Income Taxes

9 Months Ended

Sep. 30, 2021

Income Tax Disclosure [Abstract]

Income taxes

Note 12 – Income taxes:

		Three months ended						Nine months ended
		September 30,						September 30,
		2020			2021			2020			2021
	(In millions)
Expected tax expense, at U.S. federal statutory income   tax rate of 21%		$	1.2		$	2.5		$	1.7		$	9.1
Rate differences on equity in earnings of Kronos,   net of dividends			.1			(1.5	)		(5.3	)		(3.7	)
U.S. state income taxes and other, net			(.1	)		.1			-			.1
Income tax expense (benefit)		$	1.2		$	1.1		$	(3.6	)	$	5.5
Comprehensive provision (benefit) for income taxes    allocable to:
Net income (loss)		$	1.2		$	1.1		$	(3.6	)	$	5.5
Additional paid-in capital			-			-			(.1	)		-
Other comprehensive income (loss):
Currency translation			.6			(.5	)		(.9	)		(.2	)
Pension plans			.2			.3			.8			.9
Total		$	2.0		$	.9		$	(3.8	)	$	6.2

In accordance with GAAP, we recognize deferred income taxes on our undistributed equity in earnings (losses) of Kronos.  Because we and Kronos are part of the same U.S. federal income tax group, any dividends we receive from Kronos are nontaxable to us.  Accordingly, we do not recognize and we are not required to pay income taxes on dividends from Kronos.  We received aggregate dividends from Kronos of $19.0 million in each of the first nine months of 2020 and 2021.  The amounts shown in the above table of our income tax rate reconciliation for rate differences on equity in earnings of Kronos represent the income tax benefit associated with the nontaxable dividends we received from Kronos compared to the amount of deferred income taxes we recognized on our undistributed equity in earnings (losses) of Kronos. Our equity in earnings of Kronos in 2021 is expected to be higher than our equity in earnings of Kronos in 2020.

Income tax matters related to Kronos

On March 27, 2020, the “Coronavirus Aid, Relief and Economic Security (CARES) Act” was signed into law in response to the COVID-19 pandemic. The CARES Act, among other things, includes modifications to the limitation of business interest for tax years beginning in 2019 and 2020 increasing the business interest limitation from 30% of adjusted taxable income to 50% of adjusted taxable income which increased Kronos’ allowable interest expense deduction for 2019 and 2020.  Consequently, in the first quarter of 2020 Kronos recognized a cash tax benefit of $.5 million related to the reversal of the valuation allowance recognized in 2019 for the portion of the disallowed interest expense Kronos did not expect to fully utilize at December 31, 2019.