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INCOME TAXES
 12 Months Ended
Dec. 31, 2022
Income Tax Disclosure [Abstract]  
INCOME TAXES INCOME TAXES
Income before income taxes and non-controlling interests was as follows:
Year Ended December 31,
  (dollars in millions)
202220212020
Domestic$125.0 $92.0 $(11.6)
Foreign147.0 159.7 92.7 
Total$272.0 $251.7 $81.1 
Income tax expense consisted of the following:
Year Ended December 31,
  (dollars in millions)
202220212020
Current:   
U.S.:   
Federal$0.6 $(3.9)$(0.8)
State and local1.8 2.9 1.3 
Foreign68.3 96.0 56.8 
Total current70.7 95.0 57.3 
Deferred:   
U.S.:   
Federal17.5 (1.8)(40.4)
State and local8.3 (30.3)1.1 
Foreign(10.7)(14.6)(13.7)
Total deferred15.1 (46.7)(53.0)
Income tax expense $85.8 $48.3 $4.3 
Income tax expense differed from the amounts computed by applying the U.S. federal statutory tax rate to pre-tax income, as a result of the following:
Year Ended December 31,
  (dollars in millions)
202220212020
U.S. federal statutory tax rate21 %21 %21 %
Taxes computed at U.S. statutory rate$57.1 $52.9 $17.0 
State income taxes, net of federal benefit4.6 5.7 2.1 
U.S. tax on foreign operations3.2 3.9 8.9 
Foreign tax on foreign operations13.0 17.0 7.0 
Change in valuation allowances6.4 (63.6)(4.2)
Tax on undistributed foreign earnings5.9 4.7 4.3 
Changes in uncertain tax positions0.2 29.4 8.2 
Changes to U.S. tax law— — (40.4)
Other, net(4.6)(1.7)1.4 
Income tax expense$85.8 $48.3 $4.3 
Effective tax rate32 %19 %5 %

The income tax expense of $85.8 million for the year ended December 31, 2022 includes current and deferred taxes based on jurisdictional earnings, withholding taxes, and the impact of U.S. global intangible low-taxed income ("GILTI") and subpart F income regimes.
The income tax expense of $48.3 million for the year ended December 31, 2021 included the impact of a $29.4 million increase to the Company's provision for uncertain tax positions, partially offset by a $63.6 million benefit associated with the release of valuation allowances. The release of valuation allowances related to amounts previously recorded against certain U.S. tax attribute carryforwards, which primarily corresponded to certain state net operating losses and interest. The valuation allowances were released as the Company expects improved profitability in its domestic business and a shift to a three-year cumulative income position.

On July 23, 2020, the U.S. Treasury Department released regulations relating to the treatment of income that is subject to a high rate of foreign tax under the U.S. GILTI and subpart F income regimes. On July 28, 2020, new regulations were released related to interest expense limitations. The Company evaluated the impact of these regulations on its Consolidated Financial Statements and during the year ended December 31, 2020 recorded a $40.4 million tax benefit from these regulations related to the 2018 and 2019 tax years producing an increase to the Company's net operating loss carryforwards.
The components of deferred income taxes at December 31, 2022 and 2021 were as follows:
December 31,
  (dollars in millions)
20222021
Deferred tax assets:  
Net operating losses$98.5 $121.7 
Interest carryforward39.4 65.3 
Capital loss carryforward54.2 54.0 
Tax credits32.2 34.5 
Employee benefits18.1 22.2 
Research and development costs28.0 25.1 
Accrued liabilities6.3 7.2 
Other49.6 34.3 
Total gross deferred tax assets326.3 364.3 
Valuation allowances(153.2)(151.4)
Total deferred tax assets173.1 212.9 
Deferred tax liabilities:
Intangible assets175.6 216.4 
Property, plant and equipment28.1 21.5 
Undistributed foreign earnings28.2 23.7 
Goodwill10.9 9.9 
Total deferred tax liabilities242.8 271.5 
Net deferred tax liability$69.7 $58.6 
The Company provides for income and withholding taxes on previously unremitted earnings of foreign subsidiaries. At December 31, 2022, the Company had accrued a deferred tax liability of $28.2 million of income and withholding taxes that would be due upon the distribution of such earnings from non-U.S. subsidiaries to the U.S.
The Company had historically considered approximately $130 million of undistributed earnings of foreign subsidiaries to be indefinitely reinvested, and accordingly, no deferred taxes were provided on the balance. In 2022, the Company’s plans and expectations around the use of cash in subsidiaries had shifted. As a result, the prior assertion was changed, and the Company is no longer asserting any of its available foreign earnings are permanently reinvested. The change resulted in a $1.7 million increase to income tax expense for the year ended December 31, 2022.
At December 31, 2022, the Company had federal, state and foreign net operating loss carryforwards of approximately $71.3 million, $565 million and $221 million, respectively. The U.S. federal net operating loss carryforwards expire between 2027 and 2037 or may be carried forward indefinitely. The majority of the state net operating loss carryforwards expire between 2023 and 2039. The foreign tax net operating loss carryforwards expire between 2023 through 2037 or may be carried forward indefinitely. In addition, at December 31, 2022, the Company had capital loss carryforwards, foreign tax credits, and other tax credits of approximately $226 million, $27.4 million and $4.9 million, respectively, available for carryforward. The capital loss
carryforwards expire in 2024. The carryforward periods of the remaining tax credits range from ten years to an unlimited period of time. If certain changes in the Company's ownership occur, there could be an annual limitation on the amount of utilizable carryforwards.
Uncertain Tax Positions
The following table summarizes the activity related to the Company’s unrecognized tax benefits:
Year Ended December 31,
  (dollars in millions)
202220212020
Unrecognized tax benefits at beginning of period$106.6 $82.5 $71.2 
Additions based upon prior year tax positions1.0 22.9 1.8 
Additions based on current year tax positions5.3 8.1 14.5 
Reductions for prior period positions(5.7)(4.9)(0.1)
Reductions for settlements and payments(1.7)(0.1)(1.1)
Reductions due to closed statutes(1.9)(1.0)(4.6)
Currency translation adjustment(3.8)(0.9)0.9 
Total unrecognized tax benefits at end of period$99.8 $106.6 $82.5 
At December 31, 2022, the Company had $99.8 million of total unrecognized tax benefits, all of which, if recognized, would impact the Company’s effective tax rate. Due to expected settlements and statute of limitations expirations, the Company estimates that $1.1 million of the total unrecognized benefits will reverse within the next twelve months.
The Company recognizes interest and/or penalties related to income tax matters as part of income tax expense (benefit), which totaled $1.1 million, $2.5 million and $(2.4) million, for 2022, 2021 and 2020, respectively. The Company's liability for interest and penalties totaled $10.7 million and $9.7 million at December 31, 2022 and 2021, respectively.
At December 31, 2022, the following tax years remained subject to examination by the major tax jurisdictions indicated below:
Major JurisdictionsOpen Years
China2017through current
Germany2017through current
Taiwan2018/19, 2021through current
United Kingdom2008, 2019through current
United States2019through current
The Company is currently undergoing tax examinations in several jurisdictions. Although the Company believes it has appropriately accrued for the expected outcome of uncertain tax matters and made reasonable provisions for taxes ultimately expected to be paid, tax liabilities may need to be adjusted as tax examinations continue to progress.