Income Taxes

3 Months Ended

Mar. 31, 2022

Accrued Income Taxes [Abstract]

Income Taxes

Income Taxes

Income tax expense attributable to our earnings from continuing operations before income taxes differs from the amounts computed using the applicable income tax rate as a result of the following factors:

		Three months ended March 31,
		2022		2021
	in millions
Computed “expected” tax expense (a)		$	(219.8)	$	(301.7)
Non-deductible or non-taxable foreign currency exchange results		128.2		119.9
Basis and other differences in the treatment of items associated with investments in subsidiaries and affiliates (b)		62.2		0.4
International rate differences (c)		(40.9)		(23.9)
Non-deductible or non-taxable interest and other items		(32.2)		(15.6)
Change in valuation allowances		13.9		34.5
Tax benefit associated with technology innovation		5.8		5.8
Other, net		1.6		15.4
Total income tax expense		$	(81.2)	$	(165.2)

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(a)The statutory or “expected” tax rate is the U.K. rate of 19.0%. On June 10, 2021, legislation was enacted in the U.K. to increase the U.K. corporate income rate to 25.0% from April 1, 2023. The impact of this rate change on our deferred tax balances was recorded during the second quarter of 2021. Effective January 1, 2022, the enacted corporate income tax rate in the Netherlands increased from 25.0% to 25.8%. This change did not have a material impact on our consolidated financial statements.

(b)Amounts reflect the net impact of differences in the treatment of income and loss items between financial reporting and tax accounting related to investments in subsidiaries and affiliates, including the effects of foreign earnings.

(c)Amounts reflect adjustments (either a benefit or expense) to the “expected” tax benefit (expense) for statutory rates in jurisdictions in which we operate outside of the U.K.

As of March 31, 2022, our unrecognized tax benefits were $454.5 million, of which $411.0 million would have a favorable impact on our effective income tax rate if ultimately recognized, after considering amounts that we would expect to be offset by valuation allowances and other factors.

During the next 12 months, we do not expect any material reductions to our unrecognized tax benefits related to tax positions taken as of March 31, 2022. No assurance can be given as to the nature or impact of any changes in our unrecognized tax positions during the next 12 months.

Certain of our subsidiaries are currently involved in income tax examinations in various jurisdictions in which we operate, including Belgium, Ireland and the U.S. While we do not expect adjustments from the foregoing examinations to have a material impact on our consolidated financial position, results of operations or cash flows, no assurance can be given that this will be the case given the amounts involved and the complex nature of the related issues.