INCOME TAXES

3 Months Ended

Apr. 01, 2023

Income Tax Disclosure [Abstract]

INCOME TAXES

INCOME TAXES

The following table summarizes our income tax expense and effective tax rate.

For the Three Months Ended	April 1, 2023			April 2, 2022
Income tax expense	$	20.1		$	19.5
Effective tax rate	16.6		%	20.6		%

The effective tax rate (ETR) for the three months ended April 1, 2023 was lower than the prior year due to tax benefits of $16.3 in 2023 from valuation allowance reversals on deferred tax assets in Germany due to a reorganization. ITT also recognized tax benefits of $4.9 as a result of filing an amended 2017 consolidated federal tax return. These tax benefits were partially offset by an expense of $14.1 relating to a tax audit in Italy covering tax years 2016-2022.

The Company operates in various tax jurisdictions and is subject to examination by tax authorities in these jurisdictions. The Company is currently under examination in several jurisdictions including China, Czechia, Germany, India, Italy, and the U.S. The estimated tax liability calculation for unrecognized tax benefits considers uncertainties in the application of complex tax laws and regulations in various tax jurisdictions. Due to the complexity of some of these uncertainties, the ultimate resolution may result in a payment that is materially different from the current estimate of the unrecognized tax benefit. Over the next 12 months, the net amount of the tax liability for unrecognized tax benefits in foreign and domestic jurisdictions could decrease by approximately $0.6 due to changes in audit status, expiration of statutes of limitations and other events.