XML 42 R27.htm IDEA: XBRL DOCUMENT
v3.20.4

Income Taxes | 12 Months Ended
--- | ---
Dec. 31, 2020
Income Tax Disclosure [Abstract] |
Income Taxes | INCOME TAXES The provision for income taxes consists of the following:
| Year Ended December 31,
| 2020 |  | 2019 |  | 2018
| (Amounts in thousands)
Current: |  |  |  |  |
U.S. federal | $ | 40,234 |  |  | $ | 22,001 |  |  | $ | 12,079 |
Foreign | 42,487 |  |  | 61,976 |  |  | 29,968 |
State and local | 5,894 |  |  | 4,506 |  |  | 2,647 |
Total current | 88,615 |  |  | 88,483 |  |  | 44,694 |
Deferred: |  |  |  |  |
U.S. federal | (50,038) |  |  | (1,644) |  |  | 6,567 |
Foreign | 25,356 |  |  | (12,243) |  |  | (4,585) |
State and local | (3,902) |  |  | 897 |  |  | (126) |
Total deferred | (28,584) |  |  | (12,990) |  |  | 1,856 |
Total provision | $ | 60,031 |  |  | $ | 75,493 |  |  | $ | 46,550 |
The provision for income taxes differs from the statutory corporate rate due to the following:
| Year Ended December 31,
| 2020 |  | 2019 |  | 2018
| (Amounts in millions)
Statutory federal income tax at 21% | $ | 39.2 |  |  | $ | 67.7 |  |  | $ | 32.9 |
Foreign impact, net | (1.3) |  |  | 4.5 |  |  | (5.9) |
Impact of U.S. Tax Reform Act | — |  |  | — |  |  | (5.7) |
Change in valuation allowances | 26.9 |  |  | 0.3 |  |  | 15.7 |
State and local income taxes, net | 2.0 |  |  | 5.4 |  |  | 3.7 |
Research and development credit | (5.2) |  |  | (5.4) |  |  | — |
Other, net | (1.6) |  |  | 3.0 |  |  | 5.9 |
Total | $ | 60.0 |  |  | $ | 75.5 |  |  | $ | 46.6 |
Effective tax rate | 32.1 | % |  | 23.4 | % |  | 29.8 | %
In response to the COVID-19 pandemic, many governments have enacted or are contemplating measures to provide aid and economic stimulus. These measures may include deferring the due dates of tax payments or other changes to their income and non-income-based tax laws. The Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), which was enacted on March 27, 2020 in the U.S., includes measures to assist companies, including temporary changes to income and non-income-based tax laws. For the year ended December 31, 2020, there were no material tax impacts to our condensed consolidated financial statements as they relate to the CARES Act or any other global COVID-19 measures. We continue to monitor additional guidance issued by the U.S. Treasury Department, the Internal Revenue Service and others. For the years ended December 31, 2020, 2019 and 2018 we have asserted indefinite reinvestment on certain earnings of our foreign subsidiaries. As of December 31, 2020, we have not recorded approximately $19.1 million of deferred tax liabilities associated with remaining unremitted earnings considered indefinitely reinvested, primarily related to foreign withholding taxes that would be due upon repatriation of the designated earnings to the U.S. 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. Significant components of the consolidated deferred tax assets and liabilities were:
| December 31,
| 2020 |  | 2019
| (Amounts in thousands)
Deferred tax assets related to: |  |  |
Retirement benefits | $ | 29,754 |  |  | $ | 25,214 |
Net operating loss carryforwards | 109,020 |  |  | 101,193 |
Compensation accruals | 20,290 |  |  | 24,685 |
Inventories | 36,402 |  |  | 34,846 |
Credit and capital loss carryforwards | 136,956 |  |  | 131,744 |
Warranty and accrued liabilities | 27,483 |  |  | 18,741 |
Bad debt reserve | 17,455 |  |  | 30,884 |
Operating lease liability | 25,446 |  |  | 27,799 |
Other | 38,457 |  |  | 25,339 |
Total deferred tax assets | 441,263 |  |  | 420,445 |
Valuation allowances | (287,787) |  |  | (266,414) |
Net deferred tax assets | 153,476 |  |  | 154,031 |
Deferred tax liabilities related to: |  |  |
Property, plant and equipment | (11,714) |  |  | (26,311) |
Goodwill and intangibles | (101,818) |  |  | (114,122) |
Foreign undistributed earnings | (50,332) |  |  | (67,930) |
Operating lease right-of-use-assets | (25,799) |  |  | (27,799) |
Other | (17,621) |  |  | (12,623) |
Total deferred tax liabilities | (207,284) |  |  | (248,785) |
Deferred tax liabilities, net | $ | (53,808) |  |  | $ | (94,754) |
We have $481.7 million of U.S. and foreign net operating loss carryforwards at December 31, 2020. Of this total, $33.1 million are state net operating losses. Net operating losses generated in the U.S., if unused, will expire in 2024 through 2026 tax years. The majority of our foreign net operating losses carry forward without expiration. Additionally, we have $35.9 million of foreign tax credit carryforwards at December 31, 2020. The foreign tax credit carryforwards, if unused, will expire in 2026, 2028-2030 tax years. Our valuation allowances primarily relate to the deferred tax assets established for U.S. foreign tax credit carryforwards of $35.9 million, a foreign capital loss carryforward of $97.8 million, and other foreign deferred tax assets of $154.1 million. Th e foreign capital loss carryforward was the result of a reorganization of certain foreign subsidiaries in the current year. Due to its capital nature, it is uncertain if the loss will be utilized within its ten year carryforward period and, therefore, has a full valuation allowance. Earnings before income taxes comprised:
| Year Ended December 31,
| 2020 |  | 2019 |  | 2018
| (Amounts in thousands)
U.S. | $ | 73,109 |  |  | $ | 110,500 |  |  | $ | 68,838 |
Foreign | 113,703 |  |  | 211,933 |  |  | 87,600 |
Total | $ | 186,812 |  |  | $ | 322,433 |  |  | $ | 156,438 |
A tabular reconciliation of the total gross amount of unrecognized tax benefits, excluding interest and penalties, is as follows (in millions):
| 2020 |  | 2019 |  | 2018
Balance — January 1 | $ | 40.6 |  |  | $ | 41.2 |  |  | $ | 51.5 |
Gross amount of increase (decrease) in unrecognized tax benefits resulting from tax positions taken: |  |  |  |  |
During a prior year | 3.8 |  |  | 8.8 |  |  | (6.6) |
During the current period | 11.1 |  |  | 6.3 |  |  | 4.0 |
Decreases in unrecognized tax benefits relating to: |  |  |  |  |
Settlements with taxing authorities | (0.2) |  |  | (11.4) |  |  | (2.7) |
Lapse of the applicable statute of limitations | (2.5) |  |  | (3.2) |  |  | (3.7) |
Increase (decrease) in unrecognized tax benefits relating to foreign currency translation adjustments | 2.0 |  |  | (1.1) |  |  | (1.3) |
Balance — December 31 | $ | 54.8 |  |  | $ | 40.6 |  |  | $ | 41.2 |
The amount of gross unrecognized tax benefits at December 31, 2020, was $73.4 million, which includes $18.6 million of accrued interest and penalties. Of this amount $62.3 million, if recognized, would favorably impact our effective tax rate. With limited exception, we are no longer subject to U.S. federal income tax audits for years through 2017, state and local income tax audits for years through 2014 or foreign income tax audits for years through 2013. We are currently under examination for various years in Canada, Germany, India, Indonesia, Italy, Mexico, the Netherlands, Philippines, Saudi Arabia, the U.S., and Venezuela. It is reasonably possible that within the next 12 months the effective tax rate will be impacted by the resolution of some or all of the matters audited by various taxing authorities. It is also reasonably possible that we will have the statute of limitations close in various taxing jurisdictions within the next 12 months. As such, we estimate we could record a reduction in our tax expense up to approximatel y $8 million w ithin the next 12 months.

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 -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI http://asc.fasb.org/extlink&oid=116825942&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI http://asc.fasb.org/extlink&oid=116825942&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration