XML 37 R17.htm IDEA: XBRL DOCUMENT
v3.25.0.1

Income Taxes (Notes) | 12 Months Ended
--- | ---
Dec. 31, 2023
Income Tax Disclosure [Abstract] |
Income Taxes | INCOME TAXES The following table displays information regarding income tax expense (benefit) from continuing operations.
For the Year Ended December 31 | 2024 |  | 2023 |  | 2022
Income (loss) components: |  |  |  |  |
United States | $ | 264.2 |  |  | $ | 164.6 |  |  | $ | 155.7 |
International | 383.4 |  |  | 354.9 |  |  | 306.1 |
Income from continuing operations before income tax | 647.6 |  |  | 519.5 |  |  | 461.8 |
Income tax expense (benefit) components: |  |  |  |  |
Current income tax expense (benefit): |  |  |  |  |
United States – federal | 45.7 |  |  | 41.3 |  |  | 32.6 |
United States – state and local | 6.0 |  |  | 5.5 |  |  | 1.2 |
International | 94.7 |  |  | 85.6 |  |  | 54.4 |
Total current income tax expense | 146.4 |  |  | 132.4 |  |  | 88.2 |
Deferred income tax expense (benefit) components: |  |  |  |  |
United States – federal | (6.4) |  |  | (14.1) |  |  | (0.2) |
United States – state and local | (4.5) |  |  | (2.7) |  |  | 3.1 |
International | (9.7) |  |  | (10.8) |  |  | — |
Total deferred income tax expense (benefit) | (20.6) |  |  | (27.6) |  |  | 2.9 |
Income tax expense | $ | 125.8 |  |  | $ | 104.8 |  |  | $ | 91.1 |
Effective income tax rate | 19.4 | % |  | 20.2 | % |  | 19.7 | %
The following table includes a reconciliation of the U.S. statutory tax rate to our effective income tax rate related to income from continuing operations.
For the Year Ended December 31 | 2024 |  | 2023 |  | 2022
Tax provision at U.S. statutory rate | 21.0 | % |  | 21.0 | % |  | 21.0 | %
State and local income tax | 1.1 | % |  | 0.9 | % |  | 1.1 | %
U.S. tax on foreign earnings | 0.9 | % |  | 1.3 | % |  | 0.6 | %
Italy patent box | (0.8) | % |  | (1.1) | % |  | (1.2) | %
Foreign-Derived Intangible Income ("FDII") | (1.3) | % |  | (1.2) | % |  | (1.1) | %
Excess tax benefits on stock-based compensation | (0.3) | % |  | (0.2) | % |  | (0.5) | %
Audit settlements and unrecognized tax benefits | 0.2 | % |  | 2.7 | % |  | (0.2) | %
Valuation allowance on deferred tax assets | (1.0) | % |  | (3.1) | % |  | (0.2) | %
Tax on undistributed foreign earnings | (0.9) | % |  | 0.3 | % |  | (0.1) | %
Wolverine divestiture | (1.6) | % |  | — | % |  | — | %
Foreign tax rate differential | 2.1 | % |  | 1.6 | % |  | — | %
Amended tax return | — | % |  | (1.0) | % |  | — | %
Other adjustments | — | % |  | (1.0) | % |  | 0.3 | %
Effective income tax rate | 19.4 | % |  | 20.2 | % |  | 19.7 | %
The lower effective tax rate in 2024 compared to 2023 primarily resulted from the Company recording a tax benefit of $6.7 from valuation allowance reversals on U.S. state deferred tax assets and a $5.7 tax benefit of U.S. tax on foreign earnings in 2024. ITT recorded a deferred tax asset of $29.1 on the $138.4 capital loss realized on the Wolverine divestiture. As ITT does not currently anticipate having capital gains sufficient to utilize the capital loss, the Company recorded a full valuation allowance against the deferred tax asset. The higher rate in 2023 was also due to expense of $14.2 relating to a tax audit in Italy covering tax years 2016-2022. The 2023 expense includes $6.8 of U.S. tax on foreign earnings. These tax expenses were offset by $16.1 from valuation allowance reversals on deferred tax assets in Germany. ITT also recognized tax benefits of $4.9 from the filing of an amended 2017 consolidated federal tax return in 2023. The Company provides for deferred taxes on the undistributed earnings and profits of all foreign subsidiaries, determined under U.S. tax law. At December 31, 2024, the amount of undistributed earnings and profits of all foreign subsidiaries was $1,263.3. The Company anticipates that these foreign earnings and future earnings of its foreign subsidiaries that are not indefinitely reinvested will be sufficient to meet its U.S. cash needs. The Company is indefinitely reinvested in any excess of financial reporting over tax basis in its foreign subsidiaries that exceeds undistributed earnings and profits. At December 31, 2024, the indefinitely reinvested excess of financial reporting over tax basis was $89.8. The following table includes the items comprising our deferred tax assets and liabilities.
As of December 31 | 2024 |  | 2023
Deferred Tax Assets: |  |  |
Loss carryforwards | $ | 114.4 |  |  | $ | 97.0 |
Inventory | 23.7 |  |  | 24.1 |
Accruals | 30.5 |  |  | 27.1 |
Employee benefits | 30.9 |  |  | 39.0 |
Research and expenditures capitalization | 22.4 |  |  | 17.8 |
Credit carryforwards | 13.7 |  |  | 11.1 |
Other | 32.3 |  |  | 30.2 |
Gross deferred tax assets | 267.9 |  |  | 246.3 |
Less: Valuation allowance | 90.3 |  |  | 73.3 |
Net deferred tax assets | $ | 177.6 |  |  | $ | 173.0 |
Deferred Tax Liabilities: |  |  |
Intangibles | $ | (96.9) |  |  | $ | (45.3) |
Undistributed earnings | (32.4) |  |  | (46.2) |
Accelerated depreciation | (26.3) |  |  | (24.1) |
Total deferred tax liabilities | $ | (155.6) |  |  | $ | (115.6) |
Net deferred tax assets | $ | 22.0 |  |  | $ | 57.4 |
Deferred taxes included in our Consolidated Balance Sheets were as follows:
As of December 31 | 2024 |  | 2023
Other non-current assets | $ | 74.4 |  |  | $ | 76.0 |
Other non-current liabilities | (52.4) |  |  | (18.6) |
Net deferred tax assets | $ | 22.0 |  |  | $ | 57.4 |
The table below provides a rollforward of our valuation allowance on net deferred tax assets (DTA).
| Federal |  | State |  | Foreign |  | Total
DTA valuation allowance as of December 31, 2021 | $ | — |  |  | $ | 35.7 |  |  | $ | 73.1 |  |  | $ | 108.8 |
Change in assessment | — |  |  | — |  |  | (1.1) |  |  | (1.1) |
Current year operations | — |  |  | 3.8 |  |  | (9.1) |  |  | (5.3) |
DTA valuation allowance as of December 31, 2022 | $ | — |  |  | $ | 39.5 |  |  | $ | 62.9 |  |  | $ | 102.4 |
Change in assessment | — |  |  | (23.1) |  |  | (16.4) |  |  | (39.5) |
Current year operations | — |  |  | (0.8) |  |  | 11.2 |  |  | 10.4 |
DTA valuation allowance as of December 31, 2023 | $ | — |  |  | $ | 15.6 |  |  | $ | 57.7 |  |  | $ | 73.3 |
Change in assessment | — |  |  | (8.3) |  |  |  |  | (8.3) |
Current year operations | 29.1 |  |  | (0.2) |  |  | (3.6) |  |  | 25.3 |
DTA valuation allowance as of December 31, 2024 | $ | 29.1 |  |  | $ | 7.1 |  |  | $ | 54.1 |  |  | $ | 90.3 |
The Company continues to maintain a valuation allowance against certain deferred tax assets attributable to a U.S. federal capital loss carryforward, U.S. state net operating losses and tax credits, and certain foreign net deferred tax assets primarily in Luxembourg, Germany, and the U.K. which are not expected to be realized. Management assesses the available positive and negative evidence to estimate whether sufficient future taxable income will be generated to permit the use of deferred tax assets. The cumulative loss incurred over the three-year period ending December 31, 2024 constitutes significant objective negative evidence, resulting in the recognition of a valuation allowance against the net deferred tax assets for these jurisdictions. Such objective negative evidence limits our ability to consider subjective positive evidence, such as our projections of future taxable income. The amount of the deferred tax asset considered realizable, however, could be adjusted if estimates of future taxable income change or if objective negative evidence in the form of cumulative losses is no longer present and additional weight can be given to subjective evidence. We have the following tax attributes available for utilization at December 31, 2024:
Attribute | Amount |  | First Year of Expiration
U.S. state net operating losses | $ | 273.7 |  |  | 12/31/2025
U.S. federal tax credits | 12.8 |  |  | 12/31/2029
U.S. state tax credits | 0.6 |  |  | 12/31/2027
Foreign net operating losses(a) | 267.1 |  |  | 12/31/2025
(a)Includes approximately $205.0 of net operating loss carryforwards in Luxembourg as of December 31, 2024. Excess tax benefits related to stock-based compensation of $1.8, $0.9 and $2.4 for 2024, 2023 and 2022, respectively, were recorded as an income tax benefit in the statement of operations and have been reflected in the caption “Excess tax benefits on stock-based compensation” within the effective tax rate reconciliation table. Uncertain Tax Positions We recognize income tax benefits from uncertain tax positions only if, based on the technical merits of the position, it is more likely than not that the tax position will be sustained on examination by the taxing authorities. The tax benefits recognized in the Consolidated Financial Statements from such positions are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. The following table displays a rollforward of our unrecognized tax benefits.
For the Year Ended December 31 | 2024 |  | 2023 |  | 2022
Unrecognized tax benefits – January 1 | $ | 5.7 |  |  | $ | 6.7 |  |  | $ | 7.6 |
Additions for: |  |  |  |  |
Current year tax positions | 1.8 |  |  | 1.4 |  |  | 1.7 |
Prior year tax positions | 0.1 |  |  | 0.5 |  |  | 0.3 |
Reductions for: |  |  |  |  |
Prior year tax positions | — |  |  | (0.6) |  |  | (0.1) |
Expiration of statute of limitations | (1.2) |  |  | (2.3) |  |  | (2.8) |
Settlements | — |  |  | — |  |  | — |
Unrecognized tax benefits – December 31 | $ | 6.4 |  |  | $ | 5.7 |  |  | $ | 6.7 |
As of December 31, 2024, $5.7 of the unrecognized tax benefits would impact the effective tax rate for continuing operations, if realized. The Company operates in various tax jurisdictions and is subject to examination by tax authorities in these jurisdictions. The Company is currently under examination in several jurisdictions including Czechia, Germany, India, Italy, and the U.S. The calculation of our tax liability for unrecognized tax benefits includes dealing with uncertainties in the application of complex tax laws and regulations in various tax jurisdictions. Due to the complexity of some uncertainties, the ultimate resolution may result in a payment that is materially different from our current estimate of the unrecognized tax benefit. Over the next 12 months, the net amount of the tax liability for unrecognized tax benefits in foreign and domestic jurisdictions is not expected to change by a significant amount. The following table summarizes the earliest open tax years by major jurisdiction as of December 31, 2024:
Jurisdiction | Earliest Open Year
China | 2019
Czechia | 2014
Denmark | 2019
Germany | 2017
Hong Kong | 2020
India | 2013
Italy | 2016
Japan | 2022
Korea | 2023
Luxembourg | 2017
Mexico | 2016
Singapore | 2019
United States | 2021
We classify interest relating to tax matters as a component of interest expense and tax penalties as a component of income tax expense in our Consolidated Statements of Operations. During 2024, 2023, and 2022 we recognized a net interest expense of $0.2, $0.1, and $0.0, respectively, related to tax matters.

X
- References No definition available. + Details
Name: | us-gaap_IncomeTaxDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for income tax. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482685/740-10-50-12 Reference 2: http://www.xbrl.org/2003/role/exampleRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 55 -Paragraph 231 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482663/740-10-55-231 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12C -Publisher FASB -URI https://asc.fasb.org/1943274/2147482685/740-10-50-12C Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12B -Publisher FASB -URI https://asc.fasb.org/1943274/2147482685/740-10-50-12B Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 270 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Publisher FASB -URI https://asc.fasb.org/1943274/2147477891/740-270-50-1 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SAB Topic 6.I.5.Q1) -Publisher FASB -URI https://asc.fasb.org/1943274/2147479360/740-10-S99-1 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 946 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 13 -Publisher FASB -URI https://asc.fasb.org/1943274/2147480990/946-20-50-13 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 235 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480678/235-10-S99-1 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/740/tableOfContent Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 14 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482685/740-10-50-14 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482685/740-10-50-21 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 17 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482685/740-10-50-17 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -Publisher FASB -URI https://asc.fasb.org/1943274/2147479360/740-10-S99-2 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 30 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482603/740-30-50-2 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration