Income Taxes (Tables)

12 Months Ended

Dec. 31, 2021

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


	2021			2020			2019
Domestic	$	(15.4	)	$	(31.1	)	$	3.8
Foreign		409.0			256.9			276.6

Total income before provision for income taxes	$	393.6		$	225.8		$	280.4

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


	2021			2020			2019
Current income tax expense (benefit):
Federal	$	1.0		$	(0.5	)	$	0.6
State		1.2			(0.5	)		2.2
Foreign		118.0			85.4			82.1

Total current income tax expense		120.2			84.4			84.9

Deferred income tax expense (benefit):
Federal		(7.8	)		(4.9	)		(2.2	)
State		(2.5	)		(1.0	)		0.3
Foreign		3.1			(14.1	)		(0.6	)

Total deferred income tax benefit		(7.2	)		(20.0	)		(2.5	)

Income tax provision	$	113.0		$	64.4		$	82.4

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


	2021			2020			2019

Statutory tax rate		21.0	%		21.0	%		21.0	%
Foreign tax rate differential		5.2			4.9			5.9
Permanent differences		1.2			2.0			0.7
U.S. tax on foreign earnings		1.6			0.3			1.4
Stock compensation		(2.5	)		(0.7	)		(1.0	)
Mandatory repatriation		—			0.5			(0.6	)
Tax contingencies		2.6			1.4			1.4
Change in tax rates		(0.1	)		0.1			0.3
Withholding taxes		—			(0.1	)		(0.1	)
Repatriation of foreign earnings		(0.4	)		0.6			0.3
State income taxes, net of federal benefits		(0.4	)		(0.6	)		0.7
Research and development credits		(0.9	)		(1.2	)		(0.6	)
Other		1.2			(0.7	)		—
Change in valuation allowance for unbenefited losses		0.2			1.0			—

Effective tax rate		28.7	%		28.5	%		29.4	%

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


	2021			2020
Deferred tax assets:
Accrued expenses	$	0.3		$	4.7
Compensation		28.8			32.3
Deferred revenue		—			13.9
Disallowed interest carryforward		9.3			5.0
Net operating loss carryforwards		23.5			31.1
Foreign tax and other tax credit carryforwards		21.4			16.4
Unrealized currency gain/loss		6.8			9.6
Hedge unrealized FX gain/loss		12.5			—
Lease obligations		14.1			15.2
Other		2.4			—

Gross deferred tax assets		119.1			128.2
Less valuation allowance		(7.1	)		(6.6	)

Total deferred tax assets		112.0			121.6


Deferred tax liabilities:
Accounts receivable		—			2.7
Inventory		3.6			10.8
Fixed assets		6.1			10.4
Foreign patent reserves		4.4			2.4
Intangibles		32.6			40.2
Accrued expenses		0.5			2.8
Accrued withholding tax		6.7			6.7
Right-of-use asset		14.0			14.9
Other		0.2			2.2

Total deferred tax liabilities		68.1			93.1

Net deferred tax asset s	$	43.9		$	28.5

Changes in the valuation allowance for deferred tax assets were as follows (in millions):


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
Increases recorded as an expense to income tax provision		0.5

Balance at December 31, 2021	$	7.1

A tabular reconciliation of the Company’s gross unrecognized tax benefits is as follows (in millions):


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
Gross increases—tax positions in prior periods		17.8
Gross increases—current period tax positions		10.9

Gross unrecognized tax benefits at December 31, 2021	$	51.4