XML 44 R23.htm IDEA: XBRL DOCUMENT v3.24.0.1
Taxes
 12 Months Ended
Dec. 31, 2023
Income Tax Disclosure [Abstract]  
Income Tax Disclosure TAXES
The sources of the Company’s earnings before taxes were as follows for the years ended December 31:
202320222021
United States$142,078 $144,107 $109,918 
Non-United States831,650 926,485 839,443 
Earnings before taxes$973,728 $1,070,592 $949,361 

The provision for taxes consists of:
CurrentDeferredTotal
Year ended December 31, 2023:
United States federal$20,036 $(10,949)$9,087 
United States state and local8,946 (838)8,108 
Non-United States169,341 (1,586)167,755 
Total$198,323 $(13,373)$184,950 
Year ended December 31, 2022:   
United States federal$363 $9,710 $10,073 
United States state and local4,893 1,282 6,175 
Non-United States166,317 15,525 181,842 
Total$171,573 $26,517 $198,090 
Year ended December 31, 2021:   
United States federal$7,750 $(7,415)$335 
United States state and local3,670 (1,099)2,571 
Non-United States168,393 9,077 177,470 
Total$179,813 $563 $180,376 
The provision for tax expense differed from the amounts computed by applying the United States federal income tax rate of 21% for the years ended December 31, 2023, 2022, and 2021 to earnings before taxes as a result of the following:
202320222021
Expected tax$204,483 $224,825 $199,365 
United States state and local income taxes, net of federal income tax benefit6,858 5,132 1,235 
Non-United States income taxes at other than U.S. federal rate(14,611)(3,055)3,439 
Excess tax benefits from stock option exercises(13,674)(22,965)(22,843)
Other, net1,894 (5,847)(820)
Total provision for taxes$184,950 $198,090 $180,376 
The Company’s reported effective tax rate was 19% in 2023, 18.5% in 2022, and 19% in 2021.
The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities are presented below at December 31:
20232022
Deferred tax assets:  
Inventory$24,969 $26,401 
Lease liability, accrued and other liabilities92,601 91,892 
Accrued post-retirement benefit and pension costs34,015 33,010 
Net operating loss and other tax carryforwards43,036 37,797 
Swiss tax reform intangible assets55,767 49,642 
Other6,726 4,927 
Total deferred tax assets257,114 243,669 
Less valuation allowance(73,460)(62,615)
Total deferred tax assets less valuation allowance183,654 181,054 
Deferred tax liabilities:  
Inventory12,095 8,053 
Lease right-of-use assets and other assets26,510 28,297 
Property, plant, and equipment83,326 76,867 
Acquired intangibles amortization62,479 61,278 
Prepaid post-retirement benefit and pension costs49,918 52,197 
International earnings19,641 27,357 
Unrealized currency gains7,165 11,285 
Total deferred tax liabilities261,134 265,334 
Net deferred tax (liability) asset$(77,480)$(84,280)
The Company continues to record valuation allowances related to certain of its deferred income tax assets due to the uncertainty of the ultimate realization of future benefits from such assets. The potential decrease or increase of the valuation allowance in the near term is dependent on the future ability of the Company to realize the deferred tax assets that are affected by the future profitability of operations in the respective/relevant jurisdictions.
A reconciliation of the beginning and ending amounts of unrecognized tax benefits is as follows:
20232022
Unrecognized tax benefits at beginning of year$50,822 $46,432 
Increases related to current tax positions5,867 12,942 
Decreases related to prior year tax positions(2,641)(7,245)
Impact of foreign currency4,177 (1,307)
Unrecognized tax benefits at end of year$58,225 $50,822 
Included in the balance of unrecognized tax benefits at December 31, 2023 and 2022 were $58.2 million and $50.8 million, respectively, of tax benefits that if recognized would reduce the Company’s effective tax rate. Increases and decreases related to current and prior year tax positions during 2023 and 2022 primarily relate to non-United States income taxes. The Company recognizes accrued amounts of interest and penalties related to its uncertain tax positions as part of its income tax expense within its consolidated statement of operations. The amount of accrued interest and penalties included within other non-current liabilities within the Company’s consolidated balance sheet as of December 31, 2023 and 2022 was $10.9 million and $9.3 million, respectively.
The Company believes that it is reasonably possible that the unrecognized tax benefit balance could decrease over the next 12 months, primarily related to the completion of certain tax examinations as well as the lapse in the statute of limitations. The Company does not expect such a change would have a material impact on its financial position, results of operations, or cash flows.
The Company plans to repatriate earnings from China, Switzerland, Germany, the United Kingdom, and certain other countries in future years and believes that there will be no additional tax costs associated with the repatriation of such foreign earnings other than non-U.S. withholding taxes, certain state taxes, and U.S. taxes on currency gains, if any, for which a deferred tax liability has been recognized. All other undistributed earnings and any additional outside basis difference inherent in these entities and the contributed capital of our foreign subsidiaries are considered to be permanently reinvested on which no U.S. deferred income taxes or foreign withholding taxes have been provided. It is not practicable to estimate the amount of deferred tax liability related to these undistributed earnings and additional outside basis differences in these entities due to the complexity of the calculation and the uncertainty regarding assumptions necessary to compute the tax.
As of December 31, 2023, the major jurisdictions for which the Company is subject to examinations are: Germany for years after 2018, the United States after 2019, France after 2020, Switzerland after 2019, the United Kingdom after 2019, and China after 2020. Additionally, the Company is currently under examination in various taxing jurisdictions in which it conducts business operations. While the Company has not yet received any material assessments from these taxing authorities, the Company believes that adequate amounts of taxes and related interest and penalties have been provided for any adverse adjustments as a result of these examinations and that the ultimate outcome of these examinations will not result in a material impact on the Company’s consolidated results of operations or financial position.