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INCOME AND OTHER TAXES | 9 Months Ended
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Sep. 30, 2023
Income Tax Disclosure [Abstract] |
INCOME AND OTHER TAXES | INCOME AND OTHER TAXES Uncertain Tax Benefits As of September 30, 2023, we had gross unrecognized tax be nefits of $2.4 (net unrecognized tax benefits of $2.4). All of these net unrecognized tax benefits would impact our effective tax rate from continuing operations if recognized. We classify interest and penalties related to unrecognized tax benefits as a component of our income tax provision. As of September 30, 2023, gross accrued interest totaled $1.3 (net accrued interest of $1.2). As of September 30, 2023, we had no accrual for penalties included in our unrecognized tax benefits. Based on the outcome of certain examinations or as a result of the expiration of statutes of limitations for certain jurisdictions, we believe that within the next 12 months it is reasonably possible that our previously unrecognized tax benefits could decrease by up to $1.0. The previously unrecognized tax benefits relate to a variety of tax matters including transfer pricing and various state matters. Other Tax Matters For the three months ended September 30, 2023, we recorded an income tax provision of $12.4 on $48.1 of pre-tax income from continuing operations, resulting in an effective rate of 25.8%. This compares to an income tax benefit for the three months ended October 1, 2022 of $2.5 on $10.0 of pre-tax income from continuing operations, resulting in an effective rate of (25.0)%. The most significant items impacting the income tax provision for the third quarter of 2023 are (i) $0.8 of foreign withholding tax, and (ii) $0.3 of excess tax benefits associated with stock-based compensation awards that vested and/or were exercised during the period. The most significant item impacting the income tax benefit for the third quarter of 2022 was a tax benefit of $4.2 related to the release of valuation allowances recognized against certain deferred tax assets as we now expect these deferred tax assets to be realized. For the nine months ended September 30, 2023, we recorded an income tax provision of $31.5 on $144.6 of pre-tax income from continuing operations, resulting in an effective rate of 21.8%. This compares to an income tax provision for the nine months ended October 1, 2022 of $4.5 on $49.1 of pre-tax income from continuing operations, resulting in an effective rate of 9.2%. The most significant items impacting the income tax provision during the first nine months of 2023 and 2022 were (i) $1.8 and $4.2, respectively, of tax benefit related to the release of valuation allowances recognized against certain deferred tax assets as we now expect these deferred tax assets to be realized, (ii) $1.7 and $0.7, respectively, of excess tax benefits associated with stock-based compensation awards that vested and/or were exercised during the period, and (iii) $1.2 and $0.7, respectively, of tax benefits related to revisions to liabilities for uncertain tax positions. We perform reviews of our income tax positions on a continuous basis and accrue for potential uncertain positions when we determine that an uncertain position meets the criteria of the Income Taxes Topic of the Codification. Accruals for these uncertain tax positions are recorded in “Income taxes payable” and “Deferred and other income taxes” in the accompanying condensed consolidated balance sheets based on the expectation as to the timing of when the matters will be resolved. As events change and resolutions occur, these accruals are adjusted, such as in the case of audit settlements with taxing authorities. U.S. Federal income tax returns are subject to examination for a period of three years after filing the return. We are not currently under examination by the Internal Revenue Service and believe any contingencies in open years are adequately provided for. State income tax returns generally are subject to examination for a period of three to five years after filing the respective tax returns. The impact on such tax returns of any federal changes remains subject to examination by various states for a period of up to one year after formal notification to the states. We regularly have various state income tax returns in the process of examination. We believe any uncertain tax positions related to these examinations have been adequately provided for. We regularly have various foreign income tax returns under examination. We believe that any uncertain tax positions related to these examinations have been adequately provided for. An unfavorable resolution of one or more of the above matters could have a material impact on our financial position, results of operations, or cash flows in the quarter and year in which an adjustment is recorded or the tax is due or paid. As audits and examinations are still in process, the timing of the ultimate resolution and any payments that may be required for the above matters cannot be determined at this time.

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