Current income tax expense represents the amounts expected to be reported on the Company's income tax returns, and deferred income tax expense or benefit represents the change in net deferred tax assets and liabilities. Deferred tax assets and liabilities are determined based on the difference between the financial statement and tax bases of assets and liabilities as measured by the enacted income tax rates that will be in effect when these differences reverse. Valuation allowances are recorded as appropriate to reduce deferred tax assets to the amount considered likely to be realized.

On December 22, 2017, the Tax Act was signed into law. The Tax Act significantly changed U.S. tax law by, among other things, lowering corporate income tax rates, implementing a territorial tax system and imposing a repatriation tax on deemed repatriated earnings of foreign subsidiaries. The Tax Act permanently reduced the U.S. Corporate income tax rate from a maximum of 35% to a 21% rate, effective January 1, 2018.

The Tax Act provides for a one-time deemed mandatory repatriation of post-1986 undistributed foreign subsidiary Earnings and Profits ("E&P") through 2017. Based on the analysis of E&P, no income tax expense was recorded in the Company's Consolidated Statement of Operations for 2018 or 2017.

While the Tax Act provides for a territorial system, beginning in 2018, it includes the global intangible low-taxed income ("GILTI") provision. The Company elected to account for GILTI tax in the period in which it is incurred. The GILTI provisions require the Company to include in its U.S. income tax return foreign subsidiary earnings in excess of an allowable return on the foreign subsidiary's tangible assets. The GILTI tax expense is primarily caused by a U.S. foreign tax credit limitation which requires an allocation of expenses to the GILTI income, which limits the ability to benefit from foreign tax credits. As a result of the GILTI provisions, the Company's effective tax rate increased by 0.25% for 2018.

On December 22, 2017, the SEC staff issued Staff Accounting Bulletin No. 118 ("SAB 118") to address the application of U.S. GAAP in situations when a registrant did not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the Tax Act. The Company recognized a provisional $48.7 million income tax charge related to the revaluation of deferred tax assets and liabilities in its consolidated financial statements for the year ended December 31, 2017. Adjustments made to the provisional amounts allowed under SAB 118 were identified and recorded as discrete adjustments as described in the following paragraph.

December 31, 2017. These adjustments resulted from changes in its revaluation of deferred tax assets and liabilities due to additional analysis, changes in interpretations and assumptions the Company made, and additional regulatory guidance that was issued. The accounting for the Tax Act was completed in the fourth quarter of 2018.



(In thousands)	2018			2017		2016
Income tax expense (benefit):
Currently payable:
U.S. federal	$	281		$	4,107	$	(4,088	)
U.S. state	1,127			372		365
International	18,014			21,975		18,014
Total income taxes currently payable	19,422			26,454		14,291
Deferred U.S. federal	7,164			46,470		(8,195		)
Deferred U.S. state	(11,045		)	1,142		2,238
Deferred international	(2,642		)	9,737		(1,697		)
Total income tax expense	$	12,899		$	83,803	$	6,637



(In thousands)	2018			2017			2016
U.S. federal income tax expense (benefit)	$	33,023		$	33,408		$	(27,815	)
U.S. state income taxes, net of federal income tax benefit	1,614			786			(355		)
U.S. domestic deductions and credits	(6,145		)	(1,210		)	(661		)
Capital loss on sale of equity interest in Brand with no realizable tax benefit	—			—			16,106
Difference in effective tax rates on international earnings and remittances	5,399			675			2,006
Uncertain tax position contingencies and settlements	(1,180		)	(1,517		)	(1,886		)
Changes in realization on beginning of the year deferred tax assets	(6,937		)	2,758			1,978
Forward Loss Provisions in SBB Contract with no realizable tax benefits	—			—			15,768
Global Intangible Low-Taxed Income	400			—			—
U.S. non-deductible expenses	2,277			664			724
Income related to the Infrastructure Transaction	—			—			(644		)
Impact of U.S. tax reform	(15,409		)	48,680			—
Cumulative effect of change in statutory tax rates/laws	—			(153		)	(388		)
Income from unconsolidated entities	—			—			2,098
Other, net	(143		)	(288		)	(294		)
Total income tax expense	$	12,899		$	83,803		$	6,637

$88.1 million and $89.8 million for 2018 and 2017, respectively. In 2017, because of the reduction in the U.S. corporate income tax rate from 35% to 21% under the Tax Act, the Company revalued its ending net deferred tax asset related to the outside basis difference in its international branches and recognized a provisional $6.5 million income tax expense in the Company’s Consolidated Statement of Operations for 2017. The decreased international income from continuing operations, the

$8.3 million income tax benefit recorded in the second quarter of 2018 arising from the adjustment to certain existing deferred tax asset valuation allowances as the result of the Altek acquisition, and the provisional income tax expense because of the Tax Act not recurring in 2018 decreased the Company's total international income tax expense to $15.4 million in 2018 from

$5.4 million and $0.7 million, respectively, which included U.S income tax expense on international deemed remittances of $3.1 million and $6.4 million, respectively. This increase is primarily due to the reduction of U.S. Corporate income tax rate from a maximum 35% to a 21% rate.

$69.1 million and $5.7 million for 2018 and 2017, respectively. In 2017, due to the impact of the Tax Act, the Company recognized a $14.9 million provisional income tax expense because of revaluing the U.S. ending net deferred tax assets from 35% to the newly enacted U.S. corporate income tax rate of 21% and established a provisional valuation allowance on the full

amount of foreign tax credit carryforward of $27.3 million due to the impact the Tax Act had on future foreign source income. In 2018, the Company finalized the impact of the Tax Act and recognized a $15.4 million income tax benefit because of the change in expected realization of foreign tax credit and state net operating loss carryforwards. The Company's total U.S. income tax expense decreased from $52.1 million in 2017 to a $2.5 million income tax benefit in 2018 due primarily to the impact of the Tax Act, including the lower tax rate.



	2018					2017
(In thousands)	Asset			Liability		Asset			Liability
Depreciation and amortization	$	—		$	8,681	$	6,616		$	—
Expense accruals	18,827			—		17,690			—
Inventories	3,071			—		4,390			—
Provision for receivables	690			—		649			—
Deferred revenue	—			3,122		—			979
Operating loss carryforwards	83,168			—		90,193			—
Foreign tax credit carryforwards	25,814			—		27,256			—
Capital loss carryforwards	9,759			—		11,011			—
Pensions	40,442			—		47,153			—
Currency adjustments	3,795			—		7,160			—
Deferred financing costs	—			2,227		—			2,135
Post-retirement benefits	471			—		403			—
Stock based compensation	5,832			—		4,761			—
Other	5,886			—		7,684			—
Subtotal	197,755			14,030		224,966			3,114
Valuation allowance	(138,862		)	—		(174,227		)	—
Total deferred income taxes	$	58,893		$	14,030	$	50,739		$	3,114

At December 31, 2018, the tax-effected amount of net operating loss carryforwards ("NOLs") totaled $83.2 million . Tax-effected NOLs from international operations are $68.1 million. Of that amount, $56.6 million can be carried forward indefinitely and $11.5 million will expire at various times between 2019 and 2039. Tax-effected U.S. state NOLs are $15.1 million. Of that amount, $4.3 million expire at various times between 2019 and 2023, $2.9 million expire at various times between 2024 and 2028, $3.4 million expire at various times between 2029 and 2033 and $4.5 million expire at various times between 2034 and 2038. At December 31, 2018, the tax-effected amount of capital loss carryforwards totaled

Valuation allowances of $138.9 million and $174.2 million at December 31, 2018 and 2017, respectively, related principally to deferred tax assets for pension liabilities, NOLs, foreign tax credit carryforwards, capital loss carryforwards and foreign currency translation that are uncertain as to realizability. In 2018, the Company finalized the impact of the Tax Act and reduced the provisional valuation allowance by $15.2 million because of the expected realization of foreign tax credit and state net operating loss carryforward. In addition, the U.K. valuation allowance was reduced by $13.6 million as a result of the Altek acquisition and a change in estimate of interest deductions. The Company recorded a valuation allowance reduction of

$8.7 million from the effects of foreign currency translation adjustments, partially offset by the net increase related to losses in certain jurisdictions where the Company determined that it is more likely than not that these assets will not be realized. In 2017, the Company recorded a valuation allowance of $27.3 million related to foreign tax credit carryforwards due to the impact of the Tax Act, an increase from foreign currency translation in the amount of $10.1 million and a net increase of $6.9 million related to losses in certain jurisdictions where the Company determined that it is more likely than not that these assets will not be realized. This was partially offset by a reduction related to current year pension adjustments recorded through Accumulated other comprehensive loss and a decrease related to U.S., Argentina and Belgium tax rate changes.

The Tax Act introduced a transition tax and a territorial tax system, which was effective beginning in 2018. The territorial tax system impacts the Company's overall global capital and legal entity structure, working capital, and repatriation plan on a go-forward basis. Based on the Company's analysis of the territorial tax system and other new international tax provisions, the Company continues to support the assertion to indefinitely reinvest $677 million of accumulated foreign earnings and profits in non-U.S. jurisdictions. Included in this amount is $628 million of deferred foreign income from foreign entities' deficit earnings and profits as of December 31, 2017 that remain untaxed as a result of the Tax Act and $49 million of untaxed earnings and profits generated during 2018. In addition, the Company recognized $4 million of GILTI included in the Tax Act which increases earnings previously taxed in the U.S. Further, it is impracticable for the Company to estimate any future tax costs for any unrecognized deferred tax liabilities associated with its indefinite reinvestment assertion, because the actual tax liability, if any, would be dependent on complex analysis and calculations considering various tax laws, exchange rates, circumstances existing when a repatriation, sale, or liquidation occurs, or other factors.

The Company recognizes accrued interest and penalty expense related to unrecognized income tax benefits in income tax expense. During 2018 and 2016, the Company recognized an income tax benefit of $0.2 million and $1.7 million, respectively, for interest and penalties primarily due to the expiration of statutes of limitation and resolution of examinations. The Company did not recognize any income tax expense or benefit for interest and penalties during 2017. The Company has accrued $0.9 million, $1.1 million and $1.1 million for the payment of interest and penalties at December 31, 2018, 2017 and 2016 respectively.



(In thousands)	Unrecognized Income Tax Benefits			Deferred Income Tax Benefits			Unrecognized Income Tax Benefits, Net of Deferred Income Tax Benefits
Balances, January 1, 2016	$	5,161		$	(44	)	$	5,117
Additions for tax positions related to the current year (includes currency translation adjustment)	744			(1		)	743
Additions for tax positions related to prior years (includes currency translation adjustment)	358			(14		)	344
Other reductions for tax positions related to prior years	(837		)	—			(837		)
Statutes of limitation expirations	(817		)	27			(790		)
Settlements	(27		)	2			(25		)
Balance at December 31, 2016	4,582			(30		)	4,552
Additions for tax positions related to the current year (includes currency translation adjustment)	658			(2		)	656
Other reductions for tax positions related to prior years	(321		)	—			(321		)
Statutes of limitation expirations	(1,296		)	1			(1,295		)
Balance at December 31, 2017	3,623			(31		)	3,592
Additions for tax positions related to the current year (includes currency translation adjustment)	196			(1		)	195
Statutes of limitation expirations	(1,397		)	6			(1,391		)
Total unrecognized income tax benefits that, if recognized, would impact the effective income tax rate at December 31, 2018	$	2,422		$	(26	)	$	2,396