Income Taxes (Tables)

12 Months Ended

Dec. 31, 2017

Schedule of Income before Income Tax, Domestic and Foreign [Table Text Block]

Earnings before income taxes for the years ended December 31 were taxed within the following jurisdictions:



In millions	2017			2016		2015
United States ⁽¹⁾	$	(17.6	)	$	419.8	$	451.6
Non-U.S.	1,435.5			1,321.5		796.3
Total	$	1,417.9		$	1,741.3	$	1,247.9

Schedule of Components of Income Tax Expense (Benefit) [Table Text Block]

The components of the Provision for income taxes for the years ended December 31 were as follows:



In millions	2017			2016			2015
Current tax expense (benefit):
United States	$	102.2		$	179.6		$	300.1
Non-U.S.	95.4			135.7			132.9
Total:	197.6			315.3			433.0
Deferred tax expense (benefit):
United States	(234.7		)	(6.7		)	69.0
Non-U.S.	117.3			(27.1		)	38.8
Total:	(117.4		)	(33.8		)	107.8
Total tax expense (benefit):
United States	(132.5		)	172.9			369.1
Non-U.S.	212.7			108.6			171.7
Total	$	80.2		$	281.5		$	540.8

Schedule of Effective Income Tax Rate Reconciliation [Table Text Block]

The Provision for income taxes differs from the amount of income taxes determined by applying the applicable U.S. statutory income tax rate to pretax income, as a result of the following differences:



	Percent of pretax income
	2017		2016		2015
Statutory U.S. rate	35.0	%	35.0	%	35.0	%
Increase (decrease) in rates resulting from:
Non-U.S. tax rate differential ^(a)	(28.8	)	(14.7	)	(17.2	)
Tax on U.S. subsidiaries on non-U.S. earnings	0.8		0.9		1.3
State and local income taxes ^(b)	1.2		1.4		1.5
Valuation allowances ^(c)	2.8		0.1		1.7
Change in permanent reinvestment assertion ^{(d), (f)}	8.4		—		3.9
Transition tax ^(f)	11.3		—		—
Remeasurement of deferred tax balances ^(f)	(21.2	)	—		—
Stock based compensation	(1.7	)	—		—
Reserves for uncertain tax positions	(0.9	)	0.1		14.1
Hussmann gain ^(e)	—		(5.7	)	—
Provision to return and other true-up adjustments	(1.7	)	(0.6	)	0.7
Other adjustments	0.5		(0.3	)	2.3
Effective tax rate	5.7	%	16.2	%	43.3	%


(a)	Amount reported in 2017 includes the impact of a premium paid of approximately $520 million related to the early retirement of certain intercompany debt obligations


(b)	Net of changes in state valuation allowances


(c)	Primarily federal and non-U.S., excludes state valuation allowances


(d)	Net of foreign tax credits


(e)	Gain from sale of Hussmann equity investment

Schedule of Deferred Tax Assets and Liabilities [Table Text Block]

A summary of the deferred tax accounts at December 31 are as follows:



In millions	2017			2016
Deferred tax assets:
Inventory and accounts receivable	$	17.4		$	18.2
Fixed assets and intangibles	10.4			16.2
Postemployment and other benefit liabilities	396.5			652.5
Product liability	95.4			151.3
Other reserves and accruals	134.8			192.8
Net operating losses and credit carryforwards	589.0			528.5
Other	22.7			38.6
Gross deferred tax assets	1,266.2			1,598.1
Less: deferred tax valuation allowances	(344.6		)	(184.5		)
Deferred tax assets net of valuation allowances	$	921.6		$	1,413.6
Deferred tax liabilities:
Inventory and accounts receivable	$	(24.1	)	$	(38.8	)
Fixed assets and intangibles	(1,237.4		)	(1,949.7		)
Postemployment and other benefit liabilities	(9.6		)	(7.0		)
Other reserves and accruals	(1.5		)	(1.9		)
Product liability	(1.4		)	—
Undistributed earnings	(137.7		)	(24.0		)
Other	(11.1		)	(8.4		)
Gross deferred tax liabilities	(1,422.8		)	(2,029.8		)
Net deferred tax assets (liabilities)	$	(501.2	)	$	(616.2	)

Summary of Tax Credit Carryforwards [Table Text Block]

At December 31, 2017, the Company had the following operating loss and tax credit carryforwards available to offset taxable income in prior and future years:



In millions	Amount		Expiration Period
U.S. Federal net operating loss carryforwards	$	680.0	2018-2036
U.S. Federal credit carryforwards	121.5		2022-Unlimited
U.S. State net operating loss carryforwards	3,484.2		2018-2037
U.S. State credit carryforwards	34.7		2018-Unlimited
Non-U.S. net operating loss carryforwards	752.0		2018-Unlimited
Non-U.S. credit carryforwards	8.0		Unlimited

Summary of Valuation Allowance

Activity associated with the Company’s valuation allowance is as follows:



In millions	2017			2016			2015
Beginning balance	$	184.5		$	213.1		$	210.7
Increase to valuation allowance	176.5			19.4			40.7
Decrease to valuation allowance	(19.1		)	(43.5		)	(34.0		)
Accumulated other comprehensive income (loss)	2.7			(4.5		)	(4.3		)
Ending balance	$	344.6		$	184.5		$	213.1

Summary of Unrecognized Tax Benefits

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:



In millions	2017			2016			2015
Beginning balance	$	107.1		$	174.9		$	343.8
Additions based on tax positions related to the current year	6.2			5.9			8.7
Additions based on tax positions related to prior years	16.8			29.1			186.5
Reductions based on tax positions related to prior years	(8.6		)	(37.6		)	(102.2		)
Reductions related to settlements with tax authorities	(4.8		)	(60.9		)	(251.0		)
Reductions related to lapses of statute of limitations	(1.3		)	(2.8		)	(3.7		)
Translation (gain) loss	5.1			(1.5		)	(7.2		)
Ending balance	$	120.5		$	107.1		$	174.9