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INCOME TAXES | 12 Months Ended
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Dec. 31, 2022
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,
|  | 2022 |  | 2021 |  | 2020
U.S. |  | $ | (19.7) |  |  | $ | (16.7) |  |  | $ | (148.8) |
Foreign |  | 386.3 |  |  | 280.5 |  |  | 159.8 |
Income (loss) from continuing operations before income taxes |  | $ | 366.6 |  |  | $ | 263.8 |  |  | $ | 11.0 |
The Company recorded Income (loss) from discontinued operations and Gain (loss) on disposition of discontinued operations before income taxes of $(0.5) million, $2.6 million and $(28.9) million for the years ended December 31, 2022, 2021 and 2020, 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,
|  | 2022 |  | 2021 |  | 2020
Current: |  |  |  |  |  |
Federal |  | $ | 6.9 |  |  | $ | 6.6 |  |  | $ | (27.1) |
State |  | 1.3 |  |  | 1.8 |  |  | 2.3 |
Foreign |  | 58.8 |  |  | 36.7 |  |  | 21.3 |
Current income tax provision (benefit) |  | 67.0 |  |  | 45.1 |  |  | (3.5) |
Deferred: |  |  |  |  |  |
Federal |  | 6.9 |  |  | (3.8) |  |  | 1.2 |
State |  | 1.8 |  |  | 1.5 |  |  | 4.3 |
Foreign |  | (9.3) |  |  | 3.5 |  |  | — |
Deferred income tax (benefit) provision |  | (0.6) |  |  | 1.2 |  |  | 5.5 |
Provision for (benefit from) income taxes |  | $ | 66.4 |  |  | $ | 46.3 |  |  | $ | 2.0 |
The elimination of tax from intercompany transactions is included in current tax expense. The Company recorded Provision for (benefit from) income taxes of $(0.3) million, $(0.8) million and $(9.3) million from discontinued operations and on disposition of discontinued operations for the years ended December 31, 2022, 2021 and 2020, respectively. The tax effects of the basis differences between tax and financial reporting purposes for assets, liabilities and loss carry forwards as of December 31, 2022 and 2021 for continuing operations are summarized below for major balance sheet captions (in millions):
|  | 2022 |  | 2021
Property, plant and equipment |  | $ | (19.8) |  |  | $ | (16.1) |
Intangibles |  | (8.1) |  |  | (6.8) |
Inventories |  | 5.9 |  |  | 6.7 |
Accrued warranties and product liability |  | 9.9 |  |  | 10.8 |
Loss carry forwards |  | 152.0 |  |  | 184.4 |
Retirement plans |  | 10.1 |  |  | 11.3 |
Accrued compensation and benefits |  | 17.1 |  |  | 15.8 |
Operating lease right-of-use asset |  | (22.0) |  |  | (23.5) |
Operating lease liability |  | 23.5 |  |  | 23.8 |
Other |  | 18.0 |  |  | 24.1 |
Deferred tax assets valuation allowance |  | (63.0) |  |  | (100.0) |
Net deferred tax assets (liabilities) |  | $ | 123.6 |  |  | $ | 130.5 |
Deferred tax assets were $190.9 million before valuation allowances of $63.0 million, resulting in $127.9 million of net deferred tax assets which are partially offset by deferred tax liabilities of $4.3 million at December 31, 2022. Deferred tax assets for continuing operations 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 for continuing operations of $2.5 million at December 31, 2021. The net change in the total valuation allowance for the years ended December 31, 2022 and 2021 was a decrease of $37.0 million and $12.1 million, respectively. There were no deferred tax liabilities for discontinued operations at December 31, 2022 and 2021. As of December 31, 2022, the Company released the valuation allowance on its German interest expense deferred tax asset as the realization of the deferred tax asset is now more likely than not due to recent earnings history and expected future business performance resulting in a benefit from income taxes of $17.7 million. 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, |
|  | 2022 |  | 2021 |  | 2020 |
Tax at statutory federal income tax rate |  | $ | 77.0 |  |  | $ | 55.4 |  |  | $ | 2.3 |  |
State taxes |  | 2.4 |  |  | 2.7 |  |  | 5.2 |  |
Change in valuation allowance |  | (21.0) |  |  | (9.0) |  |  | — |  |
Foreign tax differential on income/losses of foreign subsidiaries |  | (10.2) |  |  | (12.0) |  |  | (13.0) |  |
U.S. tax on multi-national operations |  | 10.1 |  |  | 8.1 |  |  | 17.6 |  |
Change in foreign tax rates |  | — |  |  | (0.6) |  |  | 0.7 |  |
U.S. tax legislation |  | — |  |  | — |  |  | (10.9) |  |
Research and development |  | (1.0) |  |  | (0.8) |  |  | (1.2) |  |
Provision to return adjustments |  | 6.8 |  |  | 0.5 |  |  | (1.7) |  |
Compensation |  | 2.1 |  |  | 1.8 |  |  | 3.1 |  |
Other |  | 0.2 |  |  | 0.2 |  |  | (0.1) |  |
Provision for (benefit from) income taxes |  | $ | 66.4 |  |  | $ | 46.3 |  |  | $ | 2.0 |  |
The Company’s effective tax rate was 18.1%, 17.6% and 18.2% for the years ended December 31, 2022, 2021 and 2020, respectively. For the year ended December 31, 2022, 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 $108 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, 2022, the Company has a state net operating loss carry forward deferred tax assets of $44 million available to reduce future taxable income and income taxes in various states, substantially all of which is offset by valuation allowances and will expire at various dates through 2042. The Company has approximately $462 million of foreign operating loss carry forwards. These loss carry forwards include $234 million in Germany, $157 million in Italy and $27 million in Spain which do not expire. The remaining loss carry forwards of $44 million are partially offset by valuation allowances and the majority do not expire. Also, the Company has an Indian capital loss carry forward of $23 million expiring before 2028 and an Australian capital loss carry forward of $21 million which does not expire; both are offset by valuation allowances. The Company made total net income tax payments including discontinued operations of $20.4 million, $28.4 million and $26.3 million in 2022, 2021 and 2020, respectively. At December 31, 2022 and 2021, Other current assets included net income tax receivable amounts of $14.7 million and $52.4 million, respectively. The following table summarizes the activity related to the Company’s unrecognized tax benefits (in millions).
Balance as of January 1, 2020 | $ | 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 |
Additions for current year tax positions | — |
Additions for prior year tax positions | 1.8 |
Reductions for prior year tax positions | (1.9) |
Reductions for current year tax positions | — |
Reductions for expiration of statute of limitations | — |
Settlements | — |
Balance as of December 31, 2022 | $ | 2.5 |
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, U.S. and elsewhere. With limited exceptions, the statute of limitations for the Company and most of its subsidiaries has expired for tax years prior to 2017. The Company does not expect the amount of unrecognized tax benefits disclosed as of December 31, 2022 will change materially in 2023. As of December 31, 2022 and 2021, the Company had $2.5 million and $2.6 million, respectively, of unrecognized tax benefits. Of the $2.5 million at December 31, 2022, $1.7 million, if recognized, would affect the effective tax rate. Potential interest and penalties were a liability of $0.3 million and a receivable of $0.2 million as of December 31, 2022 and 2021, respectively. During the years ended December 31, 2022 and 2021, the Company recognized total tax (benefit) expense of $0.1 million and $(1.5) million for interest and penalties, respectively.

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- 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
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