XML 42 R26.htm IDEA: XBRL DOCUMENT
v3.24.0.1

Income Taxes | 12 Months Ended
--- | ---
Dec. 31, 2023
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes For financial reporting purposes, income (loss) before income taxes includes the following components (in millions):
| Years Ended December 31,
| 2023 |  | 2022 |  | 2021
U.S. | $ | (256.9) |  |  | $ | (123.0) |  |  | $ | (22.2) |
Foreign | (224.0) |  |  | 26.5 |  |  | (4.3) |
Total | $ | (480.9) |  |  | $ | (96.5) |  |  | $ | (26.5) |
An analysis of the expense (benefit) for income taxes from continuing operations follows (in millions):
| Years Ended December 31,
| 2023 |  | 2022 |  | 2021
Current income taxes: |  |  |  |  |
U.S. federal | $ | (13.5) |  |  | $ | (12.3) |  |  | $ | (0.4) |
U.S. state | (2.3) |  |  | 0.3 |  |  | (0.3) |
Foreign | 18.8 |  |  | 13.3 |  |  | 1.5 |
| $ | 3.0 |  |  | $ | 1.3 |  |  | $ | 0.8 |
Deferred income taxes: |  |  |  |  |
U.S. federal | $ | (5.7) |  |  | $ | (13.6) |  |  | $ | 4.7 |
U.S. state | 0.9 |  |  | (4.0) |  |  | (1.1) |
Foreign | 28.6 |  |  | (11.3) |  |  | (32.6) |
| $ | 23.8 |  |  | $ | (28.9) |  |  | $ | (29.0) |
Total | $ | 26.8 |  |  | $ | (27.6) |  |  | $ | (28.2) |
A reconciliation of income taxes computed at the U.S. Federal statutory income tax rate to the expense for income taxes is as follows (in millions):
| Years Ended December 31,
| 2023 |  | 2022 |  | 2021
| Amount |  | Percent |  | Amount |  | Percent |  | Amount |  | Percent
Tax provision at U.S. statutory rate | $ | (101.0) |  |  | 21.0 | % |  | $ | (20.3) |  |  | 21.0 | % |  | $ | (5.5) |  |  | 21.0 | %
Foreign income tax rate differential | 3.3 |  |  | (0.7) |  |  | (4.7) |  |  | 4.9 |  |  | 0.6 |  |  | (2.2) |
Income from passthrough entities | 1.9 |  |  | (0.4) |  |  | 0.6 |  |  | (0.7) |  |  | — |  |  | — |
Branch earnings | 1.4 |  |  | (0.3) |  |  | 0.2 |  |  | (0.2) |  |  | (0.9) |  |  | 3.4 |
Global intangible low tax inclusion | 3.5 |  |  | (0.7) |  |  | (1.6) |  |  | 1.7 |  |  | 6.7 |  |  | (25.5) |
Subpart F income | 1.2 |  |  | (0.3) |  |  | 0.5 |  |  | (0.5) |  |  | 0.7 |  |  | (2.6) |
Foreign derived intangible income | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
State income tax, net of federal benefit | (0.6) |  |  | 0.1 |  |  | (3.1) |  |  | 3.2 |  |  | (1.5) |  |  | 5.7 |
Adjustments to valuation allowances | 50.8 |  |  | (10.6) |  |  | (3.3) |  |  | 3.4 |  |  | 60.5 |  |  | (229.6) |
Capital loss carryforward | — |  |  | — |  |  | — |  |  | — |  |  | (86.5) |  |  | 328.5 |
Other tax credits | (3.5) |  |  | 0.7 |  |  | (2.6) |  |  | 2.7 |  |  | (1.4) |  |  | 5.4 |
Foreign tax credits | (7.4) |  |  | 1.5 |  |  | 1.8 |  |  | (1.8) |  |  | (4.9) |  |  | 18.6 |
Other foreign operational taxes | 1.8 |  |  | (0.3) |  |  | 1.5 |  |  | (1.6) |  |  | 1.3 |  |  | (5.2) |
Base erosion minimum tax amount | — |  |  | — |  |  | (0.6) |  |  | 0.7 |  |  | 0.3 |  |  | (1.2) |
Remeasurement of deferred taxes due to tax law | (0.3) |  |  | 0.1 |  |  | (3.0) |  |  | 3.1 |  |  | 0.4 |  |  | (1.5) |
Non-deductible compensation expense | 0.9 |  |  | (0.2) |  |  | 1.4 |  |  | (1.4) |  |  | 0.7 |  |  | (2.6) |
Non-deductible acquisition expense | (0.5) |  |  | 0.1 |  |  | 5.4 |  |  | (5.6) |  |  | — |  |  | — |
Goodwill impairment | 84.5 |  |  | (17.6) |  |  | — |  |  | — |  |  | — |  |  | — |
Uncertain tax positions | (4.2) |  |  | 0.9 |  |  | 1.1 |  |  | (1.2) |  |  | 0.3 |  |  | (1.2) |
Other, net | (5.0) |  |  | 1.1 |  |  | (0.9) |  |  | 0.9 |  |  | 1.0 |  |  | (4.0) |
Provision for income taxes | $ | 26.8 |  |  | (5.6) | % |  | $ | (27.6) |  |  | 28.6 | % |  | $ | (28.2) |  |  | 107.0 | %
An expense for income taxes of $26.8 million, a benefit for income taxes of $27.6 million and a benefit for income taxes of $28.2 million in the years ended December 31, 2023, 2022, and 2021, respectively, resulted in an effective tax rate of (5.6)%, 28.6%, and 107.0% in 2023, 2022, and 2021, respectively. The Company’s effective tax rates differ from the statutory federal income tax rate of 21% due primarily to varying tax rates in foreign jurisdictions, the relative amounts of income we earn in those jurisdictions, adjustments to valuation allowances, non-deductible goodwill impairment, and acquisition related nondeductible expenses due to the Neenah merger. Prior to the passage of the Tax Cuts and Jobs Act of 2017 ("Tax Act"), the Company asserted that substantially all of the undistributed earnings of its foreign subsidiaries were considered indefinitely reinvested and accordingly, no deferred taxes were provided. Due to the Tax Act, the Company has significant previously taxed earnings and profits from its foreign subsidiaries as a result of transition tax that is generally able to be repatriated free of U.S. federal tax. In addition, future earnings of foreign subsidiaries are generally expected to be able to be repatriated free of U.S. federal income tax because these earnings were taxed in the U.S. under the GILTI regime or would be eligible for a 100% dividends received deduction. As a result of the Company’s treasury policy to simplify and expediate its intercompany cash flows, as evidenced by the use of cash pooling, and in light of the Company’s demonstrated goal of driving growth though inorganic/acquisitional means, the Company does not assert indefinite reinvestment to the extent of each controlled foreign corporation's earnings and profits and to the extent of any foreign partnership’s U.S. tax capital accounts. As a result, the Company has provided for non-U.S. withholding taxes, U.S. federal tax related to currency movement on previously taxed earnings and profits, and U.S. state taxes on unremitted earnings. Additionally, the Organization for Economic Cooperation and Development (“OECD”) has reached agreement on an approach to establish a minimum global tax, set at 15%, for large multi-national enterprises, such as the Company. The OECD has recommended that certain aspects of this approach, referred to as “Pillar Two”, be made effective beginning in 2024, and many jurisdictions, including most European Member States, have already legislated Pillar Two into their statutory law and others are in the process of doing so. The Company expects that Pillar Two will introduce new challenges with respect to compliance and financial reporting requirements. Therefore, the Company continues to monitor for updates as countries within its global footprint announce Pillar Two legislation and related guidance. Net deferred income tax assets (liabilities) were comprised of the following (in millions):
| December 31,
| 2023 |  | 2022
Deferred Tax Assets |  |  |
Receivable allowances | $ | 1.3 |  |  | $ | 1.2 |
Postretirement and other employee benefits | 10.9 |  |  | 12.3 |
Net operating loss and tax credit carryforwards | 305.5 |  |  | 163.2 |
Capital loss carryforward | 47.4 |  |  | 106.5 |
Accruals and other liabilities | 0.8 |  |  | 0.3 |
Investment in subsidiaries | 0.1 |  |  | 8.9 |
Capitalized research & development | 36.8 |  |  | 29.8 |
Section 163(j) Interest Limitation | 9.9 |  |  | 12.4 |
Right Of Use Liabilities | 14.7 |  |  | 10.0 |
Other | 15.0 |  |  | 6.9 |
| $ | 442.4 |  |  | $ | 351.5 |
Less: Valuation allowance | (323.0) |  |  | (225.5) |
Net deferred income tax assets | $ | 119.4 |  |  | $ | 126.0 |
Deferred Tax Liabilities |  |  |
Net property, plant and equipment | $ | (89.2) |  |  | $ | (109.1) |
Intangibles | (136.7) |  |  | (104.1) |
Derivatives | (9.0) |  |  | (16.9) |
Right Of Use Assets | (15.1) |  |  | (9.7) |
Other | (5.3) |  |  | (3.9) |
Net deferred income tax liabilities | $ | (255.3) |  |  | $ | (243.7) |
Total net deferred income tax liabilities | $ | (135.9) |  |  | $ | (117.7) |
As of December 31, 2023, the Company had approximately $260.9 million of tax-effected operating loss carryforwards available to further reduce future taxable income in various jurisdictions, with the following expiration dates:
2026-2043 | $ | 183.1 |
Indefinite | 77.8 |
Total | $ | 260.9 |
In addition, the Company has $47.4 million of tax effected capital loss carryforwards, of which $39.5 million will expire in 2026 and $7.9 million are indefinite lived. The Company also has $18.6 million and $9.5 million of foreign tax credits and state tax credits and that will expire between 2028 – 2033, and 2024 – 2042, respectively. The Company's deferred tax asset valuation allowances are primarily the result of uncertainties regarding the future realization of recorded tax benefits on tax loss, capital loss, and credit carryforwards. The valuation allowance on deferred tax assets as of December 31, 2023, is substantially in the United States federal, state, and Luxembourg, of $54.1 million, $21.5 million, and $223.8 million, respectively. The Company's assumptions, judgments and estimates relative to the valuation of these net deferred tax assets take into account available positive and negative evidence of realizability, including recent financial performance, the ability to realize benefits of restructuring and other recent actions, projections of the amount and category of future taxable income and tax planning strategies. Actual future operating results and the underlying amount and category of income in future periods could differ from the Company's current assumptions, judgments and estimates. The Company believes that it will generate sufficient future taxable income to realize the tax benefits related to the remaining net deferred tax assets. The following table summarizes the activity related to the Company's unrecognized tax benefits related to income taxes (in millions):
| Years Ended December 31,
| 2023 |  | 2022 |  | 2021
Uncertain tax position balance at beginning of year | $ | 19.9 |  |  | $ | 9.8 |  |  | $ | 2.0 |
Increases in current year tax positions | 0.6 |  |  | 0.1 |  |  | 0.3 |
Increases in prior year tax positions | 4.4 |  |  | 1.4 |  |  | — |
Decreases due to lapse of statute of limitations | (2.4) |  |  | (0.4) |  |  | (0.7) |
Decreases due to settlements | (2.1) |  |  | — |  |  | — |
Increases from business acquisitions | (0.4) |  |  | 9.0 |  |  | 8.2 |
Uncertain tax position balance at end of year | $ | 20.0 |  |  | $ | 19.9 |  |  | $ | 9.8 |
The liability for unrecognized tax benefits included $17.1 million as of December 31, 2023 that if recognized would impact the Company's effective tax rate. We anticipate a decrease in unrecognized tax benefits by the end of 2024 of $3.8 million as a result of a lapse of the statute of limitations and audit settlements. The Company's policy with respect to penalties and interest in connection with income tax assessments or related to unrecognized tax benefits is to classify penalties as provision for income taxes and interest as interest expense in its Consolidated Statements of Income (Loss). The Company files income tax returns, including returns for its subsidiaries, with federal, state, local and foreign jurisdictions. The Company finalized an audit in Italy for tax years 2016-2018 during 2023. All expected impacts have been recorded in 2023 or earlier and are immaterial to the tax rate. We are no longer subject to U.S. federal examinations by the IRS for tax years before 2018. The 2018-2023 tax years remain subject to examination by other major tax jurisdictions.

X
- References No definition available. + Details
Name: | us-gaap_IncomeTaxDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- 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
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration