Income Taxes

12 Months Ended

Dec. 31, 2023

Income Tax Disclosure [Abstract]

Income Taxes

12. Income Taxes:

Our provision for income taxes consisted of the following (in millions):

	For the Years Ended December 31,
	2023		2022		2021
Current:
Federal	$	131.8	$	104.0	$	72.0
State	26.6		21.6		17.0
Foreign	14.5		7.8		13.4
Total current	172.9		133.4		102.4
Deferred:
Federal	(22.2)		(13.9)		(2.6)
State	(4.9)		(3.1)		(1.5)
Foreign	1.6		2.3		(2.2)
Total deferred	(25.5)		(14.7)		(6.3)
Total provision for income taxes	$	147.4	$	118.7	$	96.1

Income before income taxes was comprised of the following (in millions):

	For the Years Ended December 31,
	2023		2022		2021
Domestic	$	471.4	$	340.2	$	307.8
Foreign	266.1		275.6		252.3
Total	$	737.5	$	615.8	$	560.1

The difference between the income tax provision computed at the statutory federal income tax rate and the financial statement Provision for income taxes is summarized as follows (in millions):

	For the Years Ended December 31,
	2023		2022		2021
Provision at the U.S. statutory rate of 21%	$	154.9	$	129.3	$	117.6
Increase (reduction) in tax expense resulting from:
State income tax, net of federal income tax benefit	16.4		14.6		12.1
Tax credits, net of unrecognized tax benefits	(3.4)		(8.0)		(9.3)
Change in unrecognized tax benefits	0.4		0.2		0.2
Change in valuation allowance	0.1		—		—
Foreign taxes at rates other than U.S. statutory rate	(40.3)		(47.4)		(43.6)
Deemed inclusions	6.1		10.0		7.7
Global intangible low-taxed income	17.5		23.9		18.8
Change in rates from the Tax Act & other law changes	0.2		0.1		0.1
Excess tax benefits from stock-based compensation	(5.2)		(0.6)		(5.7)
Miscellaneous other	0.7		(3.4)		(1.8)
Total provision for income taxes	$	147.4	$	118.7	$	96.1

Deferred income taxes reflect the tax consequences on future years of temporary differences between the tax basis of assets and liabilities and their financial reporting basis and depending on the classification of the asset or liability generating the deferred tax. The deferred tax provision for the periods shown represents the effect of changes in the amounts of temporary differences during those periods.

Deferred tax assets (liabilities) were comprised of the following (in millions):

	As of December 31,
	2023		2022
Gross deferred tax assets:
Warranties	$	35.9	$	34.9
Loss carryforwards (foreign, U.S. and state)	10.9		29.6
Post-retirement and pension benefits	4.7		10.2
Inventory reserves	12.3		9.3
Receivables allowance	6.6		6.0
Compensation liabilities	6.2		5.9
Legal reserves	14.2		10.5
Tax credits, net of federal effect	12.1		11.9
Research and development capitalization	39.7		17.9
Other	9.0		7.1
Total deferred tax assets	151.6		143.3
Valuation allowance	(17.8)		(37.9)
Total deferred tax assets, net of valuation allowance	133.8		105.4
Gross deferred tax liabilities:
Depreciation	(61.8)		(58.9)
Intangibles	(15.9)		(15.6)
Insurance liabilities	(2.4)		(1.4)
Other	(1.9)		(2.0)
Total deferred tax liabilities	(82.0)		(77.9)
Net deferred tax assets	$	51.8	$	27.5

As of December 31, 2023 and 2022, we had $10.8 million and $21.5 million in tax-effected foreign net operating loss carryforwards, respectively. The deferred tax asset valuation allowance relates primarily to loss carryforwards. The remainder of the valuation allowance relates to state tax credits.

In assessing whether a deferred tax asset will be realized, we consider whether it is more likely than not that some portion or all of the deferred tax asset will not be realized. We consider the reversal of existing taxable temporary differences, projected future taxable income and tax planning strategies in making this assessment. Based upon the level of historical taxable income and projections for future taxable income over the periods in which the deferred tax assets are deductible, we believe it is more likely than not we will realize the benefits of these deductible differences, net of the existing valuation allowances, as of December 31, 2023.

No provision was made for income taxes which may become payable upon distribution of our foreign subsidiaries’ earnings. An actual repatriation in the future from our non-U.S. subsidiaries could still be subject to foreign withholding taxes and U.S. state taxes, but we expect any amounts to be immaterial.

We and our subsidiaries file income tax returns with the U.S. federal government, various U.S. states, and various foreign jurisdictions throughout the world. We regularly engage in discussions and negotiations with tax authorities regarding tax matters, and we continue to defend any and all such claims presented. Our U.S. federal and state tax returns remain open to examination for 2017 through 2023. We are currently under a limited scope audit by the Internal Revenue Service for our 2021 and 2022 tax years. There are also ongoing U.S. state and local audits and other foreign audits covering fiscal years 2017 through 2023. We are generally no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations by taxing authorities for years prior to 2016. We have no material uncertain tax provisions recorded as of December 31, 2023. We do not expect the results from any ongoing income tax audit to have a material impact on our consolidated financial condition, results of operations, or cash flows.