XML 26 R16.htm IDEA: XBRL DOCUMENT v3.21.2
Income Taxes
 6 Months Ended
Jun. 30, 2021
Income Tax Disclosure [Abstract]  
Income Taxes INCOME TAXES
Uncertain Tax Positions
As of June 30, 2021, the Company had $133 million of unrecognized tax benefits recorded in Other liabilities and an amount less than $1 million recorded to Other current liabilities. The balance includes $38 million associated with N&B uncertain tax positions recorded in the purchase accounting measurement period. If these unrecognized tax benefits were recognized, the effective tax rate would be affected.
As of June 30, 2021, the Company had accrued interest and penalties of $35 million classified in Other liabilities and an amount less than $1 million classified in Other current liabilities. The balance includes $19 million associated with N&B uncertain tax positions recorded in the purchase accounting measurement period.
As of June 30, 2021, the Company’s aggregate provisions for uncertain tax positions, including interest and penalties, was $169 million associated with tax positions asserted in various jurisdictions. The balance includes $57 million associated with N&B uncertain tax positions recorded in the purchase accounting measurement period.
The Company regularly repatriates earnings from non-U.S. subsidiaries. As the Company repatriates these funds to the U.S., they will be required to pay income taxes in certain U.S. states and applicable foreign withholding taxes during the period when such repatriation occurs. Accordingly, as of June 30, 2021, the Company had a deferred tax liability of $65 million for the effect of repatriating the funds to the U.S., attributable to various non-U.S. subsidiaries. There is no deferred tax liability associated with non-U.S. subsidiaries where we intend to indefinitely reinvest the earnings to fund local operations and/or capital projects.
The Company has ongoing income tax audits and legal proceedings which are at various stages of administrative or judicial review. In addition, the Company has open tax years with various taxing jurisdictions that range primarily from 2011 to 2020. Based on currently available information, the Company does not believe the outcome of any of these tax audits and other tax positions related to open tax years, when finalized, will have a material impact on its results of operations.
The Company also has other ongoing tax audits and legal proceedings that relate to indirect taxes, such as value-added taxes, sales and use taxes and property taxes, which are discussed in Note 15.
Effective Tax Rate
The effective tax rate for the three months ended June 30, 2021 was 31.8% compared to 15.4% for the three months ended June 30, 2020. The quarter-over-quarter increase was primarily due to an unfavorable mix of earnings, higher repatriation costs and a one-time non-cash impact due to the UK rate change enacted during the second quarter of 2021.
The effective tax rate for the six months ended June 30, 2021 was 0% compared to 16.3% for the six months ended June 30, 2020. The quarter-over-quarter decrease was primarily due to a favorable mix of earnings, partially offset by higher repatriation costs and a one-time non-cash impact due to the UK rate change enacted during the second quarter of 2021.