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Income Taxes | 12 Months Ended
--- | ---
Dec. 31, 2024
Income Tax Disclosure [Abstract] |
Income Taxes | (17) Income Taxes A reconciliation of the Company’s effective tax rate to the U.S. federal income tax statutory rate is as follows:
|  | Years Ended December 31, |
|  | 2024 |  |  | 2023 |  |  | 2022 |
U.S. federal income tax statutory rate |  |  | 21.0 | % |  |  | 21.0 | % |  |  | 21.0 | %
Foreign derived intangible income deduction |  |  | (24.9 | ) |  |  | 0.6 |  |  |  | (4.8 | )
Change in valuation allowance |  |  | (22.7 | ) |  |  | 0.1 |  |  |  | (0.3 | )
Withholding taxes, net of foreign tax credits |  |  | 15.4 |  |  |  | (0.4 | ) |  |  | 10.9 |
Federal tax credits |  |  | (11.7 | ) |  |  | 1.5 |  |  |  | (1.5 | )
Effect of foreign operations taxed at various rates |  |  | (8.9 | ) |  |  | 0.9 |  |  |  | (6.8 | )
Change in income tax reserves (including interest) |  |  | 6.7 |  |  |  | (0.5 | ) |  |  | 0.8 |
Base erosion waiver of deductions |  |  | 5.6 |  |  |  | — |  |  |  | — |
State income taxes, net of federal benefit |  |  | (3.0 | ) |  |  | 0.5 |  |  |  | (0.3 | )
Executive compensation |  |  | 1.8 |  |  |  | (0.1 | ) |  |  | 0.7 |
Foreign subpart F income taxed in the U.S., net of foreign tax credits |  |  | 1.6 |  |  |  | — |  |  |  | (0.2 | )
Global intangible low taxed income, net of foreign tax credits |  |  | 1.0 |  |  |  | 0.2 |  |  |  | 3.6 |
Goodwill impairment |  |  | — |  |  |  | (18.4 | ) |  |  | — |
Other |  |  | 12.4 |  |  |  | (0.9 | ) |  |  | — |
|  |  | (5.7 | )% |  |  | 4.5 | % |  |  | 23.1 | %
The components of income (loss) before income taxes and the related (benefit) provision for income taxes consist of the following:
|  | Years Ended December 31, |
|  | 2024 |  |  | 2023 |  |  | 2022 |
Income (loss) before income taxes: |  |  |  |  |  |  |  |  |
United States |  | $ | (57 | ) |  | $ | (760 | ) |  | $ | (90 | )
Foreign |  |  | 237 |  |  |  | (1,168 | ) |  |  | 523 |
|  | $ | 180 |  |  | $ | (1,928 | ) |  | $ | 433 |
Current taxes: |  |  |  |  |  |  |  |  |
Federal |  | $ | 91 |  |  | $ | 21 |  |  | $ | 40 |
State |  |  | 13 |  |  |  | 6 |  |  |  | 7 |
Foreign |  |  | 112 |  |  |  | 120 |  |  |  | 99 |
|  |  | 216 |  |  |  | 147 |  |  |  | 146 |
Deferred taxes: |  |  |  |  |  |  |  |  |
Federal |  |  | (106 | ) |  |  | (130 | ) |  |  | (68 | )
State |  |  | (20 | ) |  |  | (18 | ) |  |  | (8 | )
Foreign |  |  | (100 | ) |  |  | (86 | ) |  |  | 30 |
|  |  | (226 | ) |  |  | (234 | ) |  |  | (46 | )
(Benefit) provision for income taxes |  | $ | (10 | ) |  | $ | (87 | ) |  | $ | 100 |
The significant components of the deferred tax assets and deferred tax liabilities are as follows:
|  | December 31, |
|  | 2024 |  |  | 2023 |
Deferred tax assets: |  |  |  |  |  |
Interest expense carryforwards |  | $ | 178 |  |  | $ | 171 |
Net operating loss carryforwards |  |  | 71 |  |  |  | 85 |
Tax credit carryforwards |  |  | 34 |  |  |  | 22 |
Capitalized research and development |  |  | 146 |  |  |  | 98 |
Lease liability |  |  | 49 |  |  |  | 51 |
Inventory and warranty reserves |  |  | 48 |  |  |  | 54 |
Accrued expenses and other reserves |  |  | 30 |  |  |  | 23 |
Other |  |  | 9 |  |  |  | 15 |
Total deferred tax assets |  |  | 565 |  |  |  | 519 |
Valuation allowance |  |  | (151 | ) |  |  | (190 | )
Net deferred tax assets |  | $ | 414 |  |  | $ | 329 |
Deferred tax liabilities: |  |  |  |  |  |
Acquired intangible assets and goodwill |  | $ | (558 | ) |  | $ | (637 | )
Right-of-use asset |  |  | (48 | ) |  |  | (49 | )
Foreign withholding taxes |  |  | (40 | ) |  |  | (50 | )
Loan costs |  |  | (9 | ) |  |  | (24 | )
Depreciation and amortization |  |  | (4 | ) |  |  | (56 | )
Total deferred tax liabilities |  |  | (659 | ) |  |  | (816 | )
Net deferred tax liabilities |  | $ | (245 | ) |  | $ | (487 | )
On a quarterly basis, the Company evaluates both positive and negative evidence that affects the realizability of its net deferred tax assets and assesses the need for a valuation allowance. The future benefit to be derived from its deferred tax assets is dependent upon its ability to generate sufficient future taxable income to realize the assets. During 2024, the Company decreased its valuation allowance by $39, primarily related to the valuation allowance recorded in connection with certain foreign interest and net operating loss carryforwards. During 2023, the Company increased its valuation allowance by $9, primarily related to the valuation allowance recorded in connection with certain foreign interest and net operating loss carryforwards. Deferred taxes have been recorded related to historical outside basis differences, primarily unremitted earnings, of certain of the Company’s foreign subsidiaries. During 2024, the Company recorded a tax benefit of $8 related to such taxes for prior periods. As of December 31, 2024, the Company had U.S. federal and state as well as foreign gross research and other tax credit carryforwards of $16, $39 and $0, respectively. Included in the total carryforwards are $1 of federal and $20 of state credits that can be carried forward indefinitely while the remaining credits expire at various dates through 2038. The Company also had U.S. federal and state as well as foreign gross net operating loss and capital loss carryforwards of $3, $41 and $273, respectively. Included in the total carryforwards are $2, $1 and $50 of losses from federal, state and foreign that can be carried forward indefinitely while the remaining losses expire at various dates through 2043. The Company had $371 and $362 of U.S. federal and foreign interest carryforwards, respectively, that can be carried forward indefinitely. Although the Company believes that its tax positions are consistent with applicable U.S. federal, state and international laws, it maintains certain income tax reserves as of December 31, 2024 in the event its tax positions were to be challenged by the applicable tax authority and additional tax assessed upon audit. A reconciliation of the beginning and ending amount of gross unrecognized tax benefits, excluding interest and penalties, is as follows:
|  | Years Ended December 31, |
|  | 2024 |  |  | 2023 |  |  | 2022 |
Balance at beginning of year |  | $ | 86 |  |  | $ | 83 |  |  | $ | 43 |
(Decreases) increases for tax positions taken during prior years |  |  | (4 | ) |  |  | (5 | ) |  |  | 35 |
Increases for tax positions taken during the current year |  |  | 36 |  |  |  | 12 |  |  |  | 9 |
Reductions related to expiration of statutes of limitations and audit settlements |  |  | (24 | ) |  |  | (4 | ) |  |  | (4 | )
Balance at end of year |  | $ | 94 |  |  | $ | 86 |  |  | $ | 83 |
The net increase in gross unrecognized tax benefits in 2024 was primarily due to the addition of income tax reserves related to intercompany transactions. The Company also recorded an offsetting asset of $18 against these reserves. The Company accrues interest and, if applicable, penalties for any uncertain tax positions. Interest and penalties are classified as a component of income tax (benefit) expense. As of December 31, 2024, 2023 and 2022, the Company accrued interest on unrecognized tax benefits of approximately $8, $7 and $6, respectively. Over the next 12 months, it is reasonably possible that the Company may recognize approximately $3 of previously net unrecognized tax benefits, excluding interest and penalties, related to various U.S. federal and state as well as foreign tax positions, primarily due to the expiration of statutes of limitations. The Company is subject to examination by U.S. federal and state as well as foreign tax authorities. The U.S. federal statute of limitations remains open for tax years 2020 through the present. The statute of limitations for the Company’s tax filings in other jurisdictions varies between fiscal years 2019 through present. The Company also has certain prior year federal credit carryforwards and state tax loss and credit carryforwards that are subject to examination to the extent used in an open year.

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