Income Taxes (Tables)

12 Months Ended

Dec. 31, 2019

Summary of Consolidated Income Before Provision for Income Taxes and Equity in Net Income of Affiliates and Components of Provision for Income Taxes

A summary of consolidated income before provision for income taxes and equity in net income of affiliates and the components of provision for income taxes is shown below (in millions):



For the year ended December 31,	2019			2018			2017
Consolidated income before provision for income taxes and equity in net income of affiliates:
Domestic	$	317.4		$	726.2		$	449.5
Foreign	636.2			812.2			1,077.2
	$	953.6		$	1,538.4		$	1,526.7
Domestic (benefit) provision for income taxes:
Current provision	$	24.2		$	35.0		$	25.8
Deferred (benefit) provision	(52.6		)	91.5			(46.1		)
Total domestic (benefit) provision	(28.4		)	126.5			(20.3		)
Foreign provision for income taxes:
Current provision	160.1			190.2			253.0
Deferred (benefit) provision	14.4			(4.8		)	(35.2		)
Total foreign provision	174.5			185.4			217.8
Provision for income taxes	$	146.1		$	311.9		$	197.5

Summary of Difference Between Provision for Income Taxes Calculated at United States Federal Statutory Income Tax Rate and Consolidated Provision for Income Taxes

A summary of the differences between the provision for income taxes calculated at the United States federal statutory income tax rate of 21% in 2019 and 2018 and 35% in 2017 and the consolidated provision for income taxes is shown below (in millions):



For the year ended December 31,	2019			2018			2017
Consolidated income before provision for income taxes and equity in net income of affiliates multiplied by the United States federal statutory income tax rate	$	200.2		$	323.1		$	534.4
Differences in income taxes on foreign earnings, losses and remittances	13.8			56.6			(128.9		)
Valuation allowance adjustments	1.2			(52.4		)	(56.8		)
Research and development and other tax credits	(40.8		)	(9.9		)	(26.8		)
Foreign-derived intangible income ("FDII") deduction	(29.3		)	(27.6		)	—
U.S. expenses apportioned to GILTI and foreign branches ⁽¹⁾	10.4			17.6			—
Tax audits and assessments	0.4			6.9			(1.4		)
Change in the tax status of certain affiliates	(18.1		)	—			—
Transition tax on accumulated foreign earnings	—			(15.1		)	131.0
U.S. tax rate change and other tax reform items	—			9.8			42.5
Repatriation of certain foreign earnings	—			—			(289.7		)
Other	8.3			2.9			(6.8		)
Provision for income taxes	$	146.1		$	311.9		$	197.5

(1)

Reflects the U.S. tax impact of apportioning U.S. expenses against the GILTI and foreign branch baskets in calculating the foreign tax credit limitation resulting in no tax benefit for these expenses due to the Company’s excess foreign tax credit position in the GILTI basket for 2019 and 2018 and foreign branch basket for 2018.

Summary of Components of Net Deferred Income Tax Asset

A summary of the components of the net deferred income tax asset is shown below (in millions):



December 31,	2019			2018
Deferred income tax assets (liabilities):
Tax loss carryforwards	$	419.7		$	420.2
Tax credit carryforwards	294.0			260.6
Retirement benefit plans	59.1			54.2
Accrued liabilities	136.1			136.9
Self-insurance reserves	5.8			5.3
Current asset basis differences	43.7			37.8
Long-term asset basis differences	(65.4		)	(77.7		)
Deferred compensation	27.2			35.9
Recoverable customer engineering, development and tooling	(10.5		)	0.1
Undistributed earnings of foreign subsidiaries	(76.7		)	(75.0		)
Derivative instruments and hedging activities	(5.2		)	0.3
Other	(5.8		)	(2.7		)
	822.0			795.9
Valuation allowance	(344.8		)	(350.4		)
Net deferred income tax asset	$	477.2		$	445.5

Classification of Net Deferred Income Tax Asset

The classification of the net deferred income tax asset is shown below (in millions):



December 31,	2019			2018
Long-term deferred income tax assets	$	563.8		$	528.8
Long-term deferred income tax liabilities	(86.6		)	(83.3		)
Net deferred income tax asset	$	477.2		$	445.5

Summary of Changes in Gross Unrecognized Tax Benefits

A summary of the changes in gross unrecognized tax benefits is shown below (in millions):



For the year ended December 31,	2019			2018			2017
Balance at beginning of period	$	36.7		$	33.2		$	29.5
Additions (reductions) based on tax positions related to current year	(0.3		)	7.9			5.4
Additions (reductions) based on tax positions related to prior years	2.0			0.1			(0.3		)
Settlements	(3.7		)	—			(0.8		)
Statute expirations	(2.8		)	(2.7		)	(2.2		)
Foreign currency translation	(0.3		)	(1.8		)	1.6
Balance at end of period	$	31.6		$	36.7		$	33.2