XML 32 R13.htm IDEA: XBRL DOCUMENT
v3.22.0.1

INCOME TAXES | 12 Months Ended
--- | ---
Dec. 31, 2021
Income Tax Disclosure [Abstract] |
INCOME TAXES | INCOME TAXES The components of income (loss) from continuing operations before income taxes are as follows (in millions):
|  | Year Ended December 31,
|  | 2021 |  | 2020 |  | 2019
United States |  | $ | (16.7) |  |  | $ | (148.8) |  |  | $ | (32.4) |
Foreign |  | 280.5 |  |  | 159.8 |  |  | 279.9 |
Income (loss) from continuing operations before income taxes |  | $ | 263.8 |  |  | $ | 11.0 |  |  | $ | 247.5 |
The Company recorded Income (loss) from discontinued operations and Gain (loss) on disposition of discontinued operations before income taxes of $2.6 million, $(28.9) million and $(175.8) million for the years ended December 31, 2021, 2020 and 2019, respectively. The major components of the Company’s provision for (benefit from) income taxes on continuing operations before income taxes are summarized below (in millions):
|  | Year Ended December 31,
|  | 2021 |  | 2020 |  | 2019
Current: |  |  |  |  |  |
Federal |  | $ | 6.6 |  |  | $ | (27.1) |  |  | $ | 14.7 |
State |  | 1.8 |  |  | 2.3 |  |  | 1.2 |
Foreign |  | 36.7 |  |  | 21.3 |  |  | 38.1 |
Current income tax provision (benefit) |  | 45.1 |  |  | (3.5) |  |  | 54.0 |
Deferred: |  |  |  |  |  |
Federal |  | (3.8) |  |  | 1.2 |  |  | (14.9) |
State |  | 1.5 |  |  | 4.3 |  |  | (3.3) |
Foreign |  | 3.5 |  |  | — |  |  | 2.0 |
Deferred income tax (benefit) provision |  | 1.2 |  |  | 5.5 |  |  | (16.2) |
Provision for (benefit from) income taxes |  | $ | 46.3 |  |  | $ | 2.0 |  |  | $ | 37.8 |
The elimination of tax from intercompany transactions is included in current tax expense. The Company recorded Provision for (benefit from) income taxes of $(0.8) million, $(9.3) million and $(20.5) million from discontinued operations and on disposition of discontinued operations for the years ended December 31, 2021, 2020 and 2019, respectively. In January 2018, the FASB released guidance on the accounting for tax on Global Intangible Low-taxed Income (“GILTI”). The guidance indicates that either accounting for deferred taxes related to GILTI or treating any taxes on GILTI as period costs are both acceptable accounting policy elections. Terex elected to treat taxes on GILTI inclusions as period costs. Deferred tax assets and liabilities result from differences in the bases of assets and liabilities for tax and financial reporting purposes. The tax effects of the basis differences and loss carry forwards as of December 31, 2021 and 2020 for continuing operations are summarized below for major balance sheet captions (in millions):
|  | 2021 |  | 2020
Property, plant and equipment |  | $ | (16.1) |  |  | $ | (18.1) |
Intangibles |  | (6.8) |  |  | (6.1) |
Inventories |  | 6.7 |  |  | 6.1 |
Accrued warranties and product liability |  | 10.8 |  |  | 12.5 |
Loss carry forwards |  | 184.4 |  |  | 204.4 |
Retirement plans |  | 11.3 |  |  | 14.0 |
Accrued compensation and benefits |  | 15.8 |  |  | 16.8 |
Operating lease ROU asset |  | (23.5) |  |  | (26.1) |
Operating lease liability |  | 23.8 |  |  | 27.0 |
Other |  | 24.1 |  |  | 18.5 |
Deferred tax assets valuation allowance |  | (100.0) |  |  | (112.1) |
Net deferred tax assets (liabilities) |  | $ | 130.5 |  |  | $ | 136.9 |
Deferred tax assets were $233.0 million before valuation allowances of $100.0 million, resulting in $133.0 million of net deferred tax assets which are partially offset by deferred tax liabilities of $2.5 million at December 31, 2021. Deferred tax assets for continuing operations were $251.6 million ($0.1 million for discontinued operations) before valuation allowances of $112.1 million, resulting in $139.5 million of net deferred tax assets which are partially offset by deferred tax liabilities for continuing operations of $2.6 million at December 31, 2020. There were no deferred tax liabilities for discontinued operations at December 31, 2021 and 2020. The Company evaluates the net realizable value of its deferred tax assets each reporting period. The Company must consider all objective evidence, both positive and negative, in evaluating the future realization of its deferred tax assets, including tax loss carry forwards. Available evidence, including historical information is supplemented by currently obtainable information about future tax years. Realization of deferred tax assets requires sufficient taxable income of the appropriate character. To the extent estimates of future taxable income decrease or do not materialize, additional valuation allowances may be required. The Company records a valuation allowance for each deferred tax asset for which realization is not assessed as more likely than not. The valuation allowance for deferred tax assets as of December 31, 2021 and 2020 was $100.0 million and $112.1 million, respectively. The net change in the total valuation allowance for the years ended December 31, 2021 and 2020 was a decrease of $12.1 million and an increase of $5.1 million, respectively. The Company’s Provision for (benefit from) income taxes is different from the amount that would be provided by applying the statutory federal income tax rate to the Company’s Income (loss) from continuing operations before income taxes. The reasons for the difference are summarized as follows (in millions):
|  | Year Ended December 31, |
|  | 2021 |  | 2020 |  | 2019 |
Tax at statutory federal income tax rate |  | $ | 55.4 |  |  | $ | 2.3 |  |  | $ | 51.9 |  |
State taxes |  | 2.7 |  |  | 5.2 |  |  | (1.7) |  |
Change in valuation allowance |  | (9.0) |  |  | — |  |  | (4.9) |  |
Foreign tax differential on income/losses of foreign subsidiaries |  | (12.0) |  |  | (13.0) |  |  | (14.5) |  |
U.S. tax on multi-national operations |  | 8.1 |  |  | 17.6 |  |  | 7.2 |  |
Change in foreign tax rates |  | (0.6) |  |  | 0.7 |  |  | 3.7 |  |
U.S. tax legislation |  | — |  |  | (10.9) |  |  | — |  |
Research and development |  | (0.8) |  |  | (1.2) |  |  | (2.0) |  |
Provision to return adjustments |  | 0.5 |  |  | (1.7) |  |  | (2.4) |  |
Compensation |  | 1.8 |  |  | 3.1 |  |  | 1.1 |  |
Other |  | 0.2 |  |  | (0.1) |  |  | (0.6) |  |
Provision for (benefit from) income taxes |  | $ | 46.3 |  |  | $ | 2.0 |  |  | $ | 37.8 |  |
The Company does not provide for foreign income and withholding, U.S. Federal, or state income taxes or tax benefits on the financial reporting basis over the tax basis of its investments in foreign subsidiaries to the extent such amounts are indefinitely reinvested to support operations and continued growth plans outside the U.S. The Company reviews its plan to indefinitely reinvest on a quarterly basis. In making its decision to indefinitely reinvest, the Company evaluates its plans of reinvestment, its ability to control repatriation and to mobilize funds without triggering basis differences, and the profitability of U.S. operations and their cash requirements and the need, if any, to repatriate funds. If the assessment of the Company with respect to earnings of non-U.S. subsidiaries changes, deferred taxes for foreign income taxes and withholding, U.S. Federal or state income taxes or tax benefits may have to be accrued. The Company considers foreign earnings that have been taxed in the U.S. or have qualified for the high-tax exception to taxation to not be indefinitely reinvested. The Company has recorded foreign, federal and state tax expense with respect to earnings which have been subject to federal income tax and which are no longer indefinitely reinvested. The Company plans to indefinitely reinvest all undistributed foreign earnings in excess of those previously taxed in the U.S. For the year ended December 31, 2021, the Company’s estimate of its remaining unremitted earnings of its foreign subsidiary ownership chains that have positive retained earnings and have not been subject to tax in the U.S. was approximately $103 million. At this time, determination of the unrecognized deferred tax liabilities for temporary differences related to the Company’s investment in non-U.S. subsidiaries is not practicable. At December 31, 2021, the Company has various state net operating loss carry forwards available to reduce future state taxable income and income taxes, the majority of which will expire at various dates through 2041. The Company also has approximately $599 million of foreign loss carry forwards, consisting of $278 million in Germany, $168 million in Italy, $54 million in China, $31 million in India, and $68 million in other countries, which are available to offset future taxable income. The majority of these tax loss carry forwards are available without expiration. In addition, the gross amount of the Australian capital loss carryforward is $23 million, and it has an unlimited carryforward period. The Company made total net income tax payments including discontinued operations of $28.4 million, $26.3 million and $46.8 million in 2021, 2020 and 2019, respectively. At December 31, 2021 and 2020, Other current assets included net income tax receivable amounts of $52.4 million and $56.2 million, respectively. The Company and its subsidiaries conduct business globally and file income tax returns in U.S. Federal, state and foreign jurisdictions, as required. From a tax perspective, major jurisdictions where the Company is often subject to examination by tax authorities include Germany, Italy, the United Kingdom (“U.K.”), China, India and the U.S. Currently, various entities of the Company are under audit in Italy, India and elsewhere. With limited exceptions, the statute of limitations for the Company and most of its subsidiaries has expired for tax years prior to 2016. The Company assesses uncertain tax positions for recognition, measurement and effective settlement. Where the Company has determined that its tax return filing position does not satisfy the more likely than not recognition threshold of ASC 740, “Income Taxes,” it has recorded no tax benefits. Where the Company has determined that its tax return filing positions are more likely than not to be sustained, the Company has measured and recorded the largest amount of tax benefit greater than 50% likely to be realized. The Company recognizes accrued interest and penalties, if any, related to income taxes as (Provision for) benefit from income taxes in its Consolidated Statement of Income (Loss). The following table summarizes the activity related to the Company’s unrecognized tax benefits (in millions).
Balance as of January 1, 2019 | $ | 13.5 |
Additions for current year tax positions | — |
Additions for prior year tax positions | 2.0 |
Reductions for prior year tax positions | (0.4) |
Reductions for current year tax positions | — |
Reductions for expiration of statute of limitations | (0.8) |
Settlements | — |
Balance as of December 31, 2019 | 14.3 |
Additions for current year tax positions | — |
Additions for prior year tax positions | 9.2 |
Reductions for prior year tax positions | (3.7) |
Reductions for current year tax positions | — |
Reductions for expiration of statute of limitations | — |
Settlements | (1.3) |
Balance as of December 31, 2020 | 18.5 |
Additions for current year tax positions | — |
Additions for prior year tax positions | 0.6 |
Reductions for prior year tax positions | (0.1) |
Reductions for current year tax positions | — |
Reductions for expiration of statute of limitations | (0.9) |
Settlements | (15.5) |
Balance as of December 31, 2021 | $ | 2.6 |
The Company evaluates each reporting period whether it is reasonably possible material changes to its uncertain tax position liability could occur in the next 12 months. Changes may occur as a result of uncertain tax positions being considered effectively settled, re-measured, paid, acquired or divested, as a result of a change in tax law or judicial decision, or due to expiration of the relevant statute of limitations. It is not possible to predict which uncertain tax positions, if any, may be challenged by tax authorities. Timing and impact of income tax audits and their resolution is uncertain. New facts, laws, pronouncements and judicial decisions can change assessments concerning technical merit and measurement. The amounts of or periods in which changes to reserves for uncertain tax positions will occur is difficult to predict. The Company does not expect the amount of unrecognized tax benefits disclosed as of December 31, 2021 will change materially in 2022. As of December 31, 2021 and 2020, the Company had $2.6 million and $18.5 million, respectively, of unrecognized tax benefits. Of the $2.6 million at December 31, 2021, $2.0 million, if recognized, would affect the effective tax rate. Potential interest and penalties were a receivable of $0.2 million and a liability of $1.4 million as of December 31, 2021 and 2020, respectively. During the years ended December 31, 2021 and 2020, the Company recognized total tax (benefit) expense of $(1.5) million and $0.2 million for interest and penalties, respectively.

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=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 http://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 http://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 http://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 http://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 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 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 http://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