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Income Taxes
 12 Months Ended
Dec. 31, 2023
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
Income (loss) from continuing operations before income taxes consists of the following:
 Year Ended December 31,
 202320222021
United States$0.2 $(21.3)$(26.8)
Outside the United States41.3 32.0 25.7 
$41.5 $10.7 $(1.1)
Income taxes consists of the following:
 Year Ended December 31,
 202320222021
Current expense (benefit):
Federal$1.7 $(1.6)$(4.9)
State0.1 (0.2)0.3 
Foreign13.9 9.4 9.4 
15.7 7.6 4.8 
Deferred (benefit) expense:
Federal(7.1)(8.0)(5.9)
State(1.2)0.8 (0.6)
Foreign1.1 (1.1)0.7 
(7.2)(8.3)(5.8)
Income tax expense (benefit)$8.5 $(0.7)$(1.0)
 
In 2023, the effective tax rate of 20.5% approximated the U.S. statutory rate of 21%, as the tax benefits of the foreign tax credit and research and development tax credit were offset by the tax expense of foreign earnings, GILTI and non-deductible expenses.

In 2022, the Company completed a research and development tax credit study for the current year as well as U.S. tax years open under statute. The completed study resulted in additional research and development tax credit benefits being recorded in 2022.

The Coronavirus Aid, Relief, and Economic Security (“CARES”) Act was enacted on March 27, 2020 to address the impact of the COVID-19 pandemic. Significant impacts of the CARES Act include the ability to carry back a net operating loss five years and an increase of the Internal Revenue Code Section 163(j) interest expense disallowance limitations from 30% to 50% of adjusted taxable income. The Company has recorded a significant benefit for the impact of the net operating loss carryback, which provides for refunds related to tax years in which the U.S. tax rate was 35% versus the current U.S. tax rate of 21%. This additional tax benefit of 14% increased the 2021 tax benefit.

A reconciliation of income tax expense (benefit) computed by applying the statutory federal income tax rate to income tax benefit as recorded is as follows:
Year Ended December 31,
202320222021
Income tax expense (benefit) at U.S. statutory rate$8.7 $2.3 $(0.2)
Effect of state income taxes, net(1.1)0.3 (0.3)
Effect of foreign operations4.4 3.0 1.9 
Valuation allowance(1.3)0.8 (0.1)
Uncertain tax positions0.3 0.4 (0.3)
Non-deductible items2.3 (0.2)0.9 
Equity compensation1.4 1.4 0.6 
CARES Act NOL carryback— — (3.1)
Foreign tax credit(4.3)(4.1)(1.4)
Other tax credits(3.3)(5.6)(0.4)
GILTI2.4 1.8 1.4 
FDII(0.8)(0.2)— 
Other, net(0.2)(0.6)— 
Income tax expense (benefit) as recorded$8.5 $(0.7)$(1.0)
Significant components of the Company’s net deferred income tax assets and liabilities are as follows:
 Year Ended December 31,
 20232022
Deferred income tax assets:
Postretirement benefit obligation$0.3 $0.4 
Inventory13.0 12.8 
Net operating loss and credit carryforwards18.9 17.8 
Operating lease liabilities11.3 13.3 
Compensation3.7 2.3 
Capitalized research and development expenditures13.1 10.8 
Disallowed interest11.5 7.9 
Other4.1 4.2 
Total deferred income tax assets75.9 69.5 
Deferred income tax liabilities:
Depreciation15.7 19.3 
Pension17.0 14.1 
Intangible assets16.0 16.2 
Lease right-of-use assets11.3 13.3 
Other4.8 3.1 
Total deferred income tax liabilities64.8 66.0 
Net deferred income tax assets prior to valuation allowances11.1 3.5 
Valuation allowances(7.3)(8.6)
Net deferred income tax asset (liability)$3.8 $(5.1)

At December 31, 2023, the Company has U.S., state and foreign net operating loss carryforwards as well as U.S. foreign tax credit carryforwards and research and development tax credit carryforwards for income tax purposes. The foreign net operating loss carryforward is $26.9 million, of which $13.9 million expires between 2024 and 2043 and the remainder has no expiration date. The Company has a tax benefit from a state net operating loss carryforward of $3.9 million, of which $3.5 million expires between 2024 and 2043 and the remainder has no expiration date. The Company also has a non-consolidated U.S. net operating loss carryforward of $1.2 million that expires between 2036 and 2038. The Company has recorded a valuation allowance of $7.1 million against these net operating loss carryforwards in jurisdictions where those losses are not expected to be realized. The foreign tax credit carryforward is $1.9 million and expires between 2031 and 2033. The U.S. research and development tax credit carryforward is $3.6 million and expires between 2042 and 2043.
 
As of December 31, 2023 and 2022, the Company was in a cumulative three-year loss position. The Company has determined that it was more likely than not that its U.S. deferred tax assets will be realized. The Company reviews all valuation allowances related to deferred tax assets and will reverse these valuation allowances, partially or totally, when appropriate under ASC 740.
A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
 
202320222021
Unrecognized Tax Benefit — January 1$0.8 $1.0 $2.1 
Gross Increases to Tax Positions Related to Prior Years— 0.3 — 
Gross Decreases related to settlements with taxing authorities— — (0.1)
Expiration of Statute of Limitations(0.3)(0.5)(1.0)
Unrecognized Tax Benefit — December 31$0.5 $0.8 $1.0 
The total amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate is $0.1 million at both December 31, 2023 and December 31, 2022. The Company recognizes accrued interest and penalties related to unrecognized tax benefits in income tax expense. During 2023 and 2022, the Company recognized a tax benefit of approximately $0.1 million in net interest and penalties due to the expiration of various uncertain tax positions. The Company had approximately $0.1 million for the payment of interest and penalties accrued at both December 31, 2023 and 2022. It is reasonably possible that, within the next twelve months, the amount of gross unrecognized tax benefits could be reduced by approximately $0.1 million as a result of the closure of tax statutes related to existing uncertain tax positions.
The Company is subject to taxation in the U.S. and various state and foreign jurisdictions. The Company’s tax years for 2015 through 2023 remain open for examination by the Internal Revenue Service and 2008 through 2023 remain open for examination by various state and foreign taxing authorities.
As of December 31, 2023, the Company has accumulated undistributed earnings generated by our foreign subsidiaries of approximately $237.9 million. Because $135.9 million of such earnings have previously been subject to the one-time transition taxes required by the U.S. Tax Cuts and Jobs Act (the “TCJA”), any additional taxes due with respect to such earnings or the excess of the amount for financial reporting over the tax basis of our foreign investments would generally be limited to foreign withholding and state income taxes. We intend, however, to indefinitely reinvest these earnings and expect future U.S. cash generation to be sufficient to meet future U.S. cash needs.