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Income Taxes
 12 Months Ended
Dec. 31, 2021
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
Income from continuing operations before income taxes and the (provision for) benefit from income taxes consisted of the following:
Year ended December 31,
202120202019
Income from continuing operations:
United States$17.2 $39.6 $52.9 
Foreign52.7 39.0 35.9 
$69.9 $78.6 $88.8 
(Provision for) benefit from income taxes:
Current:
United States$(5.4)$(0.7)$6.8 
Foreign(6.9)(3.8)(5.5)
Total current(12.3)(4.5)1.3 
Deferred and other:
United States0.8 (0.3)(12.8)
Foreign0.6 — (1.0)
Total deferred and other1.4 (0.3)(13.8)
Total provision$(10.9)$(4.8)$(12.5)
The reconciliation of income tax computed at the U.S. federal statutory tax rate to our effective income tax rate was as follows:
Year ended December 31,
202120202019
Tax at U.S. federal statutory rate21.0 %21.0 %21.0 %
State and local taxes, net of U.S. federal benefit0.4 %1.8 %0.8 %
U.S. credits and exemptions(20.4)%(4.4)%(3.3)%
Foreign earnings/losses taxed at different rates12.6 %(4.6)%(2.8)%
Nondeductible expenses3.3 %2.2 %2.5 %
Adjustments to uncertain tax positions(2.4)%(4.4)%(0.5)%
Changes in valuation allowance (1)
47.9 %(0.6)%(1.8)%
Share-based compensation(1.8)%(3.6)%(1.8)%
Capital loss (1)
(42.5)%— %— %
Goodwill impairment and basis adjustments7.3 %— %— %
Statutory rate changes2.1 %— %(0.6)%
Adjustments to contingent consideration(8.9)%— %— %
Other(3.0)%(1.3)%0.6 %
15.6 %6.1 %14.1 %
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(1) During the fourth quarter of 2021, we generated a capital loss in connection with the liquidation of certain recently acquired entities. All but $2.0 of the income tax benefit associated with the capital loss has been reflected in “Gain (loss) from discontinued operations, net of tax” in the accompanying consolidated statement of operations for the year ended December 31, 2021. As such, the capital loss had only a minimal impact on our effective income tax rate for continuing operations during the year ended December 31, 2021.
Significant components of our deferred tax assets and liabilities were as follows:
As of December 31,
20212020
Deferred tax assets:
NOL and credit carryforwards$118.6 $141.0 
Pension, other postretirement and postemployment benefits31.1 36.5 
Payroll and compensation16.3 15.0 
Legal, environmental and self-insurance accruals35.9 22.6 
Working capital accruals17.0 17.1 
Other9.8 8.4 
Total deferred tax assets228.7 240.6 
Valuation allowance(89.8)(92.0)
Net deferred tax assets138.9 148.6 
Deferred tax liabilities:
Intangible assets recorded in acquisitions79.4 65.2 
Basis difference in affiliates19.8 16.3 
Accelerated depreciation13.3 11.9 
Deferred income20.2 29.4 
Other16.8 11.1 
Total deferred tax liabilities149.5 133.9 
$(10.6)$14.7 
General Matters
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. We periodically assess deferred tax assets to determine if they are likely to be realized and the adequacy of deferred tax liabilities, incorporating the results of local, state, federal and foreign tax audits in our estimates and judgments.
At December 31, 2021, we had $352.0 of state and $288.0 of foreign tax loss carryforwards available. We also had federal and state tax credit carryforwards of $8.0. Of these amounts, $41.9 expire in 2022 and $310.7 expire at various times between 2023 and 2040. The remaining carryforwards have no expiration date.
Realization of deferred tax assets, including those associated with net operating loss and credit carryforwards, is dependent upon generating sufficient taxable income in the appropriate tax jurisdiction. We believe that it is more likely than not that we may not realize the benefit of certain of these deferred tax assets and, accordingly, have established a valuation allowance against these deferred tax assets. Although realization is not assured for the remaining deferred tax assets, we believe it is more likely than not that the deferred tax assets will be realized through future taxable earnings or tax planning strategies. However, deferred tax assets could be reduced in the near term if our estimates of taxable income are significantly reduced or tax planning strategies are no longer viable. Our valuation allowance decreased by $2.2 in 2021 and by $1.6 in 2020. The 2021 decrease was primarily driven by the utilization of state attributes in connection with our sale of Transformer Solutions. As previously indicated, we recorded an income tax benefit associated with the capital loss that was generated from the liquidation of certain recently acquired entities, with $2.0 recorded to continuing operations and the remainder to discontinued operations. As such, the capital loss had no net impact to our valuation allowance during the year ended December 31, 2021.

The amount of income tax that we pay annually is dependent on various factors, including the timing of certain deductions. These deductions can vary from year-to-year, and, consequently, the amount of income taxes paid in future years will vary from the amounts paid in prior years.
Undistributed Foreign Earnings
In general, it is our practice and intention to reinvest the earnings of our non-U.S. subsidiaries in those operations. As of December 31, 2021, we have $172.0 of undistributed earnings of our foreign subsidiaries. The majority of these earnings have already been reinvested in our overseas businesses.  Further, we believe future domestic cash generation will be sufficient to meet future domestic cash needs.  For this reason, we have not recorded a provision for U.S. or foreign withholding taxes on the excess of the amount for financial reporting over the tax basis of investments in foreign subsidiaries that are essentially permanent in duration. Generally, such amounts may become subject to U.S. taxation upon the remittance of dividends and under certain other circumstances. It is not practicable to estimate the amount of a deferred tax liability related to the undistributed earnings of our foreign subsidiaries in the event that these earnings are no longer considered to be indefinitely reinvested, due to the hypothetical nature of the calculation.
Unrecognized Tax Benefits
As of December 31, 2021, we had gross and net unrecognized tax benefits of $7.1 and $6.4, respectively. All of these net unrecognized tax benefits would impact our effective tax rate from continuing operations if recognized. Similarly, at December 31, 2020 and 2019, we had gross unrecognized tax benefits of $13.6 (net unrecognized tax benefits of $11.0) and $17.2 (net unrecognized tax benefits of $13.9), respectively.
We classify interest and penalties related to unrecognized tax benefits as a component of our income tax (provision) benefit. As of December 31, 2021, gross accrued interest totaled $2.6 (net accrued interest of $2.2), while the related amounts as of December 31, 2020 and 2019 were $3.8 (net accrued interest of $3.0) and $4.1 (net accrued interest of $3.2), respectively. Our income tax (provision) benefit for the years ended December 31, 2021, 2020 and 2019 included gross interest income (expense) of $1.0, $0.2, and $(0.5), respectively, resulting from adjustments to our liability for uncertain tax positions. As of December 31, 2021, 2020 and 2019, we had no accrual for penalties included in our unrecognized tax benefits.
Based on the outcome of certain examinations or as a result of the expiration of statutes of limitations for certain jurisdictions, we believe that within the next 12 months it is reasonably possible that our previously unrecognized tax benefits could decrease by up to $5.0. The previously unrecognized tax benefits relate to a variety of tax matters including transfer pricing and various state matters.
The aggregate changes in the balance of unrecognized tax benefits for the years ended December 31, 2021, 2020 and 2019 were as follows:
Year ended December 31,
202120202019
Unrecognized tax benefit — opening balance$13.6 $17.2 $20.3 
Gross increases — tax positions in prior period0.7 0.3 1.1 
Gross decreases — tax positions in prior period(6.4)(2.2)(0.8)
Gross increases — tax positions in current period0.2 0.2 0.2 
Settlements— (0.3)(2.1)
Lapse of statute of limitations(1.1)(1.7)(1.5)
Change due to foreign currency exchange rates0.1 0.1 — 
Unrecognized tax benefit — ending balance$7.1 $13.6 $17.2 
Other Tax Matters
During 2021, our income tax provision was impacted most significantly by (i) earnings in jurisdictions with lower statutory tax rates, (ii) $4.3 of income tax benefits related to various valuation allowance adjustments, primarily due to foreign tax credits for which the future realization is now considered likely, and (iii) a benefit of $3.5 related to the resolution of certain liabilities for uncertain tax positions and interest associated with various refund claims, partially offset by $13.2 of tax expense associated with global intangible low-taxed income created by the liquidation of various recently acquired entities.

During 2020, our income tax provision was impacted most significantly by (i) earnings in jurisdictions with lower statutory tax rates, (ii) $4.2 of tax benefits related to various audit settlements, statute expirations, and other adjustments to liabilities for uncertain tax positions, and (iii) $2.8 of excess tax benefits resulting from stock-based compensation awards that vested and/or were exercised during the year.

During 2019, our income tax provision was impacted most significantly by (i) $1.6 of excess tax benefits resulting from stock-based compensation awards that vested and/or were exercised during the year, (ii) $1.3 of tax benefits related to our U.S. tax credits and incentives, and (iii) $1.2 of tax benefits related to various audit settlements, statute expirations, and other adjustments to liabilities for uncertain tax positions.
We perform reviews of our income tax positions on a continuous basis and accrue for potential uncertain positions when we determine that a tax position meets the criteria of the Income Taxes Topic of the Codification. Accruals for these uncertain tax positions are recorded in “Income taxes payable” and “Deferred and other income taxes” in the accompanying consolidated balance sheets based on the expectation as to the timing of when the matters will be resolved. As events change and resolutions occur, these accruals are adjusted, such as in the case of audit settlements with taxing authorities.
The Internal Revenue Service (“IRS”) concluded its audit of our 2013, 2014, 2015, 2016 and 2017 federal income tax returns. In connection with such, we recorded a tax benefit of $2.2 during 2021 related to the resolution of certain liabilities for uncertain tax positions and interest associated with various refund claims.
State income tax returns generally are subject to examination for a period of three to five years after filing the respective tax returns. The impact on such tax returns of any federal changes remains subject to examination by various states for a period of up to one year after formal notification to the states. We have various state income tax returns in the process of examination. We believe any uncertain tax positions related to these examinations have been adequately provided for.
We have various foreign income tax returns under examination. The most significant of these are in Germany for the 2010 through 2014 tax years. We believe that any uncertain tax positions related to these examinations have been adequately provided for.
An unfavorable resolution of one or more of the above matters could have a material adverse effect on our results of operations or cash flows in the quarter and year in which an adjustment is recorded or the tax is due or paid. As audits and examinations are still in process, the timing of the ultimate resolution and any payments that may be required for the above matters cannot be determined at this time.
Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”)
On March 27, 2020, the CARES Act was enacted into law and provides changes to various tax laws that impact businesses. We do not believe these changes impact our current and deferred income tax balances; therefore, no resulting adjustments have been recorded to such balances as of December 31, 2021 and 2020.
As provided within the CARES Act, we are deferring payments of our social security payroll taxes, for the period March 27, 2020 to December 31, 2020, with such deferral totaling $3.5 as of December 31, 2021. One-half of the deferred amount was paid in 2021, with the remainder required to be paid in 2022.