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INCOME TAXES | 12 Months Ended
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Dec. 31, 2023
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,
|  | 2023 |  | 2022 |  | 2021
U.S. |  | $ | 89.3 |  |  | $ | (19.7) |  |  | $ | (16.7) |
Foreign |  | 490.4 |  |  | 386.3 |  |  | 280.5 |
Income (loss) from continuing operations before income taxes |  | $ | 579.7 |  |  | $ | 366.6 |  |  | $ | 263.8 |
The Company recorded Income (loss) from discontinued operations and Gain (loss) on disposition of discontinued operations before income taxes of $2.5 million, $(0.5) million and $2.6 million for the years ended December 31, 2023, 2022 and 2021, 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,
|  | 2023 |  | 2022 |  | 2021
Current: |  |  |  |  |  |
Federal |  | $ | 30.8 |  |  | $ | 6.9 |  |  | $ | 6.6 |
State |  | 4.4 |  |  | 1.3 |  |  | 1.8 |
Foreign |  | 65.9 |  |  | 58.8 |  |  | 36.7 |
Current income tax provision (benefit) |  | 101.1 |  |  | 67.0 |  |  | 45.1 |
Deferred: |  |  |  |  |  |
Federal |  | (4.4) |  |  | 6.9 |  |  | (3.8) |
State |  | (3.4) |  |  | 1.8 |  |  | 1.5 |
Foreign |  | (30.3) |  |  | (9.3) |  |  | 3.5 |
Deferred income tax (benefit) provision |  | (38.1) |  |  | (0.6) |  |  | 1.2 |
Provision for (benefit from) income taxes |  | $ | 63.0 |  |  | $ | 66.4 |  |  | $ | 46.3 |
The elimination of tax from intercompany transactions is included in current tax expense. The Company recorded Provision for (benefit from) income taxes of $1.3 million, $(0.3) million and $(0.8) million from discontinued operations and on disposition of discontinued operations for the years ended December 31, 2023, 2022 and 2021, 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, 2023 and 2022 for continuing operations are summarized below for major balance sheet captions (in millions):
|  | 2023 |  | 2022
Property, plant and equipment |  | $ | (23.3) |  |  | $ | (19.8) |
Intangibles |  | (8.4) |  |  | (8.1) |
Inventories |  | 5.6 |  |  | 5.9 |
Accrued warranties and product liability |  | 12.9 |  |  | 9.9 |
Loss carry forwards |  | 188.5 |  |  | 152.0 |
Retirement plans |  | 9.1 |  |  | 10.1 |
Accrued compensation and benefits |  | 18.9 |  |  | 17.1 |
Operating lease right-of-use asset |  | (28.4) |  |  | (22.0) |
Operating lease liability |  | 30.8 |  |  | 23.5 |
Other |  | 13.6 |  |  | 18.0 |
Deferred tax assets valuation allowance |  | (52.7) |  |  | (63.0) |
Net deferred tax assets (liabilities) |  | $ | 166.6 |  |  | $ | 123.6 |
Deferred tax assets were $227.4 million before valuation allowances of $52.7 million, resulting in $174.7 million of net deferred tax assets which are partially offset by deferred tax liabilities of $8.1 million at December 31, 2023. Deferred tax assets for continuing operations 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 for continuing operations of $4.3 million at December 31, 2022. The net change in the total valuation allowance for the years ended December 31, 2023 and 2022 was a decrease of $10.3 million and $37.0 million, respectively. There were no deferred tax liabilities for discontinued operations at December 31, 2023 and 2022. 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, |
|  | 2023 |  | 2022 |  | 2021 |
Tax at statutory U.S. federal income tax rate |  | $ | 121.7 |  |  | $ | 77.0 |  |  | $ | 55.4 |  |
State taxes |  | 0.8 |  |  | 2.4 |  |  | 2.7 |  |
Change in valuation allowance |  | (2.6) |  |  | (21.0) |  |  | (9.0) |  |
Foreign tax differential on income/losses of foreign subsidiaries |  | (25.7) |  |  | (10.2) |  |  | (12.0) |  |
U.S. tax on multi-national operations |  | 12.8 |  |  | 10.1 |  |  | 8.1 |  |
Change in foreign tax rates |  | 0.4 |  |  | — |  |  | (0.6) |  |
Swiss cantonal tax attribute |  | (42.3) |  |  | — |  |  | — |  |
Research and development |  | (1.7) |  |  | (1.0) |  |  | (0.8) |  |
Provision to return adjustments |  | (2.7) |  |  | 6.8 |  |  | 0.5 |  |
Compensation |  | 2.9 |  |  | 2.1 |  |  | 1.8 |  |
Other |  | (0.6) |  |  | 0.2 |  |  | 0.2 |  |
Provision for (benefit from) income taxes |  | $ | 63.0 |  |  | $ | 66.4 |  |  | $ | 46.3 |  |
The Company’s effective tax rate was 10.9%, 18.1% and 17.6% for the years ended December 31, 2023, 2022 and 2021, respectively. On December 15, 2022, the European Union (“EU”) Member States formally adopted the EU’s Pillar Two Directive, which generally provides for a minimum effective tax rate of 15% for large corporations, as established by the Organization for Economic Co-operation and Development (“OECD”) Pillar Two Framework. The OECD continues to release additional guidance on the two-pillar approach with widespread implementation anticipated by 2026. A number of countries in which we operate have adopted legislation, and other countries are in the process of introducing legislation. As a result, the Company is continuing to evaluate the potential impact on future periods of the Pillar Two Framework. In November 2023, the Company concluded discussions with the Swiss cantonal taxing authorities with respect to the availability of future tax deductions resulting in the Company meeting the recognition criteria to record a deferred tax asset of $42.3 million. The Company considers foreign earnings that have been taxed in the U.S. and certain earnings that have qualified for the high tax exception not to be indefinitely reinvested and thus, has accrued foreign income and withholding, U.S. federal and state tax expense with respect to such earnings. The Company plans to indefinitely reinvest all undistributed foreign earnings in excess of those previously taxed in the U.S. which is approximately $118 million for the year ended December 31, 2023. 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, 2023, the Company has a state net operating loss carry forward deferred tax assets of $39 million available to reduce future taxable income and income taxes in various states, substantially all of which is offset by valuation allowances and the majority will expire at various dates through 2043. The Company has approximately $459 million of foreign operating loss carry forwards. The following operating loss carry forwards do not expire: $221 million in Germany, $160 million in Italy and $28 million in Spain. The remaining operating loss carry forwards of $50 million are partially offset by valuation allowances and the majority do not expire. Also, the Company has an Indian capital loss carry forward of $22 million expiring before 2028 and an Australian capital loss carry forward of $14 million which does not expire; both are offset by valuation allowances. The company does not have any material tax credit carry forwards. The Company made total net income tax payments of $86.0 million, $20.4 million and $28.4 million in 2023, 2022 and 2021, respectively. At December 31, 2023 and 2022, Other current assets included net income tax receivable amounts of $11.1 million and $14.7 million, respectively. The following table summarizes the activity related to the Company’s unrecognized tax benefits (in millions).
Balance as of January 1, 2021 | $ | 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 |
Additions for current year tax positions | 0.1 |
Additions for prior year tax positions | 5.6 |
Reductions for prior year tax positions | (1.6) |
Reductions for current year tax positions | — |
Reductions for expiration of statute of limitations | (0.2) |
Settlements | — |
Balance as of December 31, 2023 | $ | 6.4 |
The Company files income tax returns, including returns for its subsidiaries, with federal, state, local and foreign taxing jurisdictions. The following tax years as described below remain subject to examination by the respective major tax jurisdictions. The Company does not expect the amount of unrecognized tax benefits disclosed as of December 31, 2023 to significantly change within the next twelve months.
Major Tax Jurisdiction | Open Tax Years
Australia | 2016 - present
China | 2013 - present
Germany | 2017 - present
India | 2005-2010, 2012, 2015-2016, 2018 - present
Italy | 2004-2005, 2009-2010, 2014, 2017 - present
Switzerland | 2020 - present
United Kingdom | 2019 - present
United States - federal | 2017 - present
United States - states | 2017 - present
As of December 31, 2023 and 2022, the Company had $6.4 million and $2.5 million, respectively, of unrecognized tax benefits. Of the $6.4 million at December 31, 2023, $5.2 million, if recognized, would affect the effective tax rate. Potential interest and penalties were a liability of $1.4 million and $0.3 million as of December 31, 2023 and 2022, respectively. During the years ended December 31, 2023 and 2022, the Company recognized total tax expense of $1.0 million and $0.1 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 -Topic 946 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 13 -Publisher FASB -URI https://asc.fasb.org//1943274/2147480990/946-20-50-13 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 235 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//740/tableOfContent Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 14 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-14 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-21 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 270 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482526/740-270-50-1 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 17 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-17 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479360/740-10-S99-1 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479360/740-10-S99-2 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 30 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482603/740-30-50-2 + Details
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