Income Taxes (Tables)

12 Months Ended

Dec. 31, 2021

Schedule of Income before Income Tax, Domestic and Foreign

The components of earnings before income taxes and discontinued operations were:


	Years Ended December 31,
(in millions)	2021		2020		2019
Domestic	$	15.5	$	(26.2)	$	(48.3)
Foreign	89.1		37.5		114.6
Total earnings before income taxes and discontinued operations	$	104.6	$	11.3	$	66.3

Schedule of Components of Income Tax Expense (Benefit)

Income tax (benefit) expense for the years ended December 31, 2021, 2020, and 2019 is comprised of the following:


	Years Ended December 31,
(in millions)	2021		2020		2019
Current:
U.S. Federal	$	0.4	$	0.7	$	0.7
State and local	0.3		0.2		0.2
Foreign	14.8		10.3		15.9
Total current tax expense	$	15.5	$	11.2	$	16.8
Deferred:
U.S. Federal	$	(57.1)	$	(0.4)	$	0.1
State and local	(2.6)		0.2		(0.1)
Foreign	(1.4)		(2.6)		(0.2)
Total deferred tax benefit	(61.1)		(2.8)		(0.2)
Total income tax (benefit) expense	$	(45.6)	$	8.4	$	16.6

Schedule of Effective Income Tax Rate Reconciliation

The reconciliation of the U.S. Federal income tax rate to the Company’s effective income tax rate was as follows:


	Years Ended December 31,
	2021		2020		2019
U.S. Federal income tax rate	21.0	%	21.0	%	21.0	%
State and local taxes, net of Federal income tax benefit	0.3	%	4.2	%	0.2	%
Foreign operations tax effect	3.3	%	17.3	%	5.0	%
Research and experimentation tax credits	(3.8)	%	(29.5)	%	(5.0)	%
Valuation allowance	(57.1)	%	85.4	%	15.0	%
Tax contingencies	0.6	%	0.3	%	1.3	%
Tax holiday	(10.1)	%	(37.8)	%	(24.6)	%
Foreign taxes	1.0	%	2.8	%	2.1	%
Non-deductible and non-taxable interest	(0.2)	%	1.0	%	(2.9)	%
Stock-based compensation	4.8	%	11.3	%	3.0	%
Other, principally non-tax deductible items	0.1	%	1.1	%	0.3	%


Global low tax and foreign derived intangible income	(2.3)	%	12.1	%	10.6	%
Foreign currency adjustments	(0.7)	%	(6.1)	%	—	%
Prior period items	(0.5)	%	(8.8)	%	(1.0)	%
Effective income tax rate	(43.6)	%	74.3	%	25.0	%

Schedule of Deferred Tax Assets and Liabilities

The components of the Company’s deferred tax assets and liabilities included the following:


(in millions)	December 31, 2021		December 31, 2020
Deferred tax assets:
Accrued compensation, principally post-retirement, and other employee benefits	$	10.4	$	14.1
Accrued expenses, principally for state income taxes and warranty	6.1		8.6
Accrued interest	5.9		7.7
Net operating loss and other carryforwards	70.9		71.6
Inventories, principally due to reserves for financial reporting purposes and capitalization for tax purposes	7.7		6.5
Convertible note hedges	—		1.8
Unremitted earnings of non-U.S. subsidiaries	1.6		—
Intangible assets, principally due to different tax and financial reporting bases	0.6		—


Plant and equipment, principally due to differences in depreciation	17.0		13.0

Total gross deferred tax assets	120.2		123.3
Valuation allowance	(39.1)		(98.0)
Total deferred tax assets	$	81.1	$	25.3

Deferred tax liabilities:
Intangible assets, principally due to different tax and financial reporting bases	$	—	$	(4.3)


Debt discount on convertible notes	—		(1.4)
Unremitted earnings of non-U.S. subsidiaries	—		(0.9)
Other liabilities	(3.0)		(0.8)

Total gross deferred tax liabilities	(3.0)		(7.4)
Net deferred tax asset	$	78.1	$	17.9

Classified as follows in the Consolidated Balance Sheets:


Other assets and deferred charges (non-current deferred tax assets)	$	78.7	$	19.9
Deferred income taxes (non-current deferred tax liabilities)	(0.6)		(2.0)
Net deferred tax asset	$	78.1	$	17.9

Schedule of Unrecognized Tax Benefits Roll Forward

Unrecognized Tax Benefits

The Company records interest and penalties associated with unrecognized tax benefits as a component of income tax expense. During the years ended December 31, 2021, 2020, and 2019, the Company recorded no potential interest benefit or expense. There was no accrued interest at December 31, 2021, 2020 and 2019. There was no recorded potential penalty expense during the years ended December 31, 2021, 2020, and 2019. Total accrued penalties at December 31, 2021, 2020, and 2019 of $0.3 million were included in Other liabilities on the Consolidated Balance Sheets.

The Company's tax returns are routinely audited by the tax authorities in the relevant jurisdictions. For tax years before 2017, the Company is no longer subject to U.S. federal income tax examination. For tax years before 2015, the Company’s Malaysian principal subsidiary is no longer subject to examination. Included in the balance of total unrecognized tax benefits at December 31, 2021 are potential benefits of $2.0 million, which if recognized, would affect the effective rate on earnings from continuing operations. Given the Company's current valuation allowance position, no benefit is expected to result from the reversal of any uncertain tax position associated with the acquired attributes.


Unrecognized tax benefits at January 1, 2019	$	10.1

Additions for tax positions of prior years	2.8
Reductions for tax positions of prior years	(0.1)


Settlements	(0.1)
Unrecognized tax benefits at December 31, 2019	$	12.7



Settlements	(2.6)

Foreign exchange fluctuations	0.1
Unrecognized tax benefits at December 31, 2020	$	10.2


Reductions for tax positions of prior years	(0.3)
Settlements	(0.4)


Unrecognized tax benefits at December 31, 2021	$	9.5