Income Taxes (Tables)

12 Months Ended

Dec. 31, 2020

Income Taxes

Schedule of domestic and foreign components of income before taxes

The domestic and foreign components of income before taxes are as follows (in millions):

	2020		2019		2018
Domestic	$	(31.1)	$	3.8	$	(15.4)
Foreign		256.9		276.6		260.1
Total income before provision for income taxes	$	225.8	$	280.4	$	244.7

Components of income tax provision

The components of the income tax provision are as follows (in millions):

	2020		2019		2018
Current income tax expense:
Federal	$	(0.5)	$	0.6	$	10.1
State		(0.5)		2.2		1.0
Foreign		85.4		82.1		61.8
Total current income tax expense		84.4		84.9		72.9
Deferred income tax (benefit) expense:
Federal		(4.9)		(2.2)		(15.4)
State		(1.0)		0.3		(0.3)
Foreign		(14.1)		(0.6)		6.5
Total deferred income tax (benefit) expense		(20.0)		(2.5)		(9.2)
Income tax provision	$	64.4	$	82.4	$	63.7

Schedule of significant components due to which income tax provision differs from the tax provision computed at the U.S. federal statutory rate

The income tax provision differs from the tax provision computed at the U.S. federal statutory rate due to the following significant components:

	2020		2019		2018
Statutory tax rate	21.0	%	21.0	%	21.0	%
Foreign tax rate differential	4.9		5.9		4.6
Permanent differences	1.6		1.1		0.7
Mandatory Repatriation	0.5		(0.6)		1.7
Tax contingencies	1.4		1.4		0.9
Change in tax rates	0.1		0.3		1.1
Withholding taxes	(0.1)		(0.1)		0.1
Repatriation of foreign earnings	0.6		0.3		(4.9)
State income taxes, net of federal benefits	(0.6)		0.7		(0.4)
Purchase accounting	—		—		0.1
Tax credits	(0.6)		(0.6)		—
Other	(1.3)		—		0.6
Change in valuation allowance for unbenefitted losses	1.0		—		0.5
Effective tax rate	28.5	%	29.4	%	26.0	%

Schedule of tax effect of temporary items that give rise to significant portions of deferred tax assets and liabilities

The tax effect of temporary items that give rise to significant portions of the deferred tax assets and liabilities are as follows (in millions):

	2020		2019
Deferred tax assets:
Accrued expenses	$	4.7	$	7.5
Compensation		32.3		32.6
Deferred revenue		13.9		8.4
Disallowed interest carryforward		5.0		2.9
Net operating loss carryforwards		31.1		21.2
Foreign tax and other tax credit carryforwards		16.4		11.0
Unrealized currency gain/loss		9.6		6.1
Lease obligations		15.2		16.3
Gross deferred tax assets		128.2		106.0
Less valuation allowance		(6.6)		(4.2)
Total deferred tax assets		121.6		101.8
Deferred tax liabilities:
Accounts receivable		2.7		0.6
Inventory		10.8		13.3
Fixed assets		10.4		4.9
Foreign patent reserves		2.4		2.2
Intangibles		40.2		40.1
Accrued expenses		2.8		0.9
Accrued Withholding Tax		6.7		5.2
Right of use asset		14.9		15.6
Other		2.2		7.3
Total deferred tax liabilities		93.1		90.1
Net deferred tax assets	$	28.5	$	11.7

Schedule of changes in the valuation allowance for deferred tax assets

The Company can only recognize a deferred tax asset to the extent this it is “more likely than not” that these assets will be realized. Judgments around realizability depend on the availability and weight of both positive and negative evidence. Changes in the valuation allowance for deferred tax assets were as follows (in millions):

Balance at December 31, 2017	$	—
Increases recorded as a loss to income tax provision		1.3
Increases recorded as part of acquisition purchase accounting		3.0
Balance at December 31, 2018	$	4.3
Decreases recorded as a benefit to income tax provision		(0.1)
Balance at December 31, 2019	$	4.2
Increases recorded as part of acquisition purchase accounting		2.4
Balance at December 31, 2020	$	6.6

Tabular reconciliation of the beginning and ending amount of unrecognized tax benefits

Gross unrecognized tax benefits at December 31, 2017	$	4.4
Gross increases - tax positions in prior periods		3.1
Lapse of statutes		(0.9)
Gross unrecognized tax benefits at December 31, 2018		6.6
Gross increases - tax positions in prior periods		4.7
Gross increases - current period tax positions		4.7
Lapse of statutes		(0.1)
Gross unrecognized tax benefits at December 31, 2019	$	15.9
Gross increases - tax positions in prior periods		1.2
Gross increases - current period tax positions		5.6
Gross unrecognized tax benefits at December 31, 2020		22.7