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Income Taxes | 12 Months Ended
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Dec. 31, 2024
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes The components of the provision for (benefit from) income taxes consisted of the following:
Years ended December 31 (dollars in millions) | 2024 |  | 2023 |  | 2022
Current: |  |  |  |  |
Federal | $ | 124.3 |  |  | $ | 124.9 |  |  | $ | 101.8 |
State | 25.2 |  |  | 28.3 |  |  | 26.6 |
International | 22.5 |  |  | 27.5 |  |  | 30.5 |
Deferred: |  |  |  |  |
Federal | (4.4) |  |  | (4.8) |  |  | (136.9) |
State | (0.5) |  |  | (1.8) |  |  | (34.1) |
International | 0.3 |  |  | 2.8 |  |  | 0.1 |
| $ | 167.4 |  |  | $ | 176.9 |  |  | $ | (12.0) |
The provision for (benefit from) income taxes differs from the U.S. federal statutory rate due to the following items:
Years ended December 31 | 2024 |  | 2023 |  | 2022
Provision at U.S. federal statutory rate(1) | 21.0 | % |  | 21.0 | % |  | 21.0 | %
State taxes, net of federal benefit(1) | 2.8 |  |  | 2.8 |  |  | 2.7 |
U.S pension plan settlement expense(1) | — |  |  | — |  |  | (29.5) |
International income tax rate differential—China | (1.1) |  |  | (1.2) |  |  | (4.6) |
International income tax rate differential—other | 0.7 |  |  | 1.3 |  |  | 3.5 |
Research tax credits | (0.4) |  |  | (0.4) |  |  | (1.0) |
Excess tax benefit on stock compensation | (0.5) |  |  | (0.4) |  |  | (0.5) |
Other | 1.4 |  |  | 1.0 |  |  | 3.0 |
| 23.9 | % |  | 24.1 | % |  | (5.4) | %
(1) Included in 2022 is tax effects of the pension plan settlement expense associated with the termination of the Plan. Refer to Note 13, “Pension and Other Postretirement Benefits” for more information. A tax benefit of $101.9 million on the pretax expense were reflected in computed tax provision at U.S. federal statutory rate and state taxes, net of federal tax benefit for 2022. In 2022, the tax benefit of $65.8 million or a 29.5 percent benefit related to the release of stranded tax effects in AOCL through the income statement was reflected in U.S. pension plan settlement expense. Components of earnings before income taxes were as follows:
Years ended December 31 (dollars in millions) | 2024 |  | 2023 |  | 2022
U.S. | $ | 577.2 |  |  | $ | 596.4 |  |  | $ | 63.9 |
International | 123.8 |  |  | 137.1 |  |  | 159.8 |
| $ | 701.0 |  |  | $ | 733.5 |  |  | $ | 223.7 |
Our 2022 provision for income taxes included $167.7 million of tax benefit related to the effective settlement of the Plan, $101.9 million of which was the related tax effect on the pretax expense of $417.3 million and $65.8 million of which was related to the release of stranded tax effects in AOCL through the Tax Cuts and Jobs Act. Refer to Note 13, “Pension and Other Postretirement Benefits,” for more information. The Company paid income taxes of $187.7 million, $189.5 million, and $175.4 million in 2024, 2023 and 2022, respectively. Undistributed earnings of the Company’s foreign subsidiaries amounted to $695.0 million at December 31, 2024. The Company had $3.5 million accrued for its estimate of withholding taxes due upon repatriation of approximately $93.5 million of foreign earnings it considers not permanently reinvested as of December 31, 2024. The Company considers $601.5 million of the total undistributed earnings to be permanently reinvested as a result of various factors including imposition of statutory restrictions at certain jurisdictions that prohibit the repatriation of a portion of the earnings. Accordingly, no provision for state, local and foreign withholding income taxes has been provided thereon. Upon repatriation of those earnings, in the form of dividends or otherwise, the Company would be subject to state and local taxes, and withholding taxes payable to the various foreign countries. The Company expects to be able to take a 100 percent dividend received deduction to offset any US federal income tax liability. Determination of the amount of unrecognized state and local deferred income tax liability and associated foreign withholding taxes is not practicable due to the complexities associated with its hypothetical calculation. The tax effects of temporary differences of assets and liabilities between income tax and financial reporting are as follows:
December 31 (dollars in millions) | 2024 |  | 2023
| Assets |  | Liabilities |  | Assets |  | Liabilities
Employee benefits | $ | 16.7 |  |  | $ | — |  |  | $ | 12.9 |  |  | $ | — |
Product liability and warranties | 51.6 |  |  | — |  |  | 52.1 |  |  | — |
Inventories | 2.0 |  |  | — |  |  | 3.0 |  |  | — |
Accounts receivable | 12.0 |  |  | — |  |  | 13.3 |  |  | — |
Property, plant and equipment | — |  |  | 49.8 |  |  | — |  |  | 52.4 |
Intangibles | — |  |  | 58.6 |  |  | — |  |  | 62.4 |
Environmental liabilities | 1.4 |  |  | — |  |  | 1.5 |  |  | — |
Undistributed foreign earnings | — |  |  | 3.5 |  |  | — |  |  | 5.1 |
Tax loss and credit carryovers | 9.7 |  |  | — |  |  | 12.3 |  |  | — |
All other | 11.0 |  |  | — |  |  | 17.6 |  |  | — |
Valuation allowance | (6.1) |  |  | — |  |  | (11.7) |  |  | — |
| $ | 98.3 |  |  | $ | 111.9 |  |  | $ | 101.0 |  |  | $ | 119.9 |
Net liability |  |  | $ | 13.6 |  |  |  |  | $ | 18.9 |
The Company believes it is more likely than not that it will realize its net deferred tax assets through the reduction of future taxable income. The Company considered historical operating results in determining the probability of the realization of the deferred tax assets. A reconciliation of the beginning and ending amounts of tax loss carryovers, credit carryovers and valuation allowances is as follows:
| Net Operating Losses and Tax Credits |  | Valuation Allowances
December 31 (dollars in millions) | 2024 |  | 2023 |  | 2024 |  | 2023
Beginning balance | $ | 12.3 |  |  | $ | 10.1 |  |  | $ | 11.7 |  |  | $ | 8.3 |
Change in balance | (2.6) |  |  | 2.2 |  |  | (5.6) |  |  | 3.4 |
Ending balance | $ | 9.7 |  |  | $ | 12.3 |  |  | $ | 6.1 |  |  | $ | 11.7 |
The Company has foreign net operating loss carryovers that expire in 2025 through 2030, with some net operating losses being carried forward indefinitely and state and local net operating loss carryovers that are carried forward indefinitely. A reconciliation of the beginning and ending amount of unrecognized benefits is as follows:
(dollars in millions) | 2024 |  | 2023
Balance at January 1 | $ | 17.2 |  |  | $ | 15.0 |
Change to tax positions from prior years | (1.0) |  |  | 2.2 |
Balance at December 31 | $ | 16.2 |  |  | $ | 17.2 |
The amount of unrecognized tax benefits that, if recognized, would affect the effective income tax rate is $4.3 million. The Company recognizes potential interest and penalties related to unrecognized tax benefits as a component of income tax expense. At December 31, 2024, there was an immaterial amount of interest and penalties accrued. The Company anticipates that there will not be a material decrease in the total amount of unrecognized tax benefits in 2025. The Company’s U.S. federal income tax returns and its U.S. state and local income tax returns are subject to audit for the years 2018-2024 and 2006-2024, respectively. The Company is subject to examinations in foreign tax jurisdictions for the years 2018-2024. If the examinations at certain foreign tax jurisdictions are resolved unfavorably, there could be additional assessments imposed by the relevant authorities.

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