• | Adjusted earnings in line with guidance; excludes tax reform benefit of $44 million |
• | Q4 net income from continuing operations per diluted share was $0.54 and adjusted net income from continuing operations per diluted share was $0.25 |
• | Full year net income from continuing operations per diluted share was $0.52 and adjusted net income from continuing operations per diluted share was $0.80 |
• | Executing commercial agenda of strategic plan to Win in Private Label and Build and Buy Strong Brands |
• | Aggressive approach to Driving Operational Excellence through an enterprise-wide cost productivity plan targeting an incremental $150 million in annual run-rate savings by 2020; in advanced stages of design and initial execution across all areas of the company |
• | Improving capabilities through investments in people, technology and infrastructure |
• | Full year 2018 adjusted diluted earnings per share are expected to be $0.55 to $0.80 (1) |
• | Rescaling the supply chain involves consolidating and right-sizing its manufacturing capacity to better match volume as well as adjust for expected changes in 2018. The Company is taking a holistic approach to its supply chain network, evaluating opportunities across the country in both operations and logistics. The Company plans to consolidate its plant network while maintaining quality, value and service and expects to implement the changes in phases beginning in 2018 and with targeted completion in 2019. |
• | Optimizing spend management utilizing coordinated procurement efforts across the entire enterprise in all key categories. The Company plans to better leverage its size and scale for efficiencies across all facets of spend in addition to expanding its cost control efforts across all product and indirect spend categories. |
• | The Company is taking further steps to integrate its operating model to drive organizational effectiveness while also reducing its general and administrative costs across the enterprise. The Company plans to implement a flatter, leaner and more agile organizational structure to enhance decision making and help build functional competencies that will increase |
Financial Summary * | Three Months Ended December 31 | Twelve Months Ended December 31 | ||||||||||||||
(In millions, except per share amounts) | 2017 | 2016 | 2017 | 2016 | ||||||||||||
Gross Profit | ||||||||||||||||
GAAP | $ | 446 | $ | 501 | $ | 1,818 | $ | 1,988 | ||||||||
Adjusted | $ | 448 | $ | 497 | $ | 1,821 | $ | 1,985 | ||||||||
Operating Income | ||||||||||||||||
GAAP | $ | 33 | $ | 70 | $ | 83 | $ | 264 | ||||||||
Adjusted | $ | 51 | $ | 70 | $ | 178 | $ | 293 | ||||||||
Interest Expense | ||||||||||||||||
GAAP | $ | 15 | $ | 17 | $ | 65 | $ | 67 | ||||||||
Adjusted | $ | 15 | $ | 17 | $ | 64 | $ | 66 | ||||||||
Income from Continuing Operations | ||||||||||||||||
GAAP | $ | 50 | $ | 34 | $ | 47 | $ | 121 | ||||||||
Adjusted | $ | 23 | $ | 34 | $ | 73 | $ | 144 | ||||||||
Diluted Earnings Per Share (EPS) from Continuing Operations | ||||||||||||||||
GAAP | $ | 0.54 | $ | 0.37 | $ | 0.52 | $ | 1.32 | ||||||||
Adjusted | $ | 0.25 | $ | 0.38 | $ | 0.80 | $ | 1.57 | ||||||||
* Adjustments to GAAP due to the exclusion of expenses, gains or losses associated with certain transactions and other non-recurring items are described and reconciled to the comparable GAAP amounts in the attached tables. |
• | asset impairment charges; |
• | incremental non-cash trademark amortization triggered by the launch of a national fresh white milk brand; |
• | closed deal costs; |
• | facility closing, reorganization and realignment costs; |
• | debt issuance costs; |
• | costs associated with the early retirement of long-term debt; |
• | gains (losses) on the mark-to-market of our derivative contracts; |
• | costs associated with our enterprise-wide cost productivity plan; |
• | separation costs; |
• | gains or losses related to discontinued operations and divestitures; |
• | litigation settlements (including any related accretion); |
• | income tax impacts of the foregoing adjustments; |
• | one-time impacts of U.S. income tax reform; and |
• | adjustments to normalize our income tax expense at a rate of 38%. |
Three Months Ended December 31 | Twelve Months Ended December 31 | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Net sales | $ | 1,934,997 | $ | 2,018,009 | $ | 7,795,025 | $ | 7,710,226 | |||||||
Cost of sales | 1,488,565 | 1,516,589 | 5,977,348 | 5,722,710 | |||||||||||
Gross profit | 446,432 | 501,420 | 1,817,677 | 1,987,516 | |||||||||||
Operating costs and expenses: | |||||||||||||||
Selling and distribution | 330,925 | 342,835 | 1,346,948 | 1,348,349 | |||||||||||
General and administrative | 69,744 | 83,423 | 311,176 | 346,028 | |||||||||||
Amortization of intangibles | 5,168 | 5,156 | 20,710 | 20,752 | |||||||||||
Facility closing and reorganization costs, net | 1,966 | (344 | ) | 24,913 | 8,719 | ||||||||||
Impairment of long-lived assets | 5,698 | — | 30,668 | — | |||||||||||
Total operating costs and expenses | 413,501 | 431,070 | 1,734,415 | 1,723,848 | |||||||||||
Operating income | 32,931 | 70,350 | 83,262 | 263,668 | |||||||||||
Other (income) expense: | |||||||||||||||
Interest expense | 14,551 | 16,525 | 64,961 | 66,795 | |||||||||||
Other income, net | (519 | ) | (1,393 | ) | (2,942 | ) | (5,778 | ) | |||||||
Total other expense | 14,032 | 15,132 | 62,019 | 61,017 | |||||||||||
Income from continuing operations before income taxes | 18,899 | 55,218 | 21,243 | 202,651 | |||||||||||
Income tax expense (benefit) | (30,608 | ) | 21,699 | (26,179 | ) | 82,034 | |||||||||
Income from continuing operations | 49,507 | 33,519 | 47,422 | 120,617 | |||||||||||
Income (loss) from discontinued operations, net of tax | (64 | ) | (312 | ) | 11,291 | (312 | ) | ||||||||
Gain (loss) on sale of discontinued operations, net of tax | 2,875 | (376 | ) | 2,875 | (376 | ) | |||||||||
Net income | $ | 52,318 | $ | 32,831 | $ | 61,588 | $ | 119,929 | |||||||
Average common shares: | |||||||||||||||
Basic | 91,062 | 90,508 | 90,899 | 90,934 | |||||||||||
Diluted | 91,151 | 91,131 | 91,274 | 91,510 | |||||||||||
Basic income (loss) per common share: | |||||||||||||||
Income from continuing operations | $ | 0.54 | $ | 0.37 | $ | 0.52 | $ | 1.33 | |||||||
Income (loss) from discontinued operations | 0.03 | (0.01 | ) | 0.16 | (0.01 | ) | |||||||||
Net income | $ | 0.57 | $ | 0.36 | $ | 0.68 | $ | 1.32 | |||||||
Diluted income (loss) per common share: | |||||||||||||||
Income from continuing operations | $ | 0.54 | $ | 0.37 | $ | 0.52 | $ | 1.32 | |||||||
Income (loss) from discontinued operations | 0.03 | (0.01 | ) | 0.15 | (0.01 | ) | |||||||||
Net income | $ | 0.57 | $ | 0.36 | $ | 0.67 | $ | 1.31 |
December 31, 2017 | December 31, 2016 | |||||||
ASSETS | ||||||||
Cash and cash equivalents | $ | 16,512 | $ | 17,980 | ||||
Other current assets | 1,003,367 | 1,040,650 | ||||||
Total current assets | 1,019,879 | 1,058,630 | ||||||
Property, plant and equipment, net | 1,094,064 | 1,163,851 | ||||||
Intangibles and other assets, net | 389,886 | 383,746 | ||||||
Total | $ | 2,503,829 | $ | 2,606,227 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Total current liabilities, excluding debt | $ | 671,070 | $ | 706,981 | ||||
Total long-term debt, including current portion | 913,199 | 886,051 | ||||||
Other long-term liabilities | 263,613 | 402,639 | ||||||
Total stockholders' equity | 655,947 | 610,556 | ||||||
Total | $ | 2,503,829 | $ | 2,606,227 |
Twelve Months Ended December 31 | ||||||||
2017 | 2016 | |||||||
Operating Activities | ||||||||
Net cash provided by operating activities | $ | 144,799 | $ | 257,413 | ||||
Investing Activities | ||||||||
Payments for property, plant and equipment | (106,726 | ) | (144,642 | ) | ||||
Payments for acquisitions, net of cash acquired | (21,596 | ) | (158,203 | ) | ||||
Proceeds from sale of fixed assets | 4,336 | 14,705 | ||||||
Other | (11,000 | ) | — | |||||
Net cash used in investing activities | (134,986 | ) | (288,140 | ) | ||||
Financing Activities | ||||||||
Net proceeds from debt | 23,777 | 47,868 | ||||||
Payments of financing costs | (1,786 | ) | — | |||||
Repurchase of common stock | — | (25,000 | ) | |||||
Cash dividends paid | (32,737 | ) | (32,828 | ) | ||||
Issuance of common stock, net of share repurchases for withholding taxes | (535 | ) | (720 | ) | ||||
Other | — | 746 | ||||||
Net cash used in financing activities | (11,281 | ) | (9,934 | ) | ||||
Effect of exchange rate changes on cash and cash equivalents | — | (2,093 | ) | |||||
Change in cash and cash equivalents | (1,468 | ) | (42,754 | ) | ||||
Cash and cash equivalents, beginning of period | 17,980 | 60,734 | ||||||
Cash and cash equivalents, end of period | $ | 16,512 | $ | 17,980 |
Three Months Ended December 31, 2017 | |||||||||||||||||||||||||||||||||||
Asset write-downs and (gain) loss on sale of assets | Facility closing and reorganization costs, net | Mark-to-market on derivative contracts | Cost productivity plan | Other adjustments | Income tax | Tax reform | |||||||||||||||||||||||||||||
GAAP | (a) | (c) | (d) | (f) | (g) | (h) | (i) | Adjusted* | |||||||||||||||||||||||||||
Gross profit | $ | 446,432 | $ | — | $ | — | $ | 1,634 | $ | — | $ | — | $ | — | $ | — | $ | 448,066 | |||||||||||||||||
Selling and distribution | 330,925 | — | — | 622 | — | — | — | — | 331,547 | ||||||||||||||||||||||||||
General and administrative | 69,744 | — | — | — | (2,888 | ) | (2,205 | ) | — | — | 64,651 | ||||||||||||||||||||||||
Amortization of intangibles | 5,168 | (3,935 | ) | — | — | — | — | — | 1,233 | ||||||||||||||||||||||||||
General and administrative, including Amortization of intangibles | 74,912 | (3,935 | ) | — | — | (2,888 | ) | (2,205 | ) | — | — | 65,884 | |||||||||||||||||||||||
Total operating costs and expenses | 413,501 | (6,783 | ) | (1,966 | ) | 622 | (5,738 | ) | (2,205 | ) | — | — | 397,431 | ||||||||||||||||||||||
Operating income | 32,931 | 6,783 | 1,966 | 1,012 | 5,738 | 2,205 | — | — | 50,635 | ||||||||||||||||||||||||||
Income tax expense (benefit) | (30,608 | ) | — | — | — | — | — | 782 | 43,735 | 13,909 | |||||||||||||||||||||||||
Income from continuing operations | 49,507 | 6,783 | 1,966 | 1,012 | 5,738 | 2,205 | (782 | ) | (43,735 | ) | 22,694 | ||||||||||||||||||||||||
Diluted earnings per share from continuing operations | $ | 0.54 | $ | 0.07 | $ | 0.02 | $ | 0.01 | $ | 0.06 | $ | 0.03 | $ | — | $ | (0.48 | ) | $ | 0.25 | ||||||||||||||||
Three Months Ended December 31, 2016 | |||||||||||||||||||||||||||||||||||
Asset write-downs and (gain) loss on sale of assets | Closed deal costs | Facility closing and reorganization costs, net | Mark-to-market on derivative contracts | Other adjustments | Income tax | ||||||||||||||||||||||||||||||
GAAP | (a) | (b) | (c) | (d) | (g) | (h) | Adjusted* | ||||||||||||||||||||||||||||
Gross profit | $ | 501,420 | $ | — | $ | — | $ | — | $ | (3,938 | ) | $ | — | $ | — | $ | 497,482 | ||||||||||||||||||
Selling and distribution | 342,835 | — | — | — | 1,620 | — | — | 344,455 | |||||||||||||||||||||||||||
General and administrative | 83,423 | — | (493 | ) | — | — | (1,436 | ) | — | 81,494 | |||||||||||||||||||||||||
Amortization of intangibles | 5,156 | (3,935 | ) | — | — | — | — | — | 1,221 | ||||||||||||||||||||||||||
General and administrative, including Amortization of intangibles | 88,579 | (3,935 | ) | (493 | ) | — | — | (1,436 | ) | — | 82,715 | ||||||||||||||||||||||||
Total operating costs and expenses | 431,070 | (3,935 | ) | (493 | ) | 344 | 1,620 | (1,436 | ) | — | 427,170 | ||||||||||||||||||||||||
Operating income | 70,350 | 3,935 | 493 | (344 | ) | (5,558 | ) | 1,436 | — | 70,312 | |||||||||||||||||||||||||
Income from continuing operations | 33,519 | 3,935 | 493 | (344 | ) | (5,558 | ) | 1,436 | 731 | 34,212 | |||||||||||||||||||||||||
Diluted earnings per share from continuing operations | $ | 0.37 | $ | 0.04 | $ | 0.01 | $ | — | $ | (0.06 | ) | $ | 0.01 | $ | 0.01 | $ | 0.38 |
Twelve Months Ended December 31, 2017 | |||||||||||||||||||||||||||||||||||||||
Asset write-downs and (gain) loss on sale of assets | Closed deal costs | Facility closing and reorganization costs, net | Mark-to-market on derivative contracts | Cost productivity plan | Other adjustments | Income tax | Tax reform | ||||||||||||||||||||||||||||||||
GAAP | (a) | (b) | (c) | (d) | (f) | (g) | (h) | (i) | Adjusted* | ||||||||||||||||||||||||||||||
Gross profit | $ | 1,817,677 | $ | — | $ | — | $ | — | $ | 3,436 | $ | — | $ | — | $ | — | $ | — | $ | 1,821,113 | |||||||||||||||||||
Selling and distribution | 1,346,948 | — | — | — | 620 | — | — | — | — | 1,347,568 | |||||||||||||||||||||||||||||
General and administrative | 311,176 | — | (372 | ) | — | — | (2,888 | ) | (17,460 | ) | — | — | 290,456 | ||||||||||||||||||||||||||
Amortization of intangibles | 20,710 | (15,740 | ) | — | — | — | — | — | — | — | 4,970 | ||||||||||||||||||||||||||||
General and administrative, including Amortization of intangibles | 331,886 | (15,740 | ) | (372 | ) | — | — | (2,888 | ) | (17,460 | ) | — | — | 295,426 | |||||||||||||||||||||||||
Total operating costs and expense | 1,734,415 | (43,558 | ) | (372 | ) | (24,913 | ) | 620 | (5,738 | ) | (17,460 | ) | — | — | 1,642,994 | ||||||||||||||||||||||||
Operating income | 83,262 | 43,558 | 372 | 24,913 | 2,816 | 5,738 | 17,460 | — | — | 178,119 | |||||||||||||||||||||||||||||
Interest expense | 64,961 | — | — | — | — | — | (1,080 | ) | — | — | 63,881 | ||||||||||||||||||||||||||||
Income tax expense (benefit) | (26,179 | ) | — | — | — | — | — | — | 26,972 | 43,735 | 44,528 | ||||||||||||||||||||||||||||
Income from continuing operations | 47,422 | 43,558 | 372 | 24,913 | 2,816 | 5,738 | 18,540 | (26,972 | ) | (43,735 | ) | 72,652 | |||||||||||||||||||||||||||
Diluted earnings per share from continuing operations | $ | 0.52 | $ | 0.48 | $ | 0.01 | $ | 0.27 | $ | 0.03 | $ | 0.06 | $ | 0.21 | $ | (0.30 | ) | $ | (0.48 | ) | $ | 0.80 | |||||||||||||||||
Twelve Months Ended December 31, 2016 | |||||||||||||||||||||||||||||||||||||||
Asset write-downs and (gain) loss on sale of assets | Closed deal costs | Facility closing and reorganization costs, net | Mark-to-market on derivative contracts | Other adjustments | Income tax | ||||||||||||||||||||||||||||||||||
GAAP | (a) | (b) | (c) | (d) | (g) | (h) | Adjusted* | ||||||||||||||||||||||||||||||||
Gross profit | $ | 1,987,516 | $ | — | $ | — | $ | — | $ | (2,143 | ) | $ | — | $ | — | $ | 1,985,373 | ||||||||||||||||||||||
Selling and distribution | 1,348,349 | — | — | — | 10,655 | — | — | 1,359,004 | |||||||||||||||||||||||||||||||
General and administrative | 346,028 | — | (4,926 | ) | — | — | (11,561 | ) | — | 329,541 | |||||||||||||||||||||||||||||
Amortization of intangibles | 20,752 | (16,843 | ) | — | — | — | — | — | 3,909 | ||||||||||||||||||||||||||||||
General and administrative, including Amortization of intangibles | 366,780 | (16,843 | ) | (4,926 | ) | — | — | (11,561 | ) | — | 333,450 | ||||||||||||||||||||||||||||
Total operating costs and expenses | 1,723,848 | (16,843 | ) | (4,926 | ) | (8,719 | ) | 10,655 | (11,561 | ) | — | 1,692,454 | |||||||||||||||||||||||||||
Operating income | 263,668 | 16,843 | 4,926 | 8,719 | (12,798 | ) | 11,561 | — | 292,919 | ||||||||||||||||||||||||||||||
Interest expense | 66,795 | — | — | — | — | (436 | ) | — | 66,359 | ||||||||||||||||||||||||||||||
Income from continuing operations | 120,617 | 16,843 | 4,926 | 8,719 | (12,798 | ) | 11,997 | (6,256 | ) | 144,048 | |||||||||||||||||||||||||||||
Diluted earnings per share from continuing operations | $ | 1.32 | $ | 0.18 | $ | 0.05 | $ | 0.10 | $ | (0.14 | ) | $ | 0.13 | $ | (0.07 | ) | $ | 1.57 |
Three Months Ended December 31 | Twelve Months Ended December 31 | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
Reconciliation of Net Income to Adjusted EBITDA and Bank EBITDA | ||||||||||||||||
Net income | $ | 52,318 | $ | 32,831 | $ | 61,588 | $ | 119,929 | ||||||||
Interest expense | 14,551 | 16,525 | 64,961 | 66,795 | ||||||||||||
Income tax expense (benefit) | (30,608 | ) | 21,699 | (26,179 | ) | 82,034 | ||||||||||
Depreciation and amortization | 40,091 | 44,182 | 165,812 | 172,617 | ||||||||||||
Asset write-downs and loss on sale of assets (a) | 2,848 | — | 27,818 | — | ||||||||||||
Closed deal costs (b) | — | 493 | 372 | 4,926 | ||||||||||||
Facility closing and reorganization costs, net (c) | 1,966 | (344 | ) | 24,913 | 8,719 | |||||||||||
Mark-to-market on derivative contracts (d) | 1,012 | (5,558 | ) | 2,816 | (12,798 | ) | ||||||||||
Discontinued operations (e) | (2,811 | ) | 688 | (14,166 | ) | 688 | ||||||||||
Cost productivity plan (f) | 5,738 | — | 5,738 | — | ||||||||||||
Other adjustments (g) | 2,205 | 1,436 | 17,460 | 11,561 | ||||||||||||
Adjusted EBITDA | $ | 87,310 | $ | 111,952 | $ | 331,133 | $ | 454,471 | ||||||||
Non-cash share-based compensation expense | 5,416 | |||||||||||||||
Bank EBITDA | $ | 336,549 | ||||||||||||||
December 31, 2017 | ||||||||||||||||
Reconciliation of net debt and total leverage ratio | ||||||||||||||||
Total long-term debt, including current portion | $ | 913,199 | ||||||||||||||
Unamortized debt issuance costs | 5,672 | |||||||||||||||
Cash and cash equivalents | (16,512 | ) | ||||||||||||||
Net debt | $ | 902,359 | ||||||||||||||
Bank EBITDA | 336,549 | |||||||||||||||
Total leverage ratio | 2.68 | |||||||||||||||
Twelve Months Ended December 31 | ||||||||||||||||
2017 | 2016 | |||||||||||||||
Reconciliation of Free Cash Flow provided by continuing operations | ||||||||||||||||
Net cash provided by operating activities | $ | 144,799 | $ | 257,413 | ||||||||||||
Payments for property, plant and equipment | (106,726 | ) | (144,642 | ) | ||||||||||||
Free Cash Flow provided by continuing operations | $ | 38,073 | $ | 112,771 |
(a) | The adjustment reflects the elimination of the following: |
i. | In conjunction with our decision to launch DairyPure® in the first quarter of 2015, we reclassified certain of our indefinite-lived trademarks to finite-lived, resulting in a triggering event for impairment testing purposes. The related adjustment reflects the elimination of amortization expense recorded on these finite-lived trademarks of $3.9 million for each of the three months ended December 31, 2017 and 2016, and $15.7 million and $16.8 million for the twelve months ended December 31, 2017 and 2016, respectively; and |
ii. | Asset impairment charges on certain fixed assets of $2.8 million for the three months ended December 31, 2017 and $27.8 million for the twelve months ended December 31, 2017. We evaluate our long-lived assets for impairment when circumstances indicate that the carrying value of an asset group may not be recoverable. Indicators of impairment could include, among other factors, significant changes in the business environment, the planned closure of a facility or a decline in operating cash flows of an asset group. |
(b) | The adjustment reflects the elimination of expenses related to completed acquisitions and other transactional activities of $0.5 million for the three months ended December 31, 2016, and $0.4 million and $4.9 million for the twelve months ended December 31, 2017 and 2016, respectively. |
(c) | The adjustment reflects the elimination of severance charges and non-cash asset impairments, net of (gains) losses on related asset sales, for approved facility closings and restructuring plans. |
(d) | The adjustment reflects the elimination of the (gain) loss on the mark-to-market of our commodity derivative contracts. All of our commodity derivative contracts are marked to market in our statement of operations during each reporting period with a corresponding derivative asset or liability on our balance sheet. |
(e) | The adjustment reflects the elimination of the following: |
i. | Net income from discontinued operations of $11.3 million recognized in the twelve months ended December 31, 2017 due to the lapse of a statute of limitation related to an unrecognized tax benefit previously established as a direct result of the spin-off of the WhiteWave Foods Company, which was completed on May 23, 2013; |
ii. | Net gains from discontinued operations of $2.9 million recognized in each of the three and twelve months ended December 31, 2017 due to the lapse of a statute of limitation related to an unrecognized tax benefit previously established as a direct result of the sale of our Morningstar division, which was completed on January 3, 2013; and |
iii. | A loss of $0.7 million in each of the three and twelve months ended December 31, 2016 associated with prior discontinued operations. |
(f) | The adjustment reflects the elimination of a non-cash asset write-down and certain other direct expenses incurred as a result of our enterprise-wide cost productivity plan. These charges were $5.7 million for each of the three and twelve months ended December 31, 2017. |
(g) | The adjustment reflects the elimination of the following: |
i. | A charge related to litigation settlements reached in the twelve months ended December 31, 2017; |
ii. | The write off of unamortized deferred financing costs of $1.1 million in connection with the January 4, 2017 amendments to our senior secured revolving credit facility and receivables securitization facility in the twelve months ended December 31, 2017; |
iii. | Separation charges related to the previously disclosed departures of certain executive officers of $1.4 million and $11.6 million for the three and twelve months ended December 31, 2016, respectively, and $2.1 million and $3.1 million for the three and twelve months ended December 31, 2017, respectively; and |
iv. | Interest accretion in connection with the settlement of a previously disclosed dairy farmer class action lawsuit filed in the United States District Court for the Eastern District of Tennessee. The Court granted final approval of the settlement agreement on June 15, 2012 and the final installment payment was made in June of 2016; |
(h) | The adjustment reflects the income tax impact of adjustments (a) through (g) and an adjustment to our income tax expense to reflect income tax at a tax rate of 38%, which we believe represents our normalized effective tax rate as a U.S. domiciled business for the periods presented. |
(i) | The adjustment reflects the elimination of one-time effects to income tax expense associated with the December 22, 2017 enactment of the Tax Cuts and Jobs Act (the "Tax Act”). For the Company, significant provisions of the Tax Act include a reduction in the corporate income tax rate from 35% to 21% beginning in 2018 and a mandatory one-time transition tax on unrepatriated foreign earnings. The reduction in the corporate income tax rate triggered an immediate revaluation of our deferred tax assets and liabilities, which resulted in a $45.8 million one-time income tax benefit. This benefit was partly offset by the recognition of a $2.1 million income tax expense associated with the mandatory transition tax on our accumulated foreign earnings. The resulting net income tax benefit of $43.7 million was recorded in the three months ended December 31, 2017. |