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Income Taxes | 12 Months Ended
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Dec. 31, 2021
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes Provision for income taxes consisted of the following:
For the year ended December 31 |  |  |  |  |  |
(in thousands) |  | 2021 |  | 2020 |  | 2019
Income before income taxes: |  |  |  |  |  |
U.S. |  | $ | 63,708 |  |  | $ | 63,375 |  |  | $ | 76,024 |
Non-U.S. |  | 102,223 |  |  | 75,699 |  |  | 102,188 |
|  | $ | 165,931 |  |  | $ | 139,074 |  |  | $ | 178,212 |
Income tax expense/(benefit) |  |  |  |  |  |
Current: |  |  |  |  |  |
Federal |  | $ | 3,348 |  |  | $ | 1,415 |  |  | $ | 780 |
State |  | 2,663 |  |  | 2,028 |  |  | 6,357 |
Non-U.S. |  | 29,319 |  |  | 26,916 |  |  | 25,255 |
|  | $ | 35,330 |  |  | $ | 30,359 |  |  | $ | 32,392 |
Deferred: |  |  |  |  |  |
Federal |  | $ | 9,911 |  |  | $ | 11,211 |  |  | $ | 10,583 |
State |  | (24) |  |  | 192 |  |  | 253 |
Non-U.S. |  | 1,946 |  |  | 69 |  |  | 1,601 |
|  | $ | 11,833 |  |  | $ | 11,472 |  |  | $ | 12,437 |
Total income tax expense |  | $ | 47,163 |  |  | $ | 41,831 |  |  | $ | 44,829 |
A reconciliation of the U.S. federal statutory tax rate to the Company’s effective income tax rate is as follows:
For the year ended December 31 | 2021 |  | 2020 |  | 2019 |
U.S. federal statutory tax rate | 21.0 | % |  | 21.0 | % |  | 21.0 | % |
State taxes, net of federal benefit | 1.8 |  |  | 1.8 |  |  | 3.0 |  |
Non-U.S. local income taxes | 2.5 |  |  | 3.2 |  |  | 4.4 |  |
U.S. permanent adjustments | 1.1 |  |  | 0.1 |  |  | — |  |
Foreign rate differential | 1.2 |  |  | 0.6 |  |  | 0.5 |  |
Net U.S. tax on non-U.S. earnings and foreign withholdings | 2.1 |  |  | 1.2 |  |  | 0.3 |  |
Provision for/(resolution) of tax audits and contingencies, net | 0.1 |  |  | 0.5 |  |  | (1.6) |  |
Tax effect of non-deductible foreign exchange loss on intercompany loan | — |  |  | 2.7 |  |  | — |  |
Impact of amended tax returns | (1.3) |  |  | — |  |  | — |  |
Return to provision and other adjustments | (0.1) |  |  | (1.0) |  |  | (2.4) |  |
Effective income tax rate | 28.4 | % |  | 30.1 | % |  | 25.2 | % |
The Company's subsidiary in Mexico has an intercompany loan payable in U.S. dollars. As a result of the weaker Mexican peso, the Company recorded a revaluation loss in 2020 which is not deductible under Mexican tax law, leading to a $3.8 million discrete tax charge. The Company has operations which constitute a taxable presence in 18 countries outside of the United States. The Company is subject to audit in the U.S. and various foreign jurisdictions. Our open tax years for major jurisdictions generally range from 2012-2021. During the periods reported, income outside of the U.S. was heavily concentrated within Brazil (34% tax rate), China (25% tax rate), and Mexico (30% tax rate). The foreign rate differential of these jurisdictions was partially offset by Switzerland (7.8% tax rate). As a result, the foreign income tax rate differential was primarily attributable to these tax rate differences. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of certain assets and liabilities for financial reporting purposes and income tax purposes. Significant components of the Company’s deferred tax assets and liabilities are as follows:
For the year ended December 31 |  | U.S. |  | Non-U.S.
(in thousands) |  | 2021 |  | 2020 |  | 2021 |  | 2020
Deferred tax assets: |  |  |  |  |  |  |  |
Accounts receivable, net |  | $ | 428 |  |  | $ | 672 |  |  | $ | 1,378 |  |  | $ | 1,453 |
Inventories |  | 1,450 |  |  | 762 |  |  | 1,752 |  |  | 1,995 |
Incentive compensation |  | 4,580 |  |  | 4,490 |  |  | 1,084 |  |  | 1,064 |
Property, plant, equipment and intangibles, net |  | — |  |  | — |  |  | 4,339 |  |  | 2,382 |
Pension, post retirement benefits - non-current |  | 12,912 |  |  | 12,498 |  |  | — |  |  | 82 |
Tax loss carryforwards |  | 217 |  |  | 517 |  |  | 19,821 |  |  | 24,509 |
Tax credit carryforwards |  | 4,643 |  |  | 9,236 |  |  | — |  |  | 954 |
Derivatives |  | 468 |  |  | 3,283 |  |  | — |  |  | — |
Reserves |  | 991 |  |  | 2,704 |  |  | — |  |  | — |
Deferred revenue |  | 239 |  |  | 1,471 |  |  | — |  |  | — |
Other |  | — |  |  | — |  |  | 1,791 |  |  | 638 |
Deferred tax assets before valuation allowance |  | 25,928 |  |  | 35,633 |  |  | 30,165 |  |  | 33,077 |
Less: valuation allowance |  | (9) |  |  | (9) |  |  | (10,650) |  |  | (10,261) |
Total deferred tax assets |  | $ | 25,919 |  |  | $ | 35,624 |  |  | $ | 19,515 |  |  | $ | 22,816 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
Unrepatriated foreign earnings |  | $ | 6,308 |  |  | $ | 3,779 |  |  | $ | — |  |  | $ | — |
Property, plant, equipment and intangibles, net |  | 5,356 |  |  | 3,122 |  |  | — |  |  | — |
Basis difference in partner capital |  | 2,466 |  |  | 2,911 |  |  | — |  |  | — |
Basis difference in investment |  | 3,985 |  |  | 6,881 |  |  | — |  |  | — |
Deferred revenue |  | — |  |  | — |  |  | 10,829 |  |  | 11,989 |
Other |  | 963 |  |  | 519 |  |  | 602 |  |  | — |
Total deferred tax liabilities |  | $ | 19,078 |  |  | $ | 17,212 |  |  | $ | 11,431 |  |  | $ | 11,989 |
Net deferred tax asset |  | $ | 6,841 |  |  | $ | 18,412 |  |  | $ | 8,084 |  |  | $ | 10,827 |
Deferred income tax assets, net of valuation allowances, are expected to be realized through the reversal of existing taxable temporary differences and future taxable income. In 2021, the Company recorded immaterial movements in its valuation allowance, which are included in Schedule II in Item 15. As of December 31, 2021, the Company's net operating loss, capital loss and tax credit carryforwards were as follows:
(in thousands) |  | Expiration Period |  | Net Operating and Capital Loss Carryforwards |  | Tax Credit Carryforwards
Jurisdiction |  |  |
U.S. Federal |  | 2025 - 2040 |  | $ | — |  |  | $ | 4,802 |
U.S. State |  | 2027 - 2035 |  | 3,471 |  |  | 400 |
U.S. State |  | Indefinite |  | 52 |  |  | — |
Non-U.S. |  | 2025 - 2030 |  | 22,383 |  |  | — |
Non-U.S. |  | Indefinite |  | 43,154 |  |  | — |
Balance at end of year |  |  |  | $ | 69,060 |  |  | $ | 5,202 |
The Company records the residual U.S. and foreign taxes on certain amounts of foreign earnings that have been targeted for repatriation to the U.S. These amounts are not considered to be indefinitely reinvested, and the Company accrued for the tax cost on these earnings to the extent they cannot be repatriated in a tax-free manner. The Company has targeted for repatriation $187.6 million of current year and prior year earnings of the Company’s foreign operations. If these earnings were distributed, the Company would be subject to foreign withholding taxes of $3.4 million and U.S. income taxes of $2.9 million which have already been recorded. The accumulated undistributed earnings of the Company’s foreign operations not targeted for repatriation to the U.S. were approximately $190.2 million, and are intended to remain indefinitely invested in foreign operations. No additional income taxes have been provided on the indefinitely invested foreign earnings at December 31, 2021. If these earnings were distributed, the Company could be subject to income taxes and additional foreign withholding taxes. Determining the amount of unrecognized deferred tax liability related to any additional outside basis difference in these entities is not practical due to the complexities of the hypothetical calculation. The following table provides a reconciliation of the beginning and ending amount of unrecognized tax benefits. If recognized, $1.5 million would impact the effective tax rate at December 31, 2021:
(in thousands) |  | 2021 |  | 2020 |  | 2019
Unrecognized tax benefits balance at January 1, |  | $ | 5,491 |  |  | $ | 5,834 |  |  | $ | 3,790 |
Increase in gross amounts of tax positions related to prior years |  | 278 |  |  | 540 |  |  | 4,874 |
Decrease in gross amounts of tax positions related to prior years |  | (4,236) |  |  | (637) |  |  | (2,239) |
Increase in gross amounts of tax positions related to current years |  | — |  |  | — |  |  | — |
Decrease due to settlements with tax authorities |  | — |  |  | — |  |  | — |
Decrease due to lapse in statute of limitations |  | (39) |  |  | (300) |  |  | (626) |
Currency translation |  | (35) |  |  | 54 |  |  | 35 |
Unrecognized tax benefits balance at December 31, |  | $ | 1,459 |  |  | $ | 5,491 |  |  | $ | 5,834 |
The Company recognizes interest and penalties related to unrecognized tax benefits within its global operations as a component of income tax expense. The Company recognized immaterial interest and penalties related to the unrecognized tax benefits noted above, for the years 2021, 2020 and 2019.

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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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