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Note 16 - Income Taxes | 12 Months Ended
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Dec. 31, 2024
Notes to Financial Statements |
Income Tax Disclosure [Text Block] | Note 16. Income Taxes Income tax expense —
|  | 2024 |  |  | 2023 |  |  | 2022 |
Current |  |  |  |  |  |  |  |  |  |  |  |
U.S. federal and state |  | $ | 16 |  |  | $ | 38 |  |  | $ | 19 |
Non-U.S. |  |  | 152 |  |  |  | 187 |  |  |  | 112 |
Total current |  |  | 168 |  |  |  | 225 |  |  |  | 131 |
Deferred |  |  |  |  |  |  |  |  |  |  |  |
U.S. federal and state |  |  | (37 | ) |  |  | (94 | ) |  |  | 160 |
Non-U.S. |  |  | 8 |  |  |  | (10 | ) |  |  | (7 | )
Total deferred |  |  | (29 | ) |  |  | (104 | ) |  |  | 153 |
Total expense |  | $ | 139 |  |  | $ | 121 |  |  | $ | 284 |
We record interest and penalties related to uncertain tax positions as a component of income tax expense or benefit. Net interest expense for the periods presented herein is not significant. Income before income taxes —
|  | 2024 |  |  | 2023 |  |  | 2022 |
U.S. operations |  | $ | (312 | ) |  | $ | (246 | ) |  | $ | (343 | )
Non-U.S. operations |  |  | 392 |  |  |  | 424 |  |  |  | 312 |
Earnings (loss) before income taxes |  | $ | 80 |  |  | $ | 178 |  |  | $ | (31 | )
Income tax audits — We conduct business globally and, as a result, file income tax returns in multiple jurisdictions that are subject to examination by taxing authorities throughout the world. With few exceptions, we are no longer subject to U.S. federal, state and local or foreign income tax examinations for years before 2008. We are currently under audit by U.S. and foreign authorities for certain taxation years. When the issues related to these periods are settled, the total amounts of unrecognized tax benefits for all open tax years may be modified. Audit outcomes and the timing of the audit settlements are subject to uncertainty and we cannot make an estimate of the impact on our financial position at this time. GILTI Policy Elections — The SEC staff has indicated that a company should make and disclose certain policy elections related to accounting for global intangible low-taxed income (GILTI). As to whether we will recognize deferred taxes for basis differences expected to reverse as GILTI or account for the effect of GILTI as a period cost when incurred, we intend to account for the tax effect of GILTI as a period cost. As to the realizability of the tax benefit provided by net operating losses, we are electing to utilize the tax law ordering approach. Recent macroeconomic factors have resulted in losses in the United States. A valuation allowance has been provided for deferred tax assets where GILTI is not a source of income; however, the GILTI tax law ordering approach provides positive evidence for certain other deferred tax assets without a valuation allowance. Foreign income repatriation — We continue to analyze and adjust the estimated impact of the non-U.S. income and withholding tax liabilities based on the amount and source of these earnings, as well as the expected means through which those earnings may be taxed. We recognized net expense of $18 in 2024, $7 in 2023 and net benefit of $1 in 2022, related to future income taxes and non-U.S. withholding taxes on repatriations from operations that are not permanently reinvested. We also paid withholding taxes of $12, $12 and $6 during 2024, 2023 and 2022 related to the actual transfer of funds to the U.S. The unrecognized tax liability associated with the operations in which we are permanently reinvested is $47 at December 31, 2024. Effective tax rate reconciliation —
|  | 2024 |  |  | 2023 |  |  | 2022 |
|  | $ |  |  | % |  |  | $ |  |  | % |  |  | $ |  |  | % |
U.S. federal income tax rate |  |  | 16 |  |  |  | 21 |  |  |  | 37 |  |  |  | 21 |  |  |  | (7 | ) |  |  | 21 |
Adjustments resulting from: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
State and local income taxes, net of federal benefit |  |  | 1 |  |  |  | 1 |  |  |  | (5 | ) |  |  | (3 | ) |  |  | (6 | ) |  |  | 19 |
Non-U.S. income / expense |  |  | 16 |  |  |  | 20 |  |  |  | 35 |  |  |  | 20 |  |  |  | (2 | ) |  |  | 7 |
Credits and tax incentives |  |  | 13 |  |  |  | 16 |  |  |  | 9 |  |  |  | 5 |  |  |  | (27 | ) |  |  | 87 |
U.S. tax and withholding tax on non-US earnings |  |  | 41 |  |  |  | 51 |  |  |  | 41 |  |  |  | 23 |  |  |  | 42 |  |  |  | (135 | )
Intercompany sale of certain operating assets |  |  |  |  |  |  |  |  |  |  | (54 | ) |  |  | (30 | ) |  |  | (1 | ) |  |  | 3 |
Settlement and return adjustments |  |  | 4 |  |  |  | 5 |  |  |  | 23 |  |  |  | 13 |  |  |  | (7 | ) |  |  | 23 |
Enacted change in tax rates |  |  | 3 |  |  |  | 4 |  |  |  |  |  |  |  |  |  |  |  | (4 | ) |  |  | 13 |
Goodwill impairment |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 47 |  |  |  | (151 | )
Miscellaneous items |  |  | 3 |  |  |  | 3 |  |  |  | 7 |  |  |  | 4 |  |  |  | (6 | ) |  |  | 19 |
Valuation allowance adjustments |  |  | 42 |  |  |  | 53 |  |  |  | 28 |  |  |  | 15 |  |  |  | 255 |  |  |  | (822 | )
Effective income tax rate |  |  | 139 |  |  |  | 174 |  |  |  | 121 |  |  |  | 68 |  |  |  | 284 |  |  |  | (916 | )
During 2024, we recorded tax expense of $22 for valuation allowances related to foreign jurisdictions and tax expense of $11 due to revisions in our assertions on unremitted earnings in foreign jurisdictions. During 2023, we recorded tax expense of $19 for income tax reserves associated with prior tax years in foreign jurisdictions. In addition, we recorded net benefit of $55 on the intercompany sale of intangible assets to the U.S. During 2022, we recognized tax expense of $240 to record valuation allowance in the U.S., which includes $189 on U.S. federal credits and attributes and $51 related to U.S. state attributes. In addition, we recorded a tax benefit of $32 to adjust U.S. tax credits. A pre-tax goodwill impairment charge of $191 with an associated income tax benefit of $2 was also recorded. Deferred tax assets and liabilities — Temporary differences and carryforwards give rise to the following deferred tax assets and liabilities.
|  | 2024 |  |  | 2023 |
Net operating loss carryforwards |  | $ | 272 |  |  | $ | 218 |
Postretirement benefits, including pensions |  |  | 53 |  |  |  | 65 |
Research and development costs |  |  | 269 |  |  |  | 238 |
Expense accruals |  |  | 104 |  |  |  | 65 |
Other tax credits recoverable |  |  | 209 |  |  |  | 217 |
Capital loss carryforwards |  |  | 43 |  |  |  | 53 |
Inventory reserves |  |  | 44 |  |  |  | 37 |
Postemployment and other benefits |  |  | 4 |  |  |  | 5 |
Intangibles |  |  | 50 |  |  |  | 56 |
Leasing activities |  |  | 86 |  |  |  | 77 |
Other |  |  | 110 |  |  |  | 75 |
Total |  |  | 1,244 |  |  |  | 1,106 |
Valuation allowances |  |  | (667 | ) |  |  | (550 | )
Deferred tax assets |  |  | 577 |  |  |  | 556 |
Unremitted earnings |  |  | (35 | ) |  |  | (16 | )
Depreciation |  |  | (36 | ) |  |  | (58 | )
Deferred tax liabilities |  |  | (71 | ) |  |  | (74 | )
Net deferred tax assets |  | $ | 506 |  |  | $ | 482 |
We have generated deferred tax assets in foreign jurisdictions where realization of the future economic benefits were, in previous reporting periods, considered so remote that the benefits were not recognized. As of December 31, 2023 the unrecognized deferred tax asset was $88. In 2024, we concluded that the future economic benefits of the tax assets are no longer remote and therefore, deferred tax assets of $96 were recognized as of December 31, 2024. We also concluded that it is not more likely than not that the tax benefits associated with the deferred tax assets will be realized; therefore, offsetting valuation allowances were recognized. Carryforwards — Our deferred tax assets include benefits expected from the utilization of net operating loss (NOL), capital loss and credit carryforwards in the future. The following table identifies the net operating loss deferred tax asset components and the related allowances that existed at December 31, 2024. Due to time limitations on the ability to realize the benefit of the carryforwards, additional portions of these deferred tax assets may become unrealizable in the future.
|  | Deferred |  |  |  |  |  |  |  |  |  | Earliest |
|  | Tax |  |  | Valuation |  |  | Carryforward |  |  | Year of |
|  | Asset |  |  | Allowance |  |  | Period |  |  | Expiration |
Net operating losses |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. state |  | $ | 51 |  |  | $ | (51 | ) |  | Various |  |  | 2025 |
Brazil |  |  | 10 |  |  |  | (4 | ) |  | Unlimited |  |  |  |
France |  |  | 5 |  |  |  | (5 | ) |  | Unlimited |  |  |  |
Australia |  |  | 14 |  |  |  |  |  |  | Unlimited |  |  |  |
Italy |  |  | 19 |  |  |  | (19 | ) |  | Unlimited |  |  |  |
Germany |  |  | 4 |  |  |  | (4 | ) |  | Unlimited |  |  |  |
Sweden |  |  | 8 |  |  |  | (8 | ) |  | Unlimited |  |  |  |
South Africa |  |  | 7 |  |  |  | (7 | ) |  | Unlimited |  |  |  |
U.K. |  |  | 21 |  |  |  | (21 | ) |  | Unlimited |  |  |  |
Luxembourg |  |  | 68 |  |  |  | (68 | ) |  | Various |  |  | 2035 |
Canada |  |  | 64 |  |  |  | (58 | ) |  | 20 |  |  | 2027 |
China |  |  | 1 |  |  |  | (1 | ) |  | 5 |  |  | 2026 |
Total |  | $ | 272 |  |  | $ | (246 | ) |  |  |  |  |  |
In addition to the NOL carryforwards listed in the table above, we have deferred tax assets related to capital loss carryforwards of $43 which are fully offset with valuation allowances at December 31, 2024. We also have deferred tax assets of $219 related to other credit carryforwards which are largely offset with valuation allowances of $207 at December 31, 2024. The capital losses can generally be carried forward indefinitely while the other credits are generally available for 10 to 20 years. Unrecognized tax benefits — Unrecognized tax benefits are the difference between a tax position taken, or expected to be taken, in a tax return and the benefit recognized for accounting purposes. Interest income or expense, as well as penalties relating to income tax audit adjustments and settlements, are recognized as components of income tax expense or benefit. Interest of $20 and $21 was accrued on the uncertain tax positions at December 31, 2024 and 2023. Reconciliation of gross unrecognized tax benefits —
|  | 2024 |  |  | 2023 |  |  | 2022 |
Balance, beginning of period |  | $ | 112 |  |  | $ | 102 |  |  | $ | 126 |
Decrease related to expiration of statute of limitations |  |  | (7 | ) |  |  | (8 | ) |  |  | (6 | )
Decrease related to prior years tax positions |  |  | (6 | ) |  |  | (5 | ) |  |  | (43 | )
Decrease related to settlements |  |  | (4 | ) |  |  |  |  |  |  |  |
Increase related to prior years tax positions |  |  | 4 |  |  |  | 5 |  |  |  | 7 |
Increase related to current year tax positions |  |  | 13 |  |  |  | 18 |  |  |  | 18 |
Balance, end of period |  | $ | 112 |  |  | $ | 112 |  |  | $ | 102 |
We anticipate that the change in our gross unrecognized tax benefits will not be significant in the next twelve months as a result of examinations in various jurisdictions. The settlement of these matters will not impact the effective tax rate. Gross unrecognized tax benefits of $85 would impact the effective tax rate if recognized. If other open matters are settled with the IRS or other taxing jurisdictions, the total amounts of unrecognized tax benefits for open tax years may be modified.

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