XML 35 R16.htm IDEA: XBRL DOCUMENT
v3.24.1.1.u2

Income Taxes | 12 Months Ended
--- | ---
Mar. 31, 2024
Income Taxes [Abstract] |
Income Taxes | Note 8: Income Taxes The U.S. and foreign components of earnings before income taxes and the provision or benefit for income taxes consisted of the following:
|  | Years ended March 31, |
|  | 2024 |  |  | 2023 |  |  | 2022 |
Components of earnings before income taxes: |  |  |  |  |  |  |  |  |
United States |  | $ | 37.2 |  |  | $ | 12.5 |  |  | $ | 0.4 |
Foreign |  |  | 177.4 |  |  |  | 112.8 |  |  |  | 101.1 |
Total earnings before income taxes |  | $ | 214.6 |  |  | $ | 125.3 |  |  | $ | 101.5 |
Income tax provision (benefit): |  |  |  |  |  |  |  |  |
Federal: |  |  |  |  |  |  |  |  |
Current |  | $ | 1.6 |  |  | $ | 1.5 |  |  | $ | 0.1 |
Deferred |  |  | 7.1 |  |  |  | (47.5 | ) |  |  | - |
State: |  |  |  |  |  |  |  |  |  |  |  |
Current |  |  | 2.4 |  |  |  | 2.3 |  |  |  | 1.1 |
Deferred |  |  | (0.9 | ) |  |  | (11.4 | ) |  |  | - |
Foreign: |  |  |  |  |  |  |  |  |  |  |  |
Current |  |  | 41.0 |  |  |  | 27.5 |  |  |  | 17.8 |
Deferred |  |  | - |  |  |  | (0.7 | ) |  |  | (3.8 | )
Total income tax provision (benefit) |  | $ | 51.2 |  |  | $ | (28.3 | ) |  | $ | 15.2 |
The reconciliation between the U.S. federal statutory rate and the Company’s effective tax rate was as follows:
|  | Years ended March 31, |
|  | 2024 |  |  | 2023 |  |  | 2022 |
Statutory federal tax |  |  | 21.0 | % |  |  | 21.0 | % |  |  | 21.0 | %
State taxes, net of federal benefit |  |  | 0.5 |  |  |  | (0.1 | ) |  |  | 1.4 |
Taxes on non-U.S. earnings and losses |  |  | 3.7 |  |  |  | 5.8 |  |  |  | 3.5 |
Valuation allowances |  |  | 2.5 |  |  |  | (42.9 | ) |  |  | (8.8 | )
Tax credits and benefits |  |  | (2.6 | ) |  |  | (4.5 | ) |  |  | (3.4 | )
Compensation |  |  | 0.3 |  |  |  | 0.7 |  |  |  | 0.6 |
Tax rate or law changes |  |  | - |  |  |  | (0.2 | ) |  |  | 0.6 |
Uncertain tax positions, net of settlements |  |  | (0.2 | ) |  |  | 0.4 |  |  |  | (0.2 | )
Notional interest deductions |  |  | (1.2 | ) |  |  | (1.7 | ) |  |  | (2.7 | )
Dividends and taxable foreign inclusions |  |  | 0.4 |  |  |  | 0.9 |  |  |  | 1.6 |
Other |  |  | (0.5 | ) |  |  | (2.0 | ) |  |  | 1.4 |
Effective tax rate |  |  | 23.9 | % |  |  | (22.6 | %) |  |  | 15.0 | %
The Company’s fiscal 2024 effective tax rate was favorably impacted by a $3.1 million tax benefit related to the sale of three automotive businesses based in Germany, which is presented in the table above within dividends and taxable foreign inclusions. The Company’s fiscal 2023 effective tax rate was favorably impacted by an income tax benefit related to the reversal of a valuation allowance on deferred tax assets in the U.S. The effective tax rate in fiscal 2022 was significantly impacted by an impairment reversal related to the liquid-cooled automotive business and income tax charges or benefits related to valuation allowances. See Note 2 for information regarding the sale of the three automotive businesses in fiscal 2024 and the impairment reversal in fiscal 2022. The income tax charges or benefits related to valuation allowances are described below. The Company records valuation allowances against its net deferred tax assets to the extent it determines it is more likely than not that such assets will not be realized in the future. Each quarter, the Company evaluates the probability that its deferred tax assets will be realized and determines whether valuation allowances or adjustments thereto are needed. This determination involves judgment and the use of significant estimates and assumptions, including expectations of future taxable income and tax planning strategies. In addition, the Company considers the duration of statutory carryforward periods and historical financial results. Based upon its analyses during fiscal 2024, the Company recorded net tax expense to increase deferred tax asset valuation allowances by $5.4 million. Based upon its analyses during fiscal 2023, the Company reversed the valuation allowance related to certain deferred tax assets in the U.S. and, as a result, recorded an income tax benefit of $57.3 million. The Company had previously maintained a full valuation allowance against net deferred tax assets in the U.S. since fiscal 2021. During fiscal 2023, the Company determined it was more likely than not that these deferred tax assets in the U.S. would be realized after consideration of both positive and negative objectively verifiable evidence. The Company placed substantial weight on its fiscal 2022 and 2023 earnings, which resulted in a significant cumulative three-year income position. The Company also considered forecasted future earnings in certain key businesses. The Company maintained, however, a valuation allowance on the portion of the deferred tax assets in the U.S. related to certain federal and state tax attributes that are not expected to be realized prior to expiration. In addition, the Company recorded net tax expense to increase other deferred tax asset valuation allowances by $3.6 million. Based upon its analyses during fiscal 2022, the Company determined it was more likely than not that the deferred tax assets in certain foreign jurisdictions would be realized. As a result, the Company reversed the valuation allowances related to these deferred tax assets and recorded income tax benefits totaling $13.0 million. The Company’s analyses included consideration of the termination of a sale agreement for the liquid-cooled automotive business and the related impairment reversal. Separately, the Company determined it was more likely than not that the deferred tax assets in a foreign jurisdiction would not be realized. As a result, the Company recorded an income tax charge of $1.6 million. Together, these valuation allowance adjustments resulted in a net income tax benefit of $11.4 million during fiscal 2022. In addition, the Company recorded net tax expense to increase other deferred tax asset valuation allowances by $2.5 million. At March 31, 2024, valuation allowances against deferred tax assets in the U.S. and in certain foreign jurisdictions totaled $42.9 million and $20.1 million, respectively. The Company will maintain the valuation allowances in each applicable tax jurisdiction until it determines it is more likely than not the deferred tax assets will be realized, thereby eliminating the need for a valuation allowance. Future events or circumstances, such as lower taxable income or unfavorable changes in the financial outlook of the Company’s operations in the U.S. and certain foreign jurisdictions, could necessitate the establishment of further valuation allowances. The tax effects of temporary differences that gave rise to deferred tax assets and liabilities were as follows:
|  | March 31, |
|  | 2024 |  |  | 2023 |
Deferred tax assets: |  |  |  |  |  |
Accounts receivable |  | $ | 0.7 |  |  | $ | 0.9 |
Inventories |  |  | 6.3 |  |  |  | 6.0 |
Plant and equipment |  |  | 12.0 |  |  |  | 17.2 |
Lease liabilities |  |  | 19.1 |  |  |  | 15.9 |
Pension and employee benefits |  |  | 27.7 |  |  |  | 24.1 |
Net operating and capital losses |  |  | 45.9 |  |  |  | 55.4 |
Credit carryforwards |  |  | 45.3 |  |  |  | 49.0 |
Research and experimental expenditures |  |  | 12.2 |  |  |  | 8.0 |
Other, principally accrued liabilities |  |  | 11.2 |  |  |  | 13.2 |
Total gross deferred tax assets |  |  | 180.4 |  |  |  | 189.7 |
Less: valuation allowances |  |  | (63.0 | ) |  |  | (61.6 | )
Net deferred tax assets |  |  | 117.4 |  |  |  | 128.1 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
Plant and equipment |  |  | 7.2 |  |  |  | 7.5 |
Lease assets |  |  | 18.8 |  |  |  | 15.7 |
Goodwill |  |  | 4.8 |  |  |  | 4.8 |
Intangible assets |  |  | 40.9 |  |  |  | 20.1 |
Other |  |  | 0.6 |  |  |  | 1.1 |
Total gross deferred tax liabilities |  |  | 72.3 |  |  |  | 49.2 |
Net deferred tax assets |  | $ | 45.1 |  |  | $ | 78.9 |
Unrecognized tax benefits were as follows:
|  | Years ended March 31, |
|  | 2024 |  |  | 2023 |
Beginning balance |  | $ | 9.7 |  |  | $ | 9.3 |
Gross increases - tax positions in prior period |  |  | 0.5 |  |  |  | 0.2 |
Gross decreases - tax positions in prior period |  |  | - |  |  |  | (0.1 | )
Gross increases - tax positions in current period |  |  | 1.3 |  |  |  | 0.9 |
Lapse of statute of limitations |  |  | (2.3 | ) |  |  | (0.6 | )
Ending balance |  | $ | 9.2 |  |  | $ | 9.7 |
The Company’s liability for unrecognized tax benefits as of March 31, 2024 was $9.2 million and, if recognized, $7.3 million would have an effective tax rate impact. The Company does not expect a significant change in unrecognized tax benefits during fiscal 2025. The Company recognizes interest and penalties related to unrecognized tax benefits as a component of income tax expense. During fiscal 2024, 2023 and 2022, interest and penalties accrued on the consolidated balance sheets and included within income tax expense in the consolidated statements of operations were not significant. The Company files income tax returns in multiple jurisdictions and is subject to examination by taxing authorities throughout the world. At March 31, 2024, the Company was under income tax examination in a number of jurisdictions. The Company’s major tax jurisdictions include the United States and Italy. For the United States, fiscal 2021 through fiscal 2023 remain subject to examination. For Italy, fiscal 2018 through fiscal 2023 remain subject to examination. At March 31, 2024, the Company had federal and state tax credits of $58.3 million that, if not utilized against U.S. taxes, will expire between fiscal 2025 and 2044. The Company also had state and local tax loss carryforwards totaling $138.6 million. If not utilized against state apportioned taxable income, certain state and local carryforwards will expire between fiscal 2025 and 2044, while some will not expire due to an unlimited carryforward period. In addition, the Company had tax loss and foreign attribute carryforwards totaling $236.3 million in various tax jurisdictions throughout the world. Certain of the carryforwards in foreign jurisdictions are offset by valuation allowances. If not utilized against taxable income, $61.7 million of these carryforwards will expire between fiscal 2025 and 2034, and $174.6 million, mainly related to Germany and Italy, will not expire due to an unlimited carryforward period. The Company’s practice and intention is to reinvest, with certain insignificant exceptions, the earnings of its non-U.S. subsidiaries outside of the U.S., and therefore, the Company has not recorded foreign withholding taxes or deferred income taxes for these earnings. The Company has estimated the net amount of unrecognized foreign withholding tax and deferred tax liabilities would total approximately $16.0 million if the accumulated foreign earnings were distributed; however, the actual tax cost would be dependent on circumstances existing when remittance occurs.

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