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Income taxes
 12 Months Ended
Dec. 31, 2022
Income Tax Disclosure [Abstract]  
Income taxes Income taxes
The following table summarizes the components of the provision for income taxes from continuing operations:
202220212020
Current:
Federal$32,798 $134,336 $11,148 
State8,747 16,970 9,644 
Non-U.S.56,442 35,399 35,042 
Deferred:
Federal(27,528)(85,272)(9,475)
State10,116 (16,933)(13,734)
Non-U.S.2,428 (10,151)(10,694)
$83,003 $74,349 $21,931 
At December 31, 2022, the cumulative unremitted earnings of subsidiaries outside the U.S. that are considered non-permanently reinvested and for which taxes have been provided approximated $1.1 billion. At December 31, 2022, the cumulative unremitted earnings of subsidiaries outside the U.S. that are considered permanently reinvested approximated $1.2 billion. Earnings considered permanently reinvested are expected to be reinvested indefinitely and, as a result, no additional deferred tax liability has been recognized with regard to these earnings. It is not practical to determine the deferred income tax liability on these earnings if, in the future, they are remitted to the U.S. because the income tax liability to be incurred, if any, is dependent on circumstances existing when remittance occurs.
The following table summarizes the U.S. and non-U.S. components of income from continuing operations before taxes:
202220212020
U.S.$164,151 $209,231 $233,034 
Non-U.S.281,768 350,237 124,698 
$445,919 $559,468 $357,732 
Reconciliations between the statutory federal income tax rate and the effective income tax rate are as follows:
202220212020
Federal statutory rate21.0 %21.0 %21.0 %
Tax effect of international items(4.6)(6.0)(5.3)
Foreign merger - deferred taxes— — — 
Excess tax benefits related to share-based compensation(0.3)(1.1)(4.9)
State taxes, net of federal benefit3.4 0.1 (0.3)
Uncertain tax contingencies(0.4)(0.1)(0.5)
Contingent consideration0.1 0.2 (2.2)
Intellectual property impairment charge— — (1.2)
Research and development tax credit(1.0)(0.8)(1.1)
Other, net0.5 — 0.6 
18.6 %13.3 %6.1 %
The effective income tax rate for 2022 was 18.6% compared to 13.3% for 2021. The effective income tax rate for 2022 reflects tax expense resulting from a deferred charge relating to the 2022 Restructuring Plan and from a U.S. law effective in 2022 requiring capitalization of certain research and development expenditures. The effective income tax rate for 2021 reflects tax expense associated with the Respiratory business divestiture. Additionally, the effective tax rates for both 2022 and 2021 reflect a net excess tax benefit related to share-based compensation and a tax benefit from research and development tax credits.
We are routinely subject to examinations by various taxing authorities. In conjunction with these examinations and as a regular practice, we establish and adjust reserves with respect to its uncertain tax positions to address developments related to those positions. We realized a net benefit of $2.0 million, $0.8 million and $1.7 million in 2022, 2021 and 2020 respectively, as a result of reducing our reserves with respect to uncertain tax positions, principally due to the expiration of a number of applicable statutes of limitations.
The following table summarizes significant components of our deferred tax assets and liabilities at December 31, 2022 and 2021:
20222021
Deferred tax assets:
Tax loss and credit carryforwards$110,857 $168,113 
Lease Liabilities32,339 32,127 
Pension1,163 350 
Reserves and accruals64,498 64,421 
Other24,013 4,379 
Less: valuation allowances(91,531)(143,177)
Total deferred tax assets141,339 126,213 
Deferred tax liabilities:
Property, plant and equipment25,427 24,479 
Intangibles — stock acquisitions379,298 352,139 
Unremitted non-U.S. earnings67,833 73,385 
Lease Assets32,339 32,127 
Other18,926 7,387 
Total deferred tax liabilities523,823 489,517 
Net deferred tax liability$(382,484)$(363,304)
Under the tax laws of various jurisdictions in which we operate, deductions or credits that cannot be fully utilized for tax purposes during the current year may be carried forward, subject to statutory limitations, to reduce taxable income or taxes payable in a future tax year. At December 31, 2022, the tax effect of such carryforwards approximated $110.9 million. Of this amount, $16.0 million has no expiration date, $20.1 million expires after 2022 but before the end of 2027 and $74.8 million expires after 2027. A portion of these carryforwards consists of tax losses and credits obtained by us as a result of acquisitions; the utilization of these carryforwards is subject to an annual limitation imposed by Section 382 of the Internal Revenue Code, which limits a company’s ability to deduct prior net operating losses following a more than 50 percent change in ownership. It is not expected that the Section 382 limitation will prevent us ultimately from utilizing the applicable loss carryforwards. The determination of state net operating loss carryforwards is dependent upon the U.S. subsidiaries’ taxable income or loss, the state’s proportion of each subsidiary's taxable net income and the application of state laws, which can change from year to year and impact the amount of such carryforward.
The valuation allowance for deferred tax assets of $91.5 million and $143.2 million at December 31, 2022 and 2021, respectively, relates principally to the uncertainty of our ability to utilize certain deferred tax assets, primarily tax loss and credit carryforwards in various jurisdictions. The valuation allowance was calculated in accordance with applicable accounting standards, which require that a valuation allowance be established and maintained when it is “more likely than not” that all or a portion of deferred tax assets will not be realized.
Uncertain Tax Positions: The following table is a reconciliation of the beginning and ending balances for liabilities associated with unrecognized tax benefits for the years ended December 31, 2022, 2021 and 2020:
202220212020
Balance at January 1
$6,105 $7,230 $7,561 
Increase in unrecognized tax benefits related to prior years
215 — 1,286 
Decrease in unrecognized tax benefits related to prior years
(761)— — 
Reductions in unrecognized tax benefits due to lapse of applicable statute of limitations
(1,117)(956)(1,864)
(Decrease) increase in unrecognized tax benefits due to foreign currency translation
(182)(169)247 
Balance at December 31
$4,260 $6,105 $7,230 
The total liabilities associated with the unrecognized tax benefits that, if recognized, would impact the effective tax rate for continuing operations, were $2.7 million at December 31, 2022.
We accrue interest and penalties associated with unrecognized tax benefits in income tax expense in the consolidated statements of income, and the corresponding liability is included in the consolidated balance sheets. The net interest expense (benefit) and penalties reflected in income from continuing operations for the year ended December 31, 2022 was $0.2 million and $(0.2) million, respectively; for the year ended December 31, 2021 was $0.2 million and $(0.3) million, respectively; and for the year ended December 31, 2020 was $0.2 million and $(0.5) million, respectively. The liabilities in the consolidated balance sheets for interest and penalties at December 31, 2022 were $0.6 million and $1.5 million, respectively, and at December 31, 2021 were $0.8 million and $1.8 million, respectively.
The taxable years for which the applicable statute of limitations remains open by major tax jurisdictions are as follows:
 BeginningEnding
U.S.20192022
Canada20182022
China20172022
Czech Republic20192022
France20192022
Germany20112022
India20022022
Ireland20182022
Italy20172022
Malaysia20152022
Singapore20182022
We are routinely subject to income tax examinations by various taxing authorities. As of December 31, 2022, the most significant tax examinations in process were in Ireland, Germany and France. The date at which these examinations may be concluded and the ultimate outcome of the examinations are uncertain. As a result of the uncertain outcome of these ongoing examinations, future examinations or the expiration of statutes of limitation, it is reasonably possible that the related unrecognized tax benefits for tax positions taken could materially change from those recorded as liabilities at December 31, 2022. Due to the potential for resolution of certain examinations, and the expiration of various statutes of limitations, it is reasonably possible that our unrecognized tax benefits may change within the next year by a range of zero to $2.0 million.
Supplemental cash flow information
Year Ended December 31,
202220212020
Income taxes paid, net of refunds$162,046 $108,609 $77,163