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Income Taxes | 12 Months Ended
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Dec. 31, 2022
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes Domestic and foreign components of Income (loss) before income taxes are shown below:
| Years Ended December 31,
In millions | 2022 |  | 2021 |  | 2020
Domestic | $ | 200.0 |  |  | $ | 107.4 |  |  | $ | 191.2 |
Foreign | 69.6 |  |  | 55.4 |  |  | 43.9 |
Income (loss) before income taxes | $ | 269.6 |  |  | $ | 162.8 |  |  | $ | 235.1 |
The provision (benefit) for income taxes consisted of:
| Years Ended December 31,
In millions | 2022 |  | 2021 |  | 2020
Current |  |  |  |  |
Federal | $ | 41.7 |  |  | $ | 31.1 |  |  | $ | 22.5 |
State and local | 6.3 |  |  | 2.7 |  |  | 5.1 |
Foreign | 15.0 |  |  | 15.5 |  |  | 9.9 |
Total current | $ | 63.0 |  |  | $ | 49.3 |  |  | $ | 37.5 |
Deferred |  |  |  |  |
Federal | $ | (4.6) |  |  | $ | (15.3) |  |  | $ | 15.3 |
State and local | (1.7) |  |  | (1.6) |  |  | (2.7) |
Foreign | 1.3 |  |  | 12.3 |  |  | 3.6 |
Total deferred | $ | (5.0) |  |  | $ | (4.6) |  |  | $ | 16.2 |
Provision (benefit) for income taxes | $ | 58.0 |  |  | $ | 44.7 |  |  | $ | 53.7 |
We recorded $4.5 million, $4.2 million, and $(4.3) million of deferred tax provision (benefit) expense within components of other comprehensive income during the years ended December 31, 2022, 2021, and 2020, respectively. The following table summarizes the major differences between taxes computed at the U.S. federal statutory rate and the actual income tax provision attributable to operations:
| Years Ended December 31,
In millions, except percentage data | 2022 |  | 2021 |  | 2020
Federal statutory tax rate | $ | 56.6 |  |  | $ | 34.2 |  |  | $ | 49.4 |
State and local income taxes, net of federal benefit | 5.6 |  |  | 2.4 |  |  | 5.1 |
Foreign income tax rate differential | 2.2 |  |  | 2.2 |  |  | 1.5 |
Changes in valuation allowance | 0.1 |  |  | 0.8 |  |  | (1.9) |
Deferred adjustments | 0.1 |  |  | 0.3 |  |  | (1.4) |
Legislative tax rate change | 0.8 |  |  | 13.9 |  |  | 5.3 |
Excess share-based compensation | (0.1) |  |  | (0.3) |  |  | 0.4 |
Federal and state tax credits | (4.8) |  |  | (4.9) |  |  | (4.0) |
Tax on dividends, deemed dividends, and GILTI | 2.7 |  |  | 0.1 |  |  | 0.1 |
Foreign derived intangible income | (6.2) |  |  | (5.1) |  |  | (3.1) |
Officers compensation | 0.6 |  |  | 0.3 |  |  | 0.5 |
Other | 0.4 |  |  | 0.8 |  |  | 1.8 |
Provision (benefit) for income taxes | $ | 58.0 |  |  | $ | 44.7 |  |  | $ | 53.7 |
Effective tax rate | 21.5 | % |  | 27.5 | % |  | 22.8 | %
The decrease in our effective tax rate from 2021 to 2022 was primarily driven by the recognition of the United Kingdom's ("UK") six percent legislative rate increase in 2021. During 2022, our effective tax rate benefited from reduced taxes at our China manufacturing plant associated with the purchases of our sustainably sourced raw material feedstock. This reduction was partially offset by an increase in foreign earnings deemed taxable in the U.S. mainly due to final U.S. foreign tax credit regulations modifying the definition of what foreign taxes qualify as creditable taxes, denying Brazilian taxes paid as qualifying taxes. The increase in our effective tax rate from 2020 to 2021 was driven by a six percent legislative tax rate increase in the UK. The impacts of this increase were partially offset by the benefit in excess share-based compensation driven by the rebound of stock prices in 2021 compared to 2020, as well as the increased benefit associated with our foreign derived intangible income ("FDII"). This increased benefit from FDII was driven by higher taxable income as a result of reduced capital spend and deferral of litigation expenses for tax purposes. Additionally, in depth research and development studies conducted, as well as amended state return filing, further increased the rate benefit associated with our federal and state credits in 2021, which also helped to partially offset the negative impacts of the UK rate change. The significant components of deferred tax assets and liabilities are as follows:
| December 31,
In millions | 2022 |  | 2021
Deferred tax assets: |  |  |
Employee benefits | $ | 19.1 |  |  | $ | 19.0 |
Net operating losses | 10.5 |  |  | 11.6 |
Leases | 17.2 |  |  | 16.5 |
Litigation verdict accrual | 19.9 |  |  | 19.9 |
Research and experimental expenses | 8.9 |  |  | — |
Other | 14.4 |  |  | 12.0 |
Total deferred tax assets | $ | 90.0 |  |  | $ | 79.0 |
Valuation allowance | (9.2) |  |  | (8.8) |
Total deferred tax assets, net of valuation allowance | $ | 80.8 |  |  | $ | 70.2 |
Deferred tax liabilities: |  |  |
Fixed assets | $ | 116.7 |  |  | $ | 108.6 |
Intangibles | 34.6 |  |  | 43.7 |
Inventory | 7.3 |  |  | 6.5 |
Leases | 16.9 |  |  | 16.3 |
Other | 6.1 |  |  | 2.9 |
Total deferred tax liabilities | $ | 181.6 |  |  | $ | 178.0 |
Net deferred tax asset (liability) (1) | $ | (100.8) |  |  | $ | (107.8) |
_______________ (1) Presentation in the table above is on a gross basis, however, due to jurisdictional netting, our net deferred tax asset and liability recorded on the consolidated balance sheets is $5.7 million and $106.5 million, respectively, as of December 31, 2022, and $6.8 million and $114.6 million, respectively, as of December 31, 2021. Our net deferred tax liability decreased $7.0 million at December 31, 2022 as compared to December 31, 2021. As part of Tax Cuts and Jobs Act ("TCJA") enacted in December 2017 under Internal Revenue Code Section 174, beginning in 2022 we are required to capitalize and amortize research and experimental expenditures, thus creating a new deferred tax asset for 2022. The increase in deferred tax assets was slightly offset by an increase in the deferred fixed asset liability as a result of U.S. bonus depreciation, UK super deduction, as well as the 2022 acquisition of Ozark Materials. Impacts of foreign currency fluctuations, most notably in the UK, decreased the overall deferred tax liability by $6.6 million. We have deferred tax assets, including net operating loss and state tax credit carryforwards, which are available to offset future taxable income. A valuation allowance has been provided where management has determined that it is more likely than not that the deferred tax assets will not be realized. In 2022, we recognized tax expense of $0.1 million due to our expected inability to recognize the benefit associated with state tax credits prior to their expiration. At December 31, 2022, foreign net operating loss carryforwards totaled $35.3 million. Of this total, $0.1 million will expire in 2 years and $35.2 million has no expiration date. Due to the global nature of our operations, a portion of our cash is held outside the U.S. The cash and cash equivalent balance at December 31, 2022 included $71.7 million held by our foreign subsidiaries. At December 31, 2022, 2021, and 2020, no deferred income taxes have been provided for our share of undistributed net earnings of foreign operations due to management’s intent to reinvest such amounts indefinitely. The determination of the amount of taxes that may be due if earnings are remitted is not practicable because such liability, if any, is dependent on circumstances that exist if and when remittance occurs. The circumstances that would affect the calculations include the source location and amount of the distribution, the underlying tax rate already paid on the earnings, foreign withholding taxes, the opportunity to use foreign tax credits, and the potential impact of U.S. Tax Reform. Positive undistributed earnings considered to be indefinitely reinvested totaled $84.5 million at December 31, 2022. A reconciliation of the beginning and ending amounts of unrecognized tax benefits is as follows:
| Years ended December 31,
In millions | 2022 |  | 2021 |  | 2020
Balance at beginning of year | $ | 0.3 |  |  | $ | 0.1 |  |  | $ | 0.1 |
Additions for tax positions related to prior years | 0.5 |  |  | 0.3 |  |  | — |
Reduction for lapse of statute of limitation | — |  |  | (0.1) |  |  | — |
Balance at end of year | $ | 0.8 |  |  | $ | 0.3 |  |  | $ | 0.1 |
As of December 31, 2022, 2021, and 2020, $0.9 million, $0.4 million, and $0.1 million, respectively, of unrecognized tax benefit, including penalties and interest, would, if recognized, impact our effective tax rate. We recognize interest accrued related to unrecognized tax benefits and penalties as income tax expense.

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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 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
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