INCOME TAXES

6 Months Ended

Jun. 30, 2023

Income Tax Disclosure [Abstract]

INCOME TAXES

NOTE 11. INCOME TAXES

The effective tax rate for the three months ended June 30, 2023 included a benefit associated with stock-based compensation, a benefit associated with prior year tax positions, an expense from a net increase in the valuation allowance related to deferred tax assets in foreign jurisdictions, and an expense from a change in tax contingencies, resulting in a net $12.0 million tax benefit. After giving consideration to these items, the effective tax rate for the three months ended June 30, 2023 of 25.4% was higher than the 21% U.S. federal statutory rate primarily due to state income tax and an increase in the valuation allowance related to losses in foreign jurisdictions, partially offset by favorable permanent salt depletion deductions. The effective tax rate for the three months ended June 30, 2022 included a benefit associated with prior year tax positions and stock-based compensation, resulting in a net $8.5 million tax benefit. After giving consideration to these items, the effective tax rate for the three months ended June 30, 2022 of 23.5% was higher than the 21% U.S. federal statutory rate primarily due to state and foreign income taxes, partially offset by foreign income exclusions and favorable permanent salt depletion deductions.

The effective tax rate for the six months ended June 30, 2023 included a benefit associated with stock-based compensation, a benefit from remeasurement of deferred taxes due to a decrease in our state effective tax rates, a benefit associated with prior year tax positions, an expense from a net increase in the valuation allowance related to deferred tax assets in foreign jurisdictions, and an expense from a change in tax contingencies, resulting in a net $17.2 million tax benefit. After

giving consideration to these items, the effective tax rate for the six months ended June 30, 2023 of 24.5% was higher than the 21% U.S. federal statutory rate primarily due to state income tax and an increase in the valuation allowance related to losses in foreign jurisdictions, partially offset by favorable permanent salt depletion deductions. The effective tax rate for the six months ended June 30, 2022 included a benefit associated with prior year tax positions and stock-based compensation, resulting in a net $10.8 million tax benefit. After giving consideration to these items, the effective tax rate for the six months ended June 30, 2022 of 24.4% was higher than the 21% U.S. federal statutory rate primarily due to state and foreign income taxes, partially offset by foreign income exclusions and favorable permanent salt depletion deductions.

As of June 30, 2023, we had $58.7 million of gross unrecognized tax benefits, which would have a net $56.8 million impact on the effective tax rate, if recognized. As of June 30, 2022, we had $46.0 million of gross unrecognized tax benefits, of which $45.4 million would have impacted the effective tax rate, if recognized. The amounts of unrecognized tax benefits were as follows:

	June 30,
	2023		2022
	($ in millions)
Balance at beginning of year	$	51.6	$	43.4
Increases for prior year tax positions	1.3		0.3
Decreases for prior year tax positions	(0.3)		(0.7)
Increases for current year tax positions	5.4		5.3
Foreign currency translation adjustments	0.7		(2.3)
Balance at end of period	$	58.7	$	46.0

As of June 30, 2023, we believe it is reasonably possible that our total amount of unrecognized tax benefits will decrease by approximately $38.1 million over the next twelve months. The anticipated reduction primarily relates to settlements with taxing authorities and the expiration of federal, state and foreign statutes of limitation.

We operate globally and file income tax returns in numerous jurisdictions. Our tax returns are subject to examination by various federal, state and local tax authorities. Additionally, examinations are ongoing in various states and foreign jurisdictions. We believe we have adequately provided for all tax positions; however, amounts asserted by taxing authorities could be greater than our accrued position. For our primary tax jurisdictions, the tax years that remain subject to examination are as follows:

	Tax Years
U.S. federal income tax	2018 - 2022
U.S. state income tax	2012 - 2022
Canadian federal income tax	2016 - 2022
Brazil	2016 - 2022
Germany	2015 - 2022
China	2014 - 2022
The Netherlands	2016 - 2022