Income Taxes (Tables)

12 Months Ended

Dec. 31, 2018

U.S. and outside U.S. components of income (loss) before income taxes were as follows:



	Year Ended December 31,
(In millions)	2018			2017		2016
United States	$	(197.0	)	$	284.3	$	154.3
Outside United States	$	(1,291.1	)	$	395.4	$	397.1
Income (loss) before income taxes	$	(1,488.1	)	$	679.7	$	551.4

The provision for income taxes consisted of:

Significant components of deferred tax assets and liabilities were as follows:



	December 31,
(In millions)	2018			2017
Deferred tax assets attributable to
Accrued expenses	$	128.0		$	155.2
Capital Loss	21.2			—
Non-deductible interest	89.3			85.9
Foreign tax credit carryforwards	105.9			34.9
Net operating loss carryforwards	382.8			390.7
Inventories	3.2			13.4
Research and development credit	6.5			7.5
Foreign exchange	32.5			—
Provisions for pensions and other long-term employee benefits	72.4			86.4
Contingencies related to contracts	83.7			111.3
Other contingencies	28.7			33.5
Fair value losses/gains	—			12.4
Margin recognition on construction contracts	34.4			—
Other	15.2			11.1
Deferred tax assets	1,003.8			942.3
Valuation allowance	(683.4		)	(430.0		)
Deferred tax assets, net of valuation allowance	320.4			512.3

Deferred tax liabilities attributable to
Revenue in excess of billings on contracts accounted for under the percentage of completion method	9.2			41.2
U.S. tax on foreign subsidiaries’ undistributed earnings not indefinitely reinvested	9.4			4.9
Foreign exchange	—			21.5
Property, plant and equipment, intangibles and other assets	278.6			403.3
Margin recognition on construction contracts	—			6.4
Deferred tax liabilities	297.2			477.3
Net deferred tax assets/(liabilities)	$	23.2		$	35.0

The following table presents a summary of changes in our unrecognized tax benefits:



(In millions)	Federal, State and Foreign Tax
Balance as of December 31, 2016	$	16.6
Reductions for tax positions related to prior years	(13.6		)
Additions for tax positions related to current year	39.5
Reductions for tax positions due to settlements	(0.2		)
Additions for tax positions related to purchase accounting	48.1
Balance as of December 31, 2017	$	90.4
Reductions for tax positions related to prior years	(11.5		)
Additions for tax positions related to current year	21.1
Reductions for tax positions due to settlements	(9.0		)
Balance as of December 31, 2018	$	91.0

The effective income tax rate was different from the statutory federal income tax rate due to the following:



	Year Ended December 31,
	2018		2017		2016
Statutory income tax rate	19.0	%	19.3	%	34.4	%
Net difference resulting from
Foreign earnings subject to different tax rates	(9.7	)%	18.2	%	(18.5	)%
Net change in unrecognized tax benefits	(0.7	)%	4.3	%	3.0	%
Adjustments on prior year taxes	(0.7	)%	(4.4	)%	2.4	%
Change in valuation allowance	(14.4	)%	19.3	%	13.1	%
Deferred tax asset/liability revaluation for tax rate change	(1.7	)%	1.4	%	(0.8	)%
U.S. transition tax	(0.8	)%	17.1	%	—	%
Impairments	(16.5	)%	—	%	—	%
Non-deductible legal provision	(3.8	)%	—	%	—	%
Other	0.9	%	5.1	%	(0.9	)%
Effective income tax rate	(28.4	)%	80.3	%	32.7	%