Income Taxes

12 Months Ended

Dec. 31, 2021

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

Domestic and foreign components of income/(loss) from operations before income taxes are shown below:

	Year Ended December 31,
(in Millions)	2021		2020 (1)		2019
Domestic	$	(15.2)	$	(19.7)	$	9.9
Foreign	39.1		(2.3)		47.9
Total	$	23.9	$	(22.0)	$	57.8

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1.As adjusted for the adoption of ASU 2020-06 using the full retrospective method.

The provision for income taxes attributable to income/(loss) from operations consisted of: 

	Year Ended December 31,
(in Millions)	2021		2020 (1)		2019
Current:
Federal (2)	$	1.7	$	(1.9)	$	3.5
Foreign	2.6		4.6		7.4
State	—		—		0.1
Total current	$	4.3	$	2.7	$	11.0
Deferred:
Federal	$	1.3	$	(0.9)	$	1.2
Foreign	17.7		(7.4)		(4.8)
State	—		(0.1)		0.2
Total deferred	19.0		(8.4)		(3.4)
Total	$	23.3	$	(5.7)	$	7.6

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1.As adjusted for the adoption of ASU 2020-06 using the full retrospective method.

The effective income tax rate applicable to income/(loss) from operations before income taxes was different from the statutory U.S. federal income tax rate due to the factors listed in the following table: 

	Year Ended December 31,
(in Millions)	2021		2020 (1)		2019
U.S. Federal statutory rate	$	5.1	$	(4.6)	$	12.1
Foreign earnings subject to different tax rates	(1.2)		0.6		(3.6)
Foreign derived intangible income	(0.7)		—		(1.1)
State and local income taxes, less federal income tax benefit	—		(0.1)		0.3
Tax on intercompany dividends and deemed dividends for tax purposes	3.8		0.1		4.4
Changes to unrecognized tax benefits	(0.9)		2.1		0.6
Other permanent items	(0.9)		(0.2)		(0.8)
Change in valuation allowance	4.4		0.3		0.3
Exchange gains and losses (2)	12.7		(5.9)		(1.8)
Withholding taxes net of credits	0.8		1.1		—
Other(3)	0.2		0.9		(2.8)
Total tax provision/(benefit)	$	23.3	$	(5.7)	$	7.6

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1.As adjusted for the adoption of ASU 2020-06 using the full retrospective method.

2.Includes the impact of transaction gains or losses on net monetary assets for which no corresponding tax expense or benefit is realized and the tax provision for statutory taxable gains or losses in foreign jurisdictions for which there is no corresponding amount in income before taxes. Additionally, the year ended December 31, 2021 includes an adjustment relating to inflation of $22.1 million.

3.The year ended December 31, 2019 includes a $3.2 million tax benefit due to revisions to our tax liabilities upon completion of prior year tax returns.

Significant components of our deferred tax assets and liabilities were attributable to:

	December 31,
(in Millions)	2021		2020 (1)
Environmental and restructuring	$	0.4	$	1.4
Net operating loss carry-forwards and credits	5.7		15.3
Other assets and reserves	7.9		5.1
Deferred tax assets	$	14.0	$	21.8
Valuation allowance, net	(6.4)		(3.6)
Deferred tax assets, net of valuation allowance	$	7.6	$	18.2
Property, plant and equipment, net	(19.0)		(10.2)
Other liabilities	(0.4)		(0.2)
Deferred tax liabilities	(19.4)		(10.4)
Net deferred tax (liabilities)/assets	$	(11.8)	$	7.8

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1.As adjusted for the adoption of ASU 2020-06 using the full retrospective method.

We evaluate our deferred income taxes quarterly to determine if valuation allowances are required or should be adjusted. U.S. GAAP requires companies to assess whether valuation allowances should be established against deferred tax assets based on all available evidence, both positive and negative, using a “more likely than not” standard. In assessing the need for a valuation allowance, appropriate consideration is given to all positive and negative evidence related to the realization of deferred tax assets. This assessment considers, among other matters, the nature and severity of current and cumulative losses, forecasts of future profitability, the duration of statutory carry-forward periods, and tax planning alternatives.

As of December 31, 2021, we had total foreign net operating loss carry-forwards of $3.5 million (tax effected) primarily related to the Netherlands and United Kingdom expiring over various tax years.

Income taxes are not provided for any additional outside basis differences inherent in our investments in subsidiaries because the investments and related unremitted earnings are essentially permanent in duration or we have concluded that no additional tax liability will arise upon disposal. Determining the amount of unrecognized deferred tax liability related to any remaining undistributed foreign earnings is not practicable due to the complexity of the hypothetical calculation.

Uncertain Income Tax Positions

U.S. GAAP accounting guidance for uncertainty in income taxes prescribes a model for the recognition and measurement of a tax position taken or expected to be taken in a tax return, and provides guidance on derecognition, classification, interest and penalties, disclosure and transition.

We file tax returns in various jurisdictions. Pursuant to the TMA with FMC we have recorded amounts in uncertain tax positions at December 31, 2018 for tax positions that relate to our legacy business before IPO. In jurisdictions where we filed consolidated returns with FMC, and did not maintain the entity at IPO, our uncertain tax positions have been reduced as of December 31, 2021. We have recorded a $0.9 million indemnification asset from FMC regarding uncertain tax positions that are related to our legacy business before IPO and for which we are indemnified by FMC. Our significant foreign jurisdictions, which total 3, are open for examination and adjustment during varying periods from 2016 - 2020.

As of December 31, 2021, we had total unrecognized tax benefits of $2.9 million, of which $1.0 million would unfavorably impact the effective tax rate from operations if recognized. As of December 31, 2020, we had total unrecognized tax benefits of $2.7 million, of which $1.3 million would unfavorably impact the effective tax rate if recognized. As of December 31, 2019, we had total unrecognized tax benefits of $2.4 million, of which $0.2 million would unfavorably impact the effective tax rate if recognized. Interest and penalties related to unrecognized tax benefits are reported as a component of income tax expense. For the years ended December 31, 2021, 2020 and 2019, we recognized interest and penalties of $(0.1) million, $0.7 million, and $0.2 million, respectively, in the consolidated statement of operations. As of December 31, 2021 and 2020, we have accrued interest and penalties in the consolidated balance sheets of $0.6 million and $1.1 million, respectively.

Due to the potential for resolution of federal, state, or foreign examinations, and the expiration of various jurisdictional statutes of limitation, it is reasonably possible that our liability for unrecognized tax benefits will decrease within the next 12 months by a range of zero to $1.0 million.

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: 

(in Millions)	2021		2020		2019
Balance at beginning of year	$	2.7	$	2.4	$	2.6
Increases related to positions taken in the current year	—		0.7		0.9
Decreases related to positions taken in prior years	(1.6)		—		—
Increases related to positions taken in prior years	1.9		—		—
Decreases related to lapse of statutes of limitations	(0.1)		(0.4)		(1.1)
Balance at end of year	$	2.9	$	2.7	$	2.4