Income Taxes (Tables)

12 Months Ended

Dec. 31, 2022

Income Tax Disclosure [Abstract]

Schedule of Income (Loss) Before Income Taxes

Income (loss) before income taxes for the years ended December 31, 2022, 2021 and 2020 consisted of the following.

	2022		2021		2020
U.S.	$	267.5	$	121.3	$	(158.4)
Non-U.S.	474.7		391.7		113.0
Income (loss) before income taxes	$	742.2	$	513.0	$	(45.4)

Schedule of Components of Provision (Benefit) for Income Taxes

The following table details the components of the Provision (benefit) for income taxes for the years ended December 31, 2022, 2021 and 2020.

	2022		2021		2020
Current:
U.S. federal	$	66.5	$	(33.1)	$	6.6
U.S. state and local	21.5		5.8		6.7
Non-U.S.	147.4		109.1		79.6
Deferred:
U.S. federal	(37.3)		(19.5)		(33.4)
U.S. state and local	(5.5)		(0.9)		(2.9)
Non-U.S.	(43.0)		(83.2)		(45.2)
Provision (benefit) for income taxes	$	149.6	$	(21.8)	$	11.4

Schedule of Effective Income Tax Rate Reconciliation

The U.S. federal corporate statutory rate is reconciled to the Company’s effective income tax rate for the years ended December 31, 2022, 2021 and 2020 as follows.

	2022		2021		2020
U.S. federal corporate statutory rate	21.0	%	21.0	%	21.0	%
State and local taxes, less federal tax benefit	2.0		1.1		(8.0)
Net effects of foreign tax rate differential	1.5		1.0		(14.6)
Withholding tax	2.1		3.0		(12.9)
Repatriation cost	(3.2)		1.4		17.7
Global Intangible Low-Tax Income (“GILTI”)	0.3		2.3		(11.7)
ASC 740-30 (formerly APB 23)	1.9		2.9		(18.6)
Valuation allowance changes	0.5		(5.4)		4.8
Uncertain tax positions	0.2		(1.3)		(4.7)
Equity compensation	(0.6)		(2.5)		6.1
Nondeductible acquisition costs	0.4		0.4		(7.7)
Foreign Derived Intangible Income (“FDII”) deduction	(1.6)		(3.2)		10.1
Tax credits	(1.1)		(0.8)		4.7
Income not subject to tax	(3.5)		(3.3)		—
Utilization of capital loss	—		(9.1)		—
Non-U.S. deferred change related to asset sales	—		(8.0)		—
Return to provision adjustment	—		(1.3)		0.5
Other, net	0.3		(2.4)		(11.8)
Effective income tax rate	20.2	%	(4.2)	%	(25.1)	%

Schedule of Deferred Tax Assets and Liabilities

The principal items that gave rise to deferred income tax assets and liabilities as of December 31, 2022 and 2021 are as follows.

	2022		2021
Deferred Tax Assets:
Reserves and accruals	$	78.5	$	69.3
Allowance for credit losses	7.4		10.0
Inventory reserve	4.9		12.0
Pension and postretirement benefit plans	25.4		41.7
Tax loss carryforwards	107.2		95.9
Deferred taxes recorded in other comprehensive income	0.1		10.2
Foreign tax credit carryforwards	53.8		43.8
Other	31.8		30.9
Total deferred tax assets	309.1		313.8
Valuation allowance	(107.3)		(106.4)
Deferred Tax Liabilities:
LIFO inventory	(21.8)		(16.2)
Investment in partnership	(36.3)		(37.4)
Property, plant and equipment	(36.0)		(40.9)
Intangible assets	(663.6)		(742.1)
Unremitted foreign earnings	(32.4)		(49.6)
Other	—		(1.6)
Total deferred tax liabilities	(790.1)		(887.8)
Net deferred income tax liability	$	(588.3)	$	(680.4)

Schedule of Tax Attributes and Related Valuation Allowance

The Company believes that it is more likely than not that it will realize its deferred tax assets through the reduction of future taxable income, other than for the deferred tax assets reflected below. Tax attributes and related valuation allowances as of December 31, 2022 were as follows.

	Tax Benefit		Valuation Allowance		Carryforward Period Ends
Tax Attributes to be Carried Forward
U.S. federal net operating loss	$	0.2	$	(0.2)	Unlimited
U.S. federal net operating loss	0.1		(0.1)		2031-2040
U.S. federal capital loss	24.8		—		2027
U.S. federal capital loss	—		—		2031-2040
U.S. federal tax credit	53.8		(53.8)		2023-2032
Alternative minimum tax credit	0.8		(0.1)		Unlimited
U.S. state and local net operating losses	2.8		(0.4)		2026-2041
U.S. state and local tax credit	0.3		—		2040
U.S. state capital loss	0.5		—		2027
Non U.S. net operating losses	67.0		(46.1)		Unlimited
Non U.S. capital losses	0.6		(0.6)		Unlimited
Excess interest	11.9		(2.6)		Unlimited
Other deferred tax assets	3.4		(3.4)		Unlimited
Total tax carryforwards	$	166.2	$	(107.3)

Schedule of Valuation Allowance

A reconciliation of the changes in the valuation allowance for deferred tax assets for the years ended December 31, 2022, 2021 and 2020 are as follows.

	2022		2021		2020
Beginning balance	$	106.4	$	140.6	$	67.9
Revaluation or additions due to acquisitions or mergers(1)	—		—		63.3
Charged to tax expense	3.1		(27.6)		8.3
Charged to other accounts	(2.2)		(6.6)		1.1
Deductions(2)	—		—		—
Ending balance	$	107.3	$	106.4	$	140.6

(1)Revaluation for the tax year ended December 31, 2020 relates to the inclusion of Ingersoll Rand’s opening balance sheet (“OBS”) beginning valuation allowance.

(2)Deductions relate to the realization of net operating losses or the removal of deferred tax assets.

Schedule of Unrecognized Tax Benefits Roll Forward

Below is a tabular reconciliation of the changes in total unrecognized tax benefits during the years ended December 31, 2022, 2021 and 2020.

	2022		2021		2020
Beginning balance	$	21.1	$	27.8	$	12.5
Gross increases for tax positions of prior years	0.4		0.8		—
Gross decreases for tax positions of prior years	(3.7)		—		—
Gross increases for tax positions of current year	4.1		5.3		16.8
Settlements	(9.9)		—		—
Lapse of statute of limitations	(0.1)		(11.8)		(3.5)
Changes due to currency fluctuations	(1.1)		(1.0)		2.0
Ending balance	$	10.8	$	21.1	$	27.8