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Income Taxes
 12 Months Ended
Dec. 31, 2023
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
Components of the Company’s loss before income taxes and adjustment for noncontrolling interests were as follows:
 Year Ended December 31,
 202320222021
Domestic$(249,582)$(154,779)$(142,883)
Foreign55,199 (45,721)(146,569)
Total$(194,383)$(200,500)$(289,452)
The Company’s income tax expense consists of the following:
 Year Ended December 31,
 202320222021
Current:
Federal$848 $(2,280)$5,158 
State41 154 68 
Foreign13,857 13,764 (1,590)
Deferred:
Federal(123)74 12,217 
State(13)106 (484)
Foreign(5,677)5,473 24,023 
Total$8,933 $17,291 $39,392 
A reconciliation of the U.S. statutory federal rate to the income tax provision was as follows:
 Year Ended December 31,
 202320222021
Tax at U.S. statutory rate$(40,820)$(42,105)$(60,785)
State and local taxes(4,122)(2,700)(3,276)
Tax credits and incentives(8,137)(8,413)(7,634)
Changes in tax law, other(433)(17)(361)
U.S. tax reform/Global Intangible Low-Taxed Income ("GILTI")/foreign derived intangible income10,923 1,382 — 
Effect of foreign tax rates(474)(1,614)(13,525)
Nonrecurring permanent items— (2,189)(3,710)
Foreign branch486 279 1,641 
Stock compensation (ASU 2016-09)1,212 1,258 1,257 
Non-deductible expenses6,367 7,192 6,618 
Tax reserves/audit settlements9 3,854 (5,043)
Valuation allowance47,293 65,559 124,228 
Other, net(3,371)(5,195)(18)
Income tax expense$8,933 $17,291 $39,392 
Effective income tax rate(4.6)%(8.6)%(13.6)%
For the year ended December 31, 2022, the Company received $54,273 in cash payments from the United States Internal Revenue Service (“IRS”) for tax refunds related to net operating loss carrybacks.
On August 16, 2022, the U.S. enacted the Inflation Reduction Action of 2022, which, among other things, implements a 15% minimum tax on financial statement income of certain large corporations, a 1% excise tax on net stock repurchases and several tax incentives to promote clean energy. The provisions were effective in the first quarter of 2023 and did not have a
significant impact on the Company’s consolidated financial statements.
Numerous countries have agreed to a statement in support of the Organization for Economic Co-operation and
Development (“OECD”) model rules that propose a global minimum tax rate of 15%, and European Union member states have
agreed to implement the global minimum tax. Certain countries, including European Union member states, have enacted or are
expected to enact legislation to be effective as early as 2024, with widespread implementation of a global minimum tax
expected by 2025. As the legislation becomes effective in countries in which the Company does business, its provision for
income taxes could be impacted. The Company will continue to monitor pending legislation and implementation by individual
countries and evaluate the potential impact on its business in future periods.
Nonrecurring permanent item in 2022 relates to a withholding tax refund related to prior periods. In 2021, the nonrecurring permanent item relates to an intercompany legal entity sale.
Deferred tax assets and liabilities reflect the estimated tax effect of accumulated temporary differences between the basis of assets and liabilities for tax and financial reporting purposes, as well as net operating losses, tax credit and other carryforwards. Significant components of the Company’s deferred tax assets and liabilities as of December 31, 2023 and 2022 were as follows:
December 31, 2023December 31, 2022
Deferred tax assets:
Pension, postretirement and other benefits$43,627 $40,060 
Capitalized expenditures42,293 31,746 
Net operating loss and tax credit carryforwards282,373 279,755 
Operating lease liabilities22,978 24,059 
Interest expense carryforwards54,442 28,610 
All other items50,740 37,392 
Total deferred tax assets496,453 441,622 
Deferred tax liabilities:
Property, plant and equipment(4,764)(9,896)
Operating lease right-of-use assets(22,018)(23,106)
All other items(12,360)(11,028)
Total deferred tax liabilities(39,142)(44,030)
Valuation allowances(438,727)(384,792)
Net deferred tax assets$18,584 $12,800 
As of December 31, 2023, the Company’s U.S. and foreign subsidiaries, primarily in France, Brazil, Italy and Germany, had operating loss carryforwards aggregating $664,000, with indefinite expiration periods. Other foreign subsidiaries in China, Mexico, Netherlands, Spain, Czech Republic and Korea had operating loss carryforwards aggregating $322,000, with expiration dates beginning in 2024. The Company has research tax credit carryforwards and foreign tax credit carryforwards totaling $50,000 in the U.S. with expiration dates beginning in 2029. The Company and its domestic subsidiaries have anticipated tax benefits of state net operating losses and credit carryforwards of $12,000 with expiration dates beginning in 2024.
As of December 31, 2023, the Company has consolidated deferred tax assets of $496,453 with valuation allowances of $438,727 related to tax losses, credit carryforwards, and other deferred tax assets in the U.S. and certain foreign jurisdictions. The Company’s valuation allowance increased in 2023 primarily from current year losses generated in the U.S. and certain foreign jurisdictions. Current and future provision for income taxes is significantly impacted by the initial recognition of and changes in valuation allowances in certain countries. The Company intends to maintain these allowances until it is more likely than not that the deferred tax assets will be realized. In the future, provision for income taxes will include no tax benefit with respect to losses incurred and no tax expense with respect to income generated in these countries until the respective valuation allowance is eliminated.
As of December 31, 2023, no material deferred income taxes have been recorded on the undistributed earnings of foreign subsidiaries, since a majority of these earnings will not be taxable upon repatriation to the United States. These earnings will be primarily treated as previously taxed income from either the one time transition tax or GILTI, or they will be offset with a 100% dividends received deduction. The Company has not recorded a deferred tax liability for foreign withholding taxes or state income taxes that may be incurred upon repatriation in the future as such undistributed foreign earnings are considered permanently reinvested or could be remitted with no tax implications.
As of December 31, 2023, the Company had $6,296 ($6,475 including interest and penalties) of total unrecognized tax benefits, of which $3,777 represents the amount of unrecognized tax benefits that, if recognized, would impact the effective income tax rate.
A reconciliation of the beginning and ending amount of unrecognized tax benefits was as follows:
 20232022
Balance at beginning of period$5,930 $3,571 
Tax positions related to the current period
Gross additions332 336 
Tax positions related to prior years
Gross additions92 2,692 
Gross reductions— (669)
Settlements(58)— 
Balance at end of period$6,296 $5,930 
The Company, or one of its subsidiaries, files income tax returns in the United States and other foreign jurisdictions. During the examination of our 2015 and 2016 U.S. federal income tax filings, the IRS asserted that income earned by a Netherlands subsidiary from its Mexican branch operations should be categorized as foreign based company sales income under Section 954(d) of the Internal Revenue Code and should be recognized currently as taxable income on our 2015 and 2016 U.S. federal income tax filings. As a result of this assertion, the IRS issued a Notice of Proposed Adjustment (“NOPA”). A similar NOPA has been issued for 2017 and 2018 as well. The Company believes the proposed adjustment is without merit and are in the the process of contesting the matter. During 2023, the Company had an opening conference with the IRS’s administrative appeals office and the Company is in continuing discussion on the issue. The Company believes, after consultation with tax and legal counsel, that it is more likely than not that it will ultimately be successful in defending its position. As such, the Company has not recorded any impact of the IRS’s proposed adjustment in its consolidated financial statements as of and for the year ended December 31, 2023. In the event the Company is not successful in defending its position, the potential income tax expense impact, including interest, related to tax years 2015 through 2023 is less than $10 million. The Company intends to vigorously contest the conclusions reached in the NOPA through the IRS’s administrative appeals process, and, if necessary, through litigation.
The statute of limitations for U.S. state and local jurisdictions is closed for taxable years ending prior to 2015. The Company’s major foreign jurisdictions are Brazil, Canada, China, France, Germany, Italy, Mexico, and Poland. The Company is no longer subject to income tax examinations in major foreign jurisdictions for years prior to 2018.
During the next twelve months, it is reasonably possible that, as a result of audit settlements and the completion of current examinations, the Company may decrease the amount of its gross unrecognized tax benefits by approximately $3,141, all of which, if recognized, would impact the effective tax rate.
The Company classifies all income tax related interest and penalties as income tax expense. The Company has liabilities of $179 and $170 recorded as of December 31, 2023 and 2022, respectively, for tax related interest and penalties on its consolidated balance sheet.