Income Taxes (Tables)

12 Months Ended

Dec. 31, 2018

Components of Earnings Before Income Tax Provision

The components of earnings before income tax provision were as follows:



	Year Ended December 31,
(In millions)	2018		2017		2016
Domestic	$	255.1	$	192.1	$	175.9
Foreign	202.7		201.2		212.0
Total	$	457.8	$	393.3	$	387.9

Components of Income Tax Provision (Benefit)

The components of our income tax provision (benefit) were as follows:



	Year Ended December 31,
(In millions)	2018			2017			2016
Current tax expense:
Federal	$	228.2		$	79.6		$	57.6
State and local	9.8			14.3			1.2
Foreign	59.8			106.0			67.3
Total current expense	$	297.8		$	199.9		$	126.1
Deferred tax expense (benefit):
Federal	$	56.8		$	130.1		$	(15.8	)
State and local	(21.2		)	5.3			3.6
Foreign	(25.9		)	(4.8		)	(18.3		)
Total deferred tax expense (benefit)	9.7			130.6			(30.5		)
Total income tax provision	$	307.5		$	330.5		$	95.6

Components of Deferred Tax Assets (Liabilities)

Deferred tax assets (liabilities) consist of the following:



	December 31,
(In millions)	2018			2017
Restructuring reserves	$	8.4		$	2.7
Accruals not yet deductible for tax purposes	9.1			10.7
Net operating loss carryforwards	265.5			199.4
Foreign, federal and state credits	10.4			69.2
Employee benefit items	77.0			69.6
Capitalized expenses	8.9			10.8
Derivatives and other	38.0			23.7
Sub-total deferred tax assets	417.3			386.1
Valuation allowance	(218.4		)	(189.2		)
Total deferred tax assets	$	198.9		$	196.9

Depreciation and amortization	$	(26.8	)	$	(13.9	)
Unremitted foreign earnings	—			(9.0		)
Intangible assets	(21.7		)	(26.3		)
Other	(0.4		)	—
Total deferred tax liabilities	(48.9		)	(49.2		)
Net deferred tax assets	$	150.0		$	147.7

Reconciliation of the Provision for Income Taxes

A reconciliation of the provision for income taxes, with the amount computed by applying the statutory federal income tax rate (21% in 2018 and 35% in 2016-2017) to income before provision for income taxes, is as follows (dollars in millions):



	Year Ended December 31,
	2018					2017					2016
Computed expected tax	$	96.1		21.0	%	$	137.7		35.0	%	$	135.9		35.0	%
State income taxes, net of federal tax benefit	8.4			1.8	%	7.6			1.9	%	4.8			1.2	%
Foreign earnings taxed at different rates	8.3			1.8	%	(22.3		)	(5.7	)%	(22.4		)	(5.8	)%
U.S. tax on foreign earnings	13.5			2.9	%	72.3			18.4	%	10.7			2.8	%
Tax credits	(20.7		)	(4.5	)%	(16.8		)	(4.3	)%	(31.5		)	(8.1	)%
Unremitted foreign earnings	—			—	%	—			—	%	(9.4		)	(2.4	)%
Reorganization and divestitures	—			—	%	75.9			19.3	%	—			—	%
Withholding tax	21.7			4.7	%	7.4			1.9	%	10.1			2.6	%
Net change in valuation allowance	(39.8		)	(8.7	)%	(2.0		)	(0.5	)%	(31.7		)	(8.2	)%
Net change in unrecognized tax benefits	95.0			20.8	%	33.4			8.5	%	16.0			4.1	%
Tax Cuts and Jobs Act	117.6			25.7	%	41.1			10.5	%	—			—	%
Deferred tax adjustments	—			—	%	14.1			3.6	%	31.0			8.0	%
Other	7.4			1.7	%	(17.9		)	(4.6	)%	(17.9		)	(4.6	)%
Income tax expense and rate	$	307.5		67.2	%	$	330.5		84.0	%	$	95.6		24.6	%

Unrecognized Tax Benefits and the Effect on Effective Income Tax Rate

We are providing the following disclosures related to our unrecognized tax benefits and the effect on our effective income tax rate if recognized:



	Year Ended December 31,
(in millions)	2018			2017			2016
Beginning balance of unrecognized tax benefits	$	214.3		$	162.6		$	131.3
Additions for tax positions of current year	106.0			7.3			11.1
Additions for tax positions of prior years	59.5			49.3			23.4
Reductions for tax positions of prior years	(7.0		)	(4.3		)	(1.4		)
Reductions for lapses of statutes of limitation and settlements	(16.4		)	(0.6		)	(1.8		)
Ending balance of unrecognized tax benefits	$	356.4		$	214.3		$	162.6