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Income Taxes (as restated) | 12 Months Ended
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Dec. 31, 2020
Income Tax Disclosure [Abstract] |
Income Taxes (as restated) | INCOME TAXES (as restated) The effective tax rate for continuing operations was (28.6)%, (35.0)%, and (18.4)%, for the years ended December 31, 2020, 2019, and 2018, respectively. The effective rate in the each period was primarily influenced by the mix of income between our U.S. and non-U.S. operations, favorable tax rates and incentives in non-U.S. jurisdictions, taxes accrued on unremitted earnings, withholding taxes on cross-border payments, changes in valuation allowance for U.S. federal and state purposes, the GILTI provisions of the Tax Cuts and Jobs Act (“the Act”), the change in fair value of warrant liabilities, and additional reserves for uncertain tax positions. During the quarter ended December 31, 2018, we completed the accounting for the tax effects of the Act. As a result, we recorded a tax benefit of $14.1 for the year ended December 31, 2018 to adjust provisional amounts recorded as of December 31, 2017 related to the tax effects of the Act which are included as a component of income tax expense from continuing operations. The estimate included a one-time transition tax on the mandatory deemed repatriation of foreign earnings, and which was adjusted by $15.9 from $28.0 to $12.1. This adjustment was based on a decrease in cumulative foreign earnings from $180.4 to $78.2. In addition, the provisional amount related to the remeasurement of certain deferred tax assets and liabilities resulted in additional expense of $1.4 while the change in valuation allowance resulted in additional expense of $0.4. The global intangible low-taxed income ("GILTI") provisions of the Act 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 Company has made the policy election to record any liability associated with GILTI in the period in which it is incurred. Earnings (loss) before income taxes from continuing operations consists of the following:
| December 31 2020 (as restated) |  | December 31, 2019 |  | December 31, 2018
United States | $ | (373.2) |  |  | $ | (201.1) |  |  | $ | (351.4) |
Non-U.S. (1) | 118.6 |  |  | 96.8 |  |  | 80.4 |
Total loss before income taxes | $ | (254.6) |  |  | $ | (104.3) |  |  | $ | (271.0) |
(1)Certain of the Company's Non-U.S. entities generate significant losses for which a valuation allowance is provided for and accordingly do not create a tax benefit. The principal components of income tax expense (benefit) from continuing operations consists of the following:
| December 31, 2020 |  | December 31, 2019 |  | December 31, 2018
Current: |  |  |  |  |
Federal | $ | 0.1 |  |  | $ | — |  |  | $ | — |
State and local | 0.6 |  |  | (1.4) |  |  | 6.0 |
Non-U.S. | 73.4 |  |  | 51.0 |  |  | 83.8 |
Deferred: |  |  |  |  |
Federal | 2.3 |  |  | (0.4) |  |  | (8.4) |
State and local | 2.9 |  |  | (1.8) |  |  | (2.7) |
Non-U.S. | (6.6) |  |  | (10.9) |  |  | (28.8) |
Income tax expense (benefit) | $ | 72.7 |  |  | $ | 36.5 |  |  | $ | 49.9 |
Reconciliation of U.S. federal statutory taxes to the Company’s total income tax expense (benefit) from continuing operations consists of the following:
| December 31, 2020 (as restated) |  | December 31, 2019 |  | December 31, 2018
Taxes at U.S. statutory rate (21%) | $ | (53.5) |  |  | $ | (21.9) |  |  | $ | (56.9) |
State and local taxes, net of federal tax benefit | (4.9) |  |  | (4.0) |  |  | (6.0) |
Non-U.S. rate differential | 4.6 |  |  | 4.3 |  |  | 4.2 |
Non-U.S. tax holidays | (9.2) |  |  | (4.6) |  |  | (1.8) |
Uncertain tax positions | 16.4 |  |  | 16.0 |  |  | 21.5 |
Tax Cuts and Jobs Act of 2017 | — |  |  | — |  |  | (14.1) |
Global intangible low-tax income inclusion | 15.4 |  |  | 13.8 |  |  | 4.2 |
Change in valuation allowances | 82.1 |  |  | 17.0 |  |  | 104.7 |
Taxes on undistributed foreign earnings and withholding/ dividend taxes | 9.8 |  |  | 8.5 |  |  | (2.3) |
U.S. implications of non-U.S. earnings | (2.6) |  |  | (1.8) |  |  | 12.3 |
R&D deduction/ credit | (7.9) |  |  | (2.2) |  |  | (11.8) |
Non-taxable settlement of contingent consideration | — |  |  | — |  |  | (3.2) |
Change in fair value of warrant liabilities | 30.2 |  |  | — |  |  | — |
Other permanent differences | 4.9 |  |  | 6.7 |  |  | 10.5 |
Impact of rate changes in non-U.S. jurisdictions | (2.6) |  |  | 4.8 |  |  | (1.3) |
Outside basis difference on divestiture | — |  |  | — |  |  | (6.6) |
Impact of transaction costs | (4.8) |  |  | — |  |  | — |
Other (1) | (5.2) |  |  | (0.1) |  |  | (3.5) |
Total income tax expense (benefit) | $ | 72.7 |  |  | $ | 36.5 |  |  | $ | 49.9 |
(1)Represents several adjustments, none of which are significant for separate disclosure. The Company has tax holiday agreements in place in China, which are scheduled to expire between 2021 and 2022. It is the Company's intention to reapply for these holidays as they expire. We anticipate that we will continue to qualify for these holidays, but we will assess based on business conditions at the time of renewal. As of December 31, 2020 and December 31, 2019 the Company has recognized a $38.0 and $45.1 deferred income tax liability for non-U.S. income taxes and foreign withholding taxes on outside basis differences for certain foreign subsidiaries with earnings that are not indefinitely reinvested. Certain earnings of certain foreign affiliates continue to be indefinitely reinvested, but determining the impact was not practicable. The principal items that gave rise to deferred income tax assets and liabilities follow:
| December 31, 2020 |  | December 31, 2019 |  |
Deferred tax assets |  |  |  |  |
Net operating losses and capital losses | $ | 156.0 |  |  | $ | 131.7 |  |  |
Accrued liabilities | 44.9 |  |  | 30.0 |  |  |
Employee compensation and benefits | 10.1 |  |  | 13.7 |  |  |
Pensions | 14.8 |  |  | 13.3 |  |  |
Business interest deduction limitation | 80.7 |  |  | 98.9 |  |  |
Inventory | 21.8 |  |  | 20.4 |  |  |
R&D credit carryforward | 8.8 |  |  | 6.6 |  |  |
Lease liability | 13.7 |  |  | 19.8 |  |  |
Bad debts | 7.5 |  |  | 6.3 |  |  |
Foreign tax credit carryforward | 7.6 |  |  | — |  |  |
Other | 0.4 |  |  | 0.3 |  |  |
Total deferred tax assets, before valuation allowances | $ | 366.3 |  |  | $ | 341.0 |  |  |
Valuation allowances | $ | (274.7) |  |  | $ | (205.7) |  |  |
Deferred tax assets, net of valuation allowances | $ | 91.6 |  |  | $ | 135.3 |  |  |
Deferred tax liabilities |  |  |  |  |
Intangibles & Goodwill | (95.5) |  |  | (106.9) |  |  |
Undistributed foreign earnings | (38.0) |  |  | (45.1) |  |  |
Property, plant & equipment | (30.6) |  |  | (31.2) |  |  |
Debt issuance costs | (3.2) |  |  | (46.1) |  |  |
Lease Right of Use Asset | (12.1) |  |  | (18.8) |  |  |
Other | (7.8) |  |  | (2.9) |  |  |
Total deferred tax liabilities | $ | (187.2) |  |  | $ | (251.0) |  |  |
Net deferred income tax liabilities | $ | (95.6) |  |  | $ | (115.7) |  |  |
At December 31, 2020, the Company had federal net operating losses of $318.8, expiring at various times starting in 2036 with some losses having an unlimited carryforward period. At December 31, 2020, the gross amount of the Company’s state net operating losses was $594.9, expiring at various times between 2021 and 2040. At December 31, 2020, the Company had other federal tax credit carryforwards expiring between 2030 and 2040. The use of certain US tax attributes as of December 31, 2020 is subject to an annual limitation due to the change in ownership of our stock in February 2020 as described in Note 1. At this time, the tax attributes subject to the annual limitation have a valuation allowance recorded against them and therefore this annual limitation will not have a material impact on the Company. There can be no assurance that trading in our shares will not affect another change in ownership under the Internal Revenue Code which could impose an additional limit on the use of our tax attributes. At December 31, 2020, the Company’s foreign net operating losses that are available to offset future taxable income were $281.9. These foreign loss carryforwards will expire at various times beginning in 2021 with some losses having an unlimited carryforward period. At December 31, 2020, the Company’s foreign capital loss carryforwards were $71.2. The majority of foreign capital loss carryforwards will expire in 2024 with the remaining having an unlimited carryforward period. Pursuant to the terms of the separation, Emerson agreed to indemnify the Company for all U.S. federal, state or local income taxes, as well as non-U.S. income taxes, that are attributable to any period prior to the separation. An indemnification receivable of $15.7 has been recorded in noncurrent other assets for the uncertain tax positions related to periods prior to the separation. The impact on the Company’s tax expense for changes in uncertain tax positions for periods prior to the separation (discussed below) will be offset by the Emerson indemnification, resulting in no net effect on the Company’s net income. Following are changes in unrecognized tax benefits before considering recoverability of cross-jurisdictional tax credits (federal, state, and non-U.S.) and temporary differences. The amount of unrecognized tax benefits is not expected to significantly increase or decrease within the next 12 months.
| December 31, 2020 |  | December 31, 2019 |  | December 31, 2018
Beginning balance | $ | 52.6 |  |  | $ | 38.4 |  |  | $ | 22.0 |
Additions for the current year tax positions | 13.2 |  |  | 10.2 |  |  | 11.6 |
Additions for prior year tax positions | 8.1 |  |  | 5.5 |  |  | 9.6 |
Reductions for prior year tax positions | (1.5) |  |  | (1.0) |  |  | (4.8) |
Reductions for settlements with tax authorities | — |  |  | — |  |  | — |
Reductions for expirations of statute of limitations | (2.4) |  |  | (0.5) |  |  | — |
Ending balance | $ | 70.0 |  |  | $ | 52.6 |  |  | $ | 38.4 |
The total amount of net unrecognized tax benefits that would affect income tax expense, if recognized in the Consolidated Financial Statements, is $56.4. In addition, an adjustment of $15.7 would result to other expense for reversal of the indemnification receivable. The Company accrues interest and penalties related to income taxes in income tax expense. As of December 31, 2020, 2019, and 2018, total accrued interest and penalties were $12.4, $7.1, and $6.2, respectively. Eligible domestic subsidiaries file a consolidated U.S. Federal income tax return. Examinations by the U.S. Internal Revenue Service are complete through 2013. The status of state and non-U.S. tax examinations varies due to the numerous legal entities and jurisdictions in which the Company operates. As noted above, pursuant to the terms of the separation, Emerson will indemnify the Company for any tax assessments for periods prior to the separation.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI http://asc.fasb.org/extlink&oid=116825942&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI http://asc.fasb.org/extlink&oid=116825942&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 + Details
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