Income Taxes

9 Months Ended

Sep. 30, 2022

Income Tax Disclosure [Abstract]

Income Taxes

Note 12 – Income taxes:

	Three months ended				Nine months ended
	September 30,				September 30,
	2021		2022		2021		2022
	(In millions)
Expected tax expense at U.S. federal statutory income tax   rate of 21%	$	14.9	$	10.3	$	30.3	$	39.6
Non-U.S. tax rates		1.3		(2.0)		3.1		1.3
Incremental net tax benefit on earnings and losses of U.S.   and non-U.S. tax group companies		(.7)		1.2		(2.6)		(.1)
Valuation allowance		(.7)		(3.5)		.8		(3.3)
Global intangible low-tax income, net		.9		.5		1.9		1.9
Adjustment to the reserve for uncertain tax positions, net		.3		.5		.1		.1
Nondeductible expenses		.3		.6		.7		1.2
U.S. state income taxes and other, net		.6		.6		.9		1.4
Income tax expense	$	16.9	$	8.2	$	35.2	$	42.1
Comprehensive provision for income taxes allocable to:
Net income	$	16.9	$	8.2	$	35.2	$	42.1
Other comprehensive income (loss):
Currency translation		(.8)		(3.0)		(.4)		(6.4)
Pension plans		2.0		1.3		6.2		4.1
Other		(.1)		—		(.2)		.2
Total	$	18.0	$	6.5	$	40.8	$	40.0

The amount shown in the preceding table of our income tax rate reconciliation for non-U.S. tax rates represents the result determined by multiplying the pre-tax earnings or losses of each of our non-U.S. subsidiaries by the difference between the applicable statutory income tax rate for each non-U.S. jurisdiction and the U.S. federal statutory tax rate. The amount shown on such table for incremental net tax benefit on earnings and losses on non-U.S. and non-tax group companies includes, as applicable, (i) deferred income taxes (or deferred income tax benefits) associated with the current year earnings of all our Chemicals Segment’s non-U.S. subsidiaries, (ii) current U.S. income taxes (or current income tax benefit) including U.S. personal holding company tax, as applicable, attributable to current-year income (losses) of one of our Chemicals Segment’s non-U.S. subsidiaries, which subsidiary is treated as a dual resident for U.S. income tax purposes, to the extent the current year income (losses) of such subsidiary is subject to U.S. income tax under the U.S. dual-resident provisions of the Internal Revenue Code, (iii) deferred income taxes associated with our direct investment in Kronos and (iv) current and deferred income taxes associated with distributions and earnings from our investments in LandWell and BMI.

The 2017 Tax Act limited our business interest expense to the sum of our business interest income and 30% of our adjusted taxable income as defined in the Tax Act.  Any business interest expense not allowed as a deduction as a result of the limitation may be carried forward indefinitely. We previously determined our interest expense was limited under these provisions and we recorded deferred tax assets for the carryforwards associated with the nondeductible portion of our interest expense. We also concluded we were required to recognize a valuation allowance for such deferred tax asset under the more-likely-than-not recognition criteria. During the first nine months of 2022, we recognized an aggregate non-cash income tax benefit of $3.3 million as a reduction of the valuation allowance related to the utilization of a portion of the business interest expense carryforward.

On August 16, 2022, the Inflation Reduction Act was signed into law. Among other things, this legislation provides for a 15% corporate alternative minimum tax on certain large corporations, imposes a 1% excise tax on qualifying stock buybacks occurring after December 31, 2022, and provides for certain energy-related tax credits. We have evaluated the relevant provisions of the Act and do not expect them to have a material impact on our tax provision.

Tax authorities are examining certain of our U.S. and non-U.S. income tax returns and may propose tax deficiencies, including penalties and interest. We believe we have adequate accruals for additional taxes and related interest expense which could ultimately result from tax examinations. We believe the ultimate disposition of tax examinations should not have a material adverse effect on our consolidated financial position, results of operations or liquidity. We currently estimate that our unrecognized tax benefits will decrease by approximately $3.4 million during the next twelve months primarily due to the expiration of certain statutes of limitations.