XML 25 R14.htm IDEA: XBRL DOCUMENT
v3.24.0.1

Income Taxes | 12 Months Ended
--- | ---
Dec. 31, 2023
Income Tax Disclosure [Abstract] |
Income Taxes | 5. Income Taxes
INCOME BEFORE INCOME TAXES (Dollars in millions) |  | 2023 |  |  | 2022 |  |  | 2021 |
U.S. |  | $ | 29 |  |  | $ | (3 | ) |  | $ | (38 | )
Non-U.S. |  |  | 583 |  |  |  | 606 |  |  |  | 652 |
Total |  | $ | 612 |  |  | $ | 603 |  |  | $ | 614 |
PROVISION FOR INCOME TAXES (Dollars in millions) |  | 2023 |  |  | 2022 |  |  | 2021 |
Current |  |  |  |  |  |  |  |  |
U.S. federal |  | $ | 19 |  |  | $ | 32 |  |  | $ | 8 |
Non-U.S. |  |  | 210 |  |  |  | 181 |  |  |  | 191 |
U.S. state and local |  |  | 3 |  |  |  | 5 |  |  |  | (2 | )
Deferred |  |  |  |  |  |  |  |  |
U.S. federal |  |  | (7 | ) |  |  | (20 | ) |  |  | (8 | )
Non-U.S. |  |  | (101 | ) |  |  | (17 | ) |  |  | (10 | )
U.S. state and local |  |  | (1 | ) |  |  | (3 | ) |  |  | (2 | )
Total income tax expense |  | $ | 123 |  |  | $ | 178 |  |  | $ | 177 |
EFFECTIVE INCOME TAX RATE (%) |  | 2023 |  |  | 2022 |  |  | 2021 |  |
U.S. federal income tax rate |  |  | 21.0 |  | % |  | 21.0 |  | % |  | 21.0 |  | %
Non-Deductible Expenses |  |  | 1.8 |  |  |  | 0.5 |  |  |  | (0.1 | ) |
Foreign tax rate variances |  |  | 4.6 |  |  |  | 3.6 |  |  |  | 3.1 |  |
Tax credits |  |  | (3.9 | ) |  |  | (3.5 | ) |  |  | (2.2 | ) |
Change in Valuation Allowances |  |  | 11.6 |  |  |  | (1.7 | ) |  |  | (0.1 | ) |
Changes in tax reserves |  |  | 2.7 |  |  |  | (0.2 | ) |  |  | 0.6 |  |
Provision to Return |  |  | (0.2 | ) |  |  | 0.6 |  |  |  | (0.2 | ) |
Earnings of equity investments |  |  | (0.2 | ) |  |  | (0.1 | ) |  |  | (0.1 | ) |
Withholding taxes |  |  | 5.2 |  |  |  | 4.0 |  |  |  | 4.5 |  |
State taxes, net of federal benefit |  |  | 0.3 |  |  |  | 0.4 |  |  |  | (0.5 | ) |
Tax Audits |  |  | 0.0 |  |  |  | 1.0 |  |  |  | 0.6 |  |
Other Deferred Tax Asset Recognized 1) |  |  | (26.7 | ) |  |  | 0.0 |  |  |  | 0.0 |  |
U.S. FDII Deduction |  |  | (0.4 | ) |  |  | 0.0 |  |  |  | 0.0 |  |
U.S. GILTI Tax |  |  | 3.4 |  |  |  | 3.4 |  |  |  | 1.1 |  |
Impact of Translation Rates |  |  | 1.1 |  |  |  | 0.2 |  |  |  | — |  |
Other, net |  |  | (0.2 | ) |  |  | 0.3 |  |  |  | 1.2 |  |
Effective income tax rate |  |  | 20.1 |  | % |  | 29.5 |  | % |  | 28.9 |  | %
1) Deferred tax asset recognized in 2023 due to the transfer of certain assets and operations as part of the Company's restructuring activities. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. On December 31, 2023, the Company had net operating loss carryforwards (NOL’s) of approximately $513 million, of which approximately $419 million have no expiration date. The remaining losses expire on various dates through 2037. The Company also has $25 million of U.S. Foreign Tax Credit carry forwards, which begin to expire in 2026. Valuation allowances have been established which partially offset the related deferred assets. Such allowances are primarily provided against NOL’s of companies that have perennially incurred losses, as well as the NOL’s of companies that are start-up operations and have not established a pattern of profitability. The Company assesses all available evidence, both positive and negative, to determine the amount of any required valuation allowance. During 2023, the Company recorded valuation allowances against deferred tax assets of tax losses in certain companies and a partial valuation allowance against the deferred tax asset recognized due to the transfer of certain assets and operations as part of the Company’s restructuring activities, on the basis of management’s assessment of the amount of the related deferred tax assets that are not more likely than not to be realized. The foreign tax rate variance reflects the fact that approximately two-thirds of the Company’s non-U.S. pre-tax income is generated by business operations located in tax jurisdictions where the tax rate is between 20-30%. The tax rate from quarter to quarter and from year to year is also impacted by the mix of earnings and tax rates in various jurisdictions compared to the same periods or prior years. The Company has reserves for income taxes that may become payable in future periods as a result of tax audits. These reserves represent the Company’s best estimate of the potential liability for tax exposures. Inherent uncertainties exist in estimates of tax exposures due to changes in tax law, both legislated and concluded through the various jurisdictions’ court systems. The Company files income tax returns in the United States federal jurisdiction, and various states and non-U.S. jurisdictions. At any given time, the Company is undergoing tax audits in several tax jurisdictions, covering multiple years. The Company is no longer subject to income tax examination by the U.S. Federal tax authorities for years prior to 2015. With few exceptions, the Company is no longer subject to income tax examination by U.S. state or local tax authorities or by non-U.S. tax authorities for years before 2011. The Company is undergoing tax audits in several non-U.S. jurisdictions and several U.S. state jurisdictions, covering multiple years. As of December 31, 2023, as a result of those tax examinations, the Company is not aware of any proposed income tax adjustments that would have a material impact on the Company’s financial statements, however, other audits could result in additional increases or decreases to the unrecognized tax benefits in some future period or periods. The Company believes that some of these audits will conclude within the next 12 months and that it is reasonably possible the amount of uncertain income tax positions, including interest, may decrease by $10-$15 million due to settlement of audits and expiration of statues of limitations. The Company recognizes interest and potential penalties accrued related to unrecognized tax benefits in tax expense. As of December 31, 2022, the Company recorded $46 million for unrecognized tax benefits, including $11 million of accrued interest and penalties. During 2023, the Company recorded a net increase of $8 million to income tax reserves for unrecognized tax benefits related to tax positions taken in prior years. Also, during 2023, the Company recorded a net increase of $7 million to income tax reserves for unrecognized tax benefits based on tax positions taken in the current year. The Company had $14 million accrued for the payment of interest and penalties as of December 31, 2023. Of the total unrecognized tax benefits of $64 million recorded at December 31, 2023, $33 million is classified as current income tax payable, and $31 million is classified as non-current tax payable included in Other Non-Current Liabilities on the Consolidated Balance Sheets. Substantially all of these reserves would impact the effective tax rate if released into income. The following table summarizes the activity related to the Company’s unrecognized tax benefits (dollars in millions):
UNRECOGNIZED TAX BENEFITS |  | 2023 |  |  | 2022 |  |  | 2021 |
Unrecognized tax benefits at beginning of year |  | $ | 67 |  |  | $ | 65 |  |  | $ | 63 |
Increases as a result of tax positions taken during a prior period |  |  | 8 |  |  |  | 0 |  |  |  | 3 |
Increases as a result of tax positions taken during the current period |  |  | 7 |  |  |  | 7 |  |  |  | 5 |
Decreases as a result of tax positions taken during a prior period |  |  | 0 |  |  |  | 0 |  |  |  | 0 |
Decreases relating to settlements with taxing authorities |  |  | 0 |  |  |  | (4 | ) |  |  | (4 | )
Decreases resulting from the lapse of the applicable statute of limitations |  |  | 0 |  |  |  | 0 |  |  |  | (1 | )
Translation Difference |  |  | 1 |  |  |  | (1 | ) |  |  | (1 | )
Total unrecognized tax benefits at end of year |  | $ | 83 |  |  | $ | 67 |  |  | $ | 65 |
The tax effect of temporary differences and carryforwards that comprise significant portions of deferred tax assets and liabilities were as follows (dollars in millions).
DEFERRED TAXES |  | December 31, |
|  | 2023 |  |  | 2022 |  |  | 2021 |
Assets |  |  |  |  |  |  |  |  |
Provisions |  | $ | 126 |  |  | $ | 99 |  |  | $ | 136 |
Costs capitalized for tax |  |  | 57 |  |  |  | 43 |  |  |  | 29 |
Other Deferred Tax Asset 1) |  |  | 160 |  |  |  | 0 |  |  |  | 0 |
Property, plant and equipment |  |  | 11 |  |  |  | 12 |  |  |  | 0 |
Retirement Plans |  |  | 40 |  |  |  | 42 |  |  |  | 46 |
Tax receivables, principally NOL’s |  |  | 133 |  |  |  | 123 |  |  |  | 109 |
Deferred tax assets before allowances |  |  | 527 |  |  |  | 319 |  |  |  | 320 |
Valuation allowances |  |  | (129 | ) |  |  | (46 | ) |  |  | (59 | )
Total |  |  | 398 |  |  |  | 273 |  |  |  | 261 |
Liabilities |  |  |  |  |  |  |  |  |
Statutory tax allowances |  |  | 0 |  |  |  | 0 |  |  |  | (6 | )
Distribution taxes |  |  | (3 | ) |  |  | (3 | ) |  |  | (6 | )
Other |  |  | (1 | ) |  |  | (2 | ) |  |  | (3 | )
Total |  |  | (4 | ) |  |  | (5 | ) |  |  | (15 | )
Net deferred tax asset |  | $ | 394 |  |  | $ | 268 |  |  | $ | 246 |
1) Deferred tax asset recognized in 2023 due to the transfer of certain assets and operations as part of the Company’s restructuring activities, and is partially offset by the increased valuation allowances. The following table summarizes the activity related to the Company’s valuation allowances (dollars in millions):
VALUATION ALLOWANCES AGAINST DEFERRED TAX ASSETS |  | December 31, |
|  | 2023 |  |  | 2022 |  |  | 2021 |
Allowances at beginning of year |  | $ | 46 |  |  | $ | 59 |  |  | $ | 68 |
Benefits reserved current year |  |  | 81 |  |  |  | 14 |  |  |  | 5 |
Benefits recognized current year 1) |  |  | (2 | ) |  |  | (27 | ) |  |  | (9 | )
Translation difference |  |  | 4 |  |  |  | 0 |  |  |  | (5 | )
Allowances at end of year |  | $ | 129 |  |  | $ | 46 |  |  | $ | 59 |
1) Benefits reserved in the current year include the partial reserve against deferred tax assets recognized in 2023 due to the transfer of certain assets and operations as part of the Company's restructuring activities.

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 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 -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 2: 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 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//740/tableOfContent Reference 4: 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 5: 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 6: 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//1943274/2147482526/740-270-50-1 Reference 7: 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 8: 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 9: 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 10: 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