Income Taxes

12 Months Ended

Dec. 31, 2021

Income Tax Disclosure [Abstract]

Income Taxes [Text Block]

Income Taxes

The provision for income taxes for the years ended December 31 consists of the following:

	2021		2020		2019
Current:
Federal	$	68,555	$	5,085	$	3,887
State	18,418		7,114		(69)
International	214,184		130,883		134,808
	$	301,157	$	143,082	$	138,626
Deferred:
Federal	$	(347)	$	13,496	$	(54,356)
State	(388)		4,603		(2,710)
International	25,484		11,614		6,778
	24,749		29,713		(50,288)
	$	325,906	$	172,795	$	88,338

The principal causes of the difference between the U.S. federal statutory tax rate of 21% and effective income tax rates for the years ended December 31 are as follows:

	2021		2020		2019
United States	$	339,499	$	104,637	$	(557,592)
International	1,096,875		654,622		445,762
Income (loss) before income taxes	$	1,436,374	$	759,259	$	(111,830)
Provision (benefit) at statutory tax rate	$	301,638	$	159,444	$	(23,484)
State taxes (benefit), net of federal benefit	14,162		10,218		(2,051)
International effective tax rate differential	(5,402)		3,112		17,474
U.S. tax on foreign earnings	10,289		5,316		26,013
Tax expense (benefit) on wind down of business (a)	—		1,937		(11,311)
Change in valuation allowance	(1,723)		2,906		1,305
Other non-deductible expenses	9,058		2,600		1,585
Changes in tax accruals	9,937		3,089		10,418
Tax credits	(17,555)		(16,075)		(3,034)
Non-deductible portion of impairment of goodwill	—		—		75,900
Other	5,502		248		(4,477)
Provision for income taxes	$	325,906	$	172,795	$	88,338

(a)The wind down of the company’s personal computer and mobility asset disposition business resulted in net tax expense (benefit) of $1,937 and $(11,311) during 2020 and 2019, respectively.

The company is subject to taxation of global intangible low-taxed income (“GILTI”) on foreign subsidiaries and a tax provision to deduct a portion of foreign-derived intangible income (“FDII”) of U.S. corporations. GILTI tax expense, net of FDII benefit, resulted in a net tax expense (benefit) of $(12,287), $233, and $31,042 during 2021, 2020, and 2019, respectively. The 2019 GILTI tax was adversely affected by losses from the wind down of the personal computer and mobility asset disposition business. The company elected to account for GILTI tax expense (net of FDII benefit) as a current period cost.

As of December 31, 2021, a long-term tax payable of $30,857 was recorded in “other liabilities” in the consolidated balance sheets related to the Tax Act's one-time transition tax on the foreign subsidiaries' accumulated, unremitted earnings.

At December 31, 2021, the company had a liability for unrecognized tax position of $71,422. The timing of the resolution of these uncertain tax positions is dependent on the tax authorities' income tax examination processes. Material changes are not

expected, however, it is possible that the amount of unrecognized tax benefits with respect to uncertain tax positions could increase or decrease during 2022. Currently, the company is unable to make a reasonable estimate of when tax cash settlement would occur and how it would impact the effective tax rate.

A reconciliation of the beginning and ending amount of unrecognized tax benefits for the years ended December 31 is as follows:

	2021		2020		2019
Balance at beginning of year	$	62,203	$	52,986	$	35,879
Additions based on tax positions taken during a prior period	2,528		8,574		13,018
Reductions based on tax positions taken during a prior period	(1,542)		(1,749)		(86)
Additions based on tax positions taken during the current period	9,326		5,174		8,926
Reductions based on tax positions taken during the current period	(370)		(831)		(259)
Reductions related to settlement of tax matters	(692)		(538)		—
Reductions related to a lapse of applicable statute of limitations	(31)		(1,413)		(4,492)
Balance at end of year	$	71,422	$	62,203	$	52,986

Interest costs related to unrecognized tax benefits are classified as a component of “Interest and other financing expense, net” in the company's consolidated statements of operations. In 2021, 2020, and 2019, the company recognized $1,302, $1,862, and $1,469, respectively, of interest expense related to unrecognized tax benefits. At December 31, 2021 and 2020, the company had accrued a liability of $9,091 and $8,100, respectively, for the payment of interest related to unrecognized tax benefits.

In many cases the company's uncertain tax positions are related to tax years that remain subject to examination by tax authorities. The following describes the open tax years, by major tax jurisdiction, as of December 31, 2021:

United States - Federal	2016 - present
United States - States	2015 - present
Germany (a)	2013 - present
China and Hong Kong	2014 - present
Italy (a)	2013 - present
Netherlands	2016 - present
Sweden	2015 - present
Taiwan	2016 - present
United Kingdom	2017 - present

(a) Includes federal as well as local jurisdictions.

Deferred income taxes are provided for the effects of temporary differences between the tax basis of an asset or liability and its reported amount in the consolidated balance sheets. These temporary differences result in taxable or deductible amounts in future years.

The deferred tax assets and liabilities consist of the following at December 31:

	2021		2020
Deferred tax assets:
Net operating loss carryforwards	$	50,015	$	90,179
Capital loss carryforwards	57,102		56,854
Inventory adjustments	55,755		58,088
Allowance for doubtful accounts	21,382		20,134
Accrued expenses	43,995		34,196
Interest carryforward	11,160		13,265
Stock-based compensation awards	6,981		8,972
Lease liability	69,856		83,698
Other	6,291		4,659
	322,537		370,045
Valuation allowance	(82,220)		(83,942)
Total deferred tax assets	$	240,317	$	286,103
Deferred tax liabilities:
Goodwill	$	(135,285)	$	(122,129)
Depreciation	(96,097)		(113,587)
Intangible assets	(8,429)		(12,470)
Lease right-of-use assets	(64,902)		(75,968)
Total deferred tax liabilities	$	(304,713)	$	(324,154)
Total net deferred tax assets (liabilities)	$	(64,396)	$	(38,051)

At December 31, 2021, the company had international tax loss carryforwards of approximately $205,642, of which $16,733 have expiration dates ranging from 2022 to 2041, and the remaining $188,909 have no expiration date. Deferred tax assets related to these international tax loss carryforwards were $40,623 with a corresponding valuation allowance of $7,366. At December 31, 2021, the company had a valuation allowance of $3,804 related to other deferred tax assets.

At December 31, 2021, the company also had deferred tax assets of $186 related to U.S. Federal net operating loss carryforwards from acquired subsidiaries. These U.S. Federal net operating losses expire in various years beginning after 2028. Additionally, as of December 31, 2021, the company had deferred tax assets of approximately $9,205 with a corresponding valuation allowance of $7,825, related to U.S. state net operating loss carryforwards. Valuation allowances are needed when deferred tax assets may not be realized due to the uncertainty of the timing and the ability of the company to generate sufficient future taxable income in certain tax jurisdictions.

To achieve greater cash management agility and to further advance business objectives, during the fourth quarter of 2019, the company reversed its assertion to indefinitely reinvest a certain portion of its foreign earnings, of which approximately $2,180,000 are still available for distribution in future periods as of December 31, 2021, after distributions of $53,600, $349,000 and $761,000 during 2021, 2020 and 2019, respectively. The company continues to indefinitely reinvest the residual $2,487,000 of undistributed earnings of its foreign subsidiaries and recognizes that it may be subject to additional foreign taxes and U.S. state income taxes, if it reverses its indefinite reinvestment assertion on these foreign earnings.

Income taxes paid, net of income taxes refunded, amounted to $221,088, $160,143, and $188,601 in 2021, 2020, and 2019, respectively.