,124)
	$12,437	$5,371	$(480)
Total income tax expense	$44,829	$32,228	$22,123

Schedule of Income/(Loss) From Continuing Operations

The significant components of deferred income tax expense/(benefit) are as follows:

(in thousands)	2019	2018	2017
Net effect of temporary differences	$(18)	$(4,657)	$(5,774)
Foreign tax credits	12,530	9,437	8,340
Retirement benefits	(752)	2,360	(502)
Net impact to operating loss carryforwards	1,314	1,046	(900)
Enacted changes in tax laws and rates	(112)	2,067	1,878
Adjustment to beginning-of-the-year valuation allowance balance for changes in circumstances	(525)	(4,882)	(3,522)
Total	$12,437	$5,371	$(480)

Schedule of significant components of deferred income tax expense/(benefit)

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

	2019	2018	2017
U.S. federal statutory tax rate	21.0%	21.0%	35.0%
State taxes, net of federal benefit	3.0	2.9	0.4
Non-U.S. local income taxes	4.4	3.3	5.9
US permanent adjustments	—	(0.3)	0.5
Foreign permanent adjustments	0.4	(0.4)	0.4
Foreign rate differential	0.5	0.2	(10.5)
Net U.S. tax on non-U.S. earnings and foreign withholdings	0.3	5.7	11.9
Provision for/resolution of tax audits and contingencies, net	(1.6)	1.1	2.4
Research and development and other tax credits	(0.3)	(0.1)	(1.5)
Provision for/adjustment to beginning of year valuation allowances	(0.3)	(4.2)	(6.4)
Enacted tax legislation and rate change	(0.1)	1.8	3.0
Return to provision and other adjustments	(2.1)	(3.0)	(0.7)
Effective income tax rate	25.2%	28.0%	40.4%

Reconciliation of the U.S. Federal Statutory Tax Rate to the Company's Effective Income Tax Rate

	U.S.		Non-U.S.
(in thousands)	2019	2018	2019	2018
Noncurrent deferred tax assets:
Accounts receivable	$823	$686	$1,050	$1,224
Inventories	636	442	1,231	829
Deferred compensation	4,730	4,460	1,386	1,053
Depreciation and amortization	—	—	4,892	4,252
Postretirement benefits	14,885	14,759	1,048	1,667
Tax loss carryforwards	2,266	1,199	21,467	21,890
Tax credit carryforwards	15,931	30,523	936	1,197
Derivatives	1,411	—	—	—
Reserves	2,953	3,954	—	—
Deferred Revenue	2,417	3,556	—	—
Other	—	516	—	990
Noncurrent deferred tax assets before valuation allowance	46,052	60,095	32,010	33,102
Less: valuation allowance	—	—	(9,102)	(8,389)
Total noncurrent deferred tax assets	46,052	60,095	22,908	24,713
Total deferred tax assets	$46,052	$60,095	$22,908	$24,713
Noncurrent deferred tax liabilities:
Unrepatriated foreign earnings	$2,202	$4,028	$—	$—
Depreciation and amortization	4,404	12,848	—	—
Postretirement benefits	—	—	—	—
Deferred gain	3,391	3,762	—	—
Derivatives	—	1,162	—	—
Flow-through DTL's	6,205	2,192	—	—
Deferred Revenue	—	—	8,492	5,740
Other	510	—	3,137	—
Total noncurrent deferred tax liabilities	$16,712	$23,992	$11,629	$5,740
Net deferred tax liabilities	$16,712	$23,992	$11,629	$5,740
Net deferred tax asset	$29,340	$36,103	$11,279	$18,973

Schedule of Deferred Tax Assets and Liabilities

The following table provides a reconciliation of the beginning and ending amount of unrecognized tax benefits, $1.0 million of which, if recognized, would impact the effective tax rate:

(in thousands)	2019	2018	2017
Unrecognized tax benefits balance at January 1st	$3,790	$4,509	$4,183
Increase in gross amounts of tax positions related to prior years	4,874	2,008	480
Decrease in gross amounts of tax positions related to prior years	(2,239)	(358)	(50)
Increase in gross amounts of tax positions related to current years	—	—	—
Decrease due to settlements with tax authorities	—	(1,626)	(381)
Decrease due to lapse in statute of limitations	(626)	(479)	(29)
Currency translation	35	(264)	306
Unrecognized tax benefits balance at December 31	$5,834	$3,790	$4,509

Reconciliation of the Beginning and Ending Amount of Unrecognized Tax Benefits

As of December 31, 2019, and 2018, current income taxes prepaid and receivable consisted of the following:

(in thousands)	2019	2018
Prepaid taxes	$4,399	$4,859
Taxes receivable	1,763	2,614
Total current income taxes prepaid and receivable	$6,162	$7,473

Schedule of Current Income Taxes Prepaid and Deferred

Schedule of Non-Current Deferred Taxes and Other Liabilities

As of December 31, 2019, and 2018, noncurrent deferred taxes and other liabilities consisted of the following:

(in thousands)	2019	2018
Deferred income taxes	$11,002	$7,547
Other liabilities	1,224	875
Total noncurrent deferred taxes and other liabilities	$ 12,226	$ 8,422