XML 33 R18.htm IDEA: XBRL DOCUMENT
v3.22.4

Income Taxes | 12 Months Ended
--- | ---
Dec. 31, 2022
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes Provision for Income Taxes Our income before taxes is as follows:
(in millions) For year ended December 31, |  | 2022 |  | 2021 |  | 2020
U.S. operations |  | $ | 133.6 |  |  | $ | 342.1 |  |  | $ | 124.9 |
Non-U.S. operations |  | 429.4 |  |  | 160.7 |  |  | 99.6 |
Total |  | $ | 563.0 |  |  | $ | 502.8 |  |  | $ | 224.5 |
Our provision (benefit) for income taxes consists of:
(in millions) For the year ended December 31, |  | 2022 |  | 2021 |  | 2020
Current: |  |  |  |  |  |
U.S. federal tax |  | $ | 80.7 |  |  | $ | 39.0 |  |  | $ | 11.3 |
U.S. state and local tax |  | 8.4 |  |  | 3.7 |  |  | 1.6 |
Non-U.S. tax |  | 90.4 |  |  | 34.2 |  |  | 12.4 |
Total current |  | 179.5 |  |  | 76.9 |  |  | 25.3 |
Deferred: |  |  |  |  |  |
U.S. federal tax |  | 9.2 |  |  | (8.2) |  |  | 16.5 |
U.S. state and local tax |  | (13.7) |  |  | (1.9) |  |  | (0.1) |
Non-U.S. tax |  | (13.1) |  |  | 0.6 |  |  | 1.7 |
Total deferred |  | (17.6) |  |  | (9.5) |  |  | 18.1 |
Total provision for income taxes * |  | $ | 161.9 |  |  | $ | 67.4 |  |  | $ | 43.4 |
* Included in the above amounts are excess tax benefits from share-based compensation of $3.0 million $5.5 million and $0.6 million in 2022, 2021 and 2020, respectively, which were reflected as reductions in our provision for income taxes in 2022, 2021 and 2020. A reconciliation of the statutory U.S. federal tax rate to our effective tax rate is as follows:
For the year ended December 31, |  | 2022 |  | 2021 |  | 2020
Statutory U.S. federal tax rate |  | 21.0 | % |  | 21.0 | % |  | 21.0 | %
Increase (reduction) from: |  |  |  |  |  |
Income taxed at non-U.S. rates |  | (2.3) | % |  | 0.2 | % |  | (3.1) | %
Non-U.S. income inclusion, net of tax credits |  | 2.0 | % |  | (1.5) | % |  | 2.3 | %
State and local taxes, net of federal benefit |  | (1.1) | % |  | 0.2 | % |  | 0.5 | %
U.S. research and development tax credit |  | (0.8) | % |  | (0.5) | % |  | (2.3) | %
U.S. deduction for foreign - derived intangible income |  | (1.3) | % |  | (1.0) | % |  | (0.5) | %
Deferred tax asset related to the sale of a subsidiary |  | 3.7 | % |  | (4.1) | % |  | — | %
Nondeductible loss due to Asbestos Divestiture |  | 6.4 | % |  | — | % |  | — | %
Other |  | 1.2 | % |  | (0.9) | % |  | 1.4 | %
Effective tax rate |  | 28.8 | % |  | 13.4 | % |  | 19.3 | %
As of December 31, 2022, we have made the following determinations with regard to our non-U.S. earnings:
(in millions) |  | Permanently reinvested |  | Not permanently reinvested
Amount of earnings |  | $ | 425.5 |  |  | $ | 1,454.3 |
Associated tax |  | NA * |  | $ | 15.3 |
* Determination of U.S. income taxes and non-U.S. withholding taxes due upon repatriation of this $425.5 million of earnings is not practicable because the amount of such taxes depends upon circumstances existing in numerous taxing jurisdictions at the time the remittance occurs. Tax Related to Comprehensive Income During 2022, 2021 and 2020, tax provision (benefit) of $12.7 million, $29.9 million and $(13.5) million, respectively, related to changes in pension and post-retirement plan assets and benefit obligations, were recorded to accumulated other comprehensive loss. Deferred Taxes and Valuation Allowances The components of deferred tax assets and liabilities included in our Consolidated Balance Sheets are as follows:
(in millions) December 31, |  | 2022 |  | 2021
Deferred tax assets: |  |  |  |
Asbestos-related liabilities |  | $ | — |  |  | $ | 138.9 |
Tax loss and credit carryforwards |  | 97.7 |  |  | 111.2 |
Inventories |  | 31.9 |  |  | 29.3 |
Deferred tax asset related to the sale of a subsidiary |  | — |  |  | 20.6 |
Capitalized Research and Development |  | 17.8 |  |  | — |
Pension and Post Retirement Benefits |  | 8.4 |  |  | 24.1 |
Accrued Bonuses and Stock Based Compensation |  | 10.2 |  |  | 10.4 |
Other |  | 32.4 |  |  | 25.5 |
Total |  | $ | 198.4 |  |  | $ | 360.0 |
Less: valuation allowance |  | 99.7 |  |  | 141.5 |
Total deferred tax assets, net of valuation allowance |  | $ | 98.7 |  |  | $ | 218.5 |
Deferred tax liabilities: |  |  |  |
Basis difference in fixed assets |  | $ | (39.3) |  |  | $ | (47.4) |
Basis difference in intangible assets |  | (198.2) |  |  | (208.2) |
Deferred Tax on Non-U.S. Unremitted Earnings |  | (15.3) |  |  | (14.3) |
Other |  | — |  |  | (7.8) |
Total deferred tax liabilities |  | $ | (252.8) |  |  | $ | (277.7) |
Net deferred tax asset (liability) |  | $ | (154.1) |  |  | $ | (59.2) |
Balance sheet classification: |  |  |  |
Long-term deferred tax assets |  | 8.3 |  |  | 17.7 |
Long-term deferred tax liability |  | (162.4) |  |  | (76.9) |
Net deferred tax asset (liability) |  | $ | (154.1) |  |  | $ | (59.2) |
As of December 31, 2022, we had U.S. federal, U.S. state and non-U.S. tax loss and credit carryforwards that will expire, if unused, as follows:
(in millions) Year of expiration |  | U.S. Federal Tax Credits |  | U.S. Federal Tax Losses |  | U.S. State Tax Credits |  | U.S. State Tax Losses |  | Non- U.S. Tax Losses |  | Total
2023-2027 |  | $ | — |  |  | $ | — |  |  | $ | 2.7 |  |  | $ | 111.2 |  |  | $ | 4.2 |  |  |
After 2027 |  | 4.8 |  |  | 0.7 |  |  | 0.9 |  |  | 760.7 |  |  | 3.7 |  |  |
Indefinite |  | — |  |  | — |  |  | 20.8 |  |  | 10.5 |  |  | 117.5 |  |  |
Total tax carryforwards |  | $ | 4.8 |  |  | $ | 0.7 |  |  | $ | 24.4 |  |  | $ | 882.4 |  |  | $ | 125.4 |  |  |
Deferred tax asset on tax carryforwards |  | $ | 4.8 |  |  | $ | 0.1 |  |  | $ | 19.3 |  |  | $ | 44.2 |  |  | $ | 29.4 |  |  | $ | 97.8 |
Valuation allowance on tax carryforwards |  | (4.8) |  |  | (0.1) |  |  | (19.0) |  |  | (42.8) |  |  | (24.7) |  |  | (91.4) |
Net deferred tax asset on tax carryforwards |  | $ | — |  |  | $ | — |  |  | $ | 0.3 |  |  | $ | 1.4 |  |  | $ | 4.7 |  |  | $ | 6.4 |
As of December 31, 2022 and 2021, we determined that it was more likely than not that $91.4 million and $106.4 million, respectively, of our deferred tax assets related to tax loss and credit carryforwards will not be realized. As a result, we recorded a valuation allowance against these deferred tax assets. We also determined that it is more likely than not that a portion of the benefit related to U.S. state and non-U.S. deferred tax assets other than tax loss and credit carryforwards will not be realized. Accordingly, as of December 31, 2022 and 2021, a valuation allowance of $8.3 million and $35.1 million, respectively, was established against these U.S. state and non-U.S. deferred tax assets. Our total valuation allowance as of December 31, 2022 and 2021 was $99.7 million and $141.5 million, respectively. Unrecognized Tax Benefits A reconciliation of the beginning and ending amount of our gross unrecognized tax benefits, excluding interest and penalties, is as follows:
(in millions) |  | 2022 |  | 2021 |  | 2020
Balance of liability as of January 1, |  | $ | 31.6 |  |  | $ | 34.0 |  |  | $ | 39.8 |
Increase as a result of tax positions taken during a prior year |  | — |  |  | 0.7 |  |  | 5.4 |
Decrease as a result of tax positions taken during a prior year |  | (0.6) |  |  | (0.3) |  |  | (0.4) |
Increase as a result of tax positions taken during the current year |  | 3.1 |  |  | 2.6 |  |  | 1.8 |
Decrease as a result of settlements with taxing authorities |  | — |  |  | (0.8) |  |  | (2.5) |
Reduction as a result of a lapse of the statute of limitations |  | (5.9) |  |  | (4.6) |  |  | (10.1) |
Balance of liability as of December 31, |  | $ | 28.2 |  |  | $ | 31.6 |  |  | $ | 34.0 |
As of December 31, 2022, 2021 and 2020, the amount of our unrecognized tax benefits that, if recognized, would affect our effective tax rate was $30.3 million, $33.5 million and $32.6 million, respectively. The difference between these amounts and those reflected in the table above relates to (1) offsetting tax effects from other tax jurisdictions, and (2) interest expense, net of deferred taxes. We recognize interest and penalties related to unrecognized tax benefits as a component of our income tax expense. During the years ended December 31, 2022, 2021 and 2020, we recognized interest and penalty (income)/ expense of $(0.1) million, $(2.6) million and $0.5 million, respectively, in our Consolidated Statements of Operations. As of December 31, 2022 and 2021, we had accrued $4.8 million and $4.9 million, respectively, of interest and penalties related to unrecognized tax benefits on our Consolidated Balance Sheets. During the next twelve months, it is reasonably possible that our unrecognized tax benefits could change by $7.5 million due to settlements of income tax examinations, the expiration of statutes of limitations or other resolution of uncertainties. However, if the ultimate resolution of income tax examinations results in amounts that differ from this estimate, we will record additional income tax expense or benefit in the period in which such matters are effectively settled. Income Tax Examinations Our income tax returns are subject to examination by the U.S. federal, U.S. state and local, and non-U.S. tax authorities. With few exceptions, the years for which we filed returns that are open to examination are as follows:
Jurisdiction |  | Year
U.S. federal |  | 2019 - 2021
U.S. state and local |  | 2016 - 2021
Non-U.S. |  | 2016 - 2021
Currently, we and our subsidiaries are under examination in various jurisdictions, including Germany (2016 through 2019), Canada (2013 through 2018) and Luxembourg (2017 through 2018).

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 https://asc.fasb.org/extlink&oid=121826272&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 https://asc.fasb.org/extlink&oid=122134291&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 https://asc.fasb.org/extlink&oid=121826272&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 https://asc.fasb.org/extlink&oid=122134291&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 https://asc.fasb.org/extlink&oid=121826272&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 https://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 https://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 https://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration