Income Taxes

12 Months Ended

Dec. 31, 2022

Income Taxes [Abstract]

Income Taxes

Note 8.  Income Taxes

Income from operations before provision for taxes by domestic and foreign source is as follows:

	Year Ended December 31,
(millions of dollars)	2022		2021		2020
Income from operations before income taxes and income from affiliates and joint ventures:
Domestic	$	39.3	$	66.0	$	21.4
Foreign		117.4		136.3		116.6
	$	156.7	$	202.3	$	138.0

The provision (benefit) for taxes on income consists of the following:

	Year Ended December 31,
(millions of dollars)	2022			2021			2020
Domestic
Taxes currently payable
Federal	$	16.3		$	(5.3	)	$	(7.1	)
State and local		3.3			0.4			0.2
Deferred income taxes		(16.0	)		7.8			2.2
Domestic tax provision (benefit)		3.6			2.9			(4.7	)
Foreign
Taxes currently payable		29.8			33.4			34.0
Deferred income taxes		(1.3	)		0.3			(4.9	)
Foreign tax provision		28.5			33.7			29.1
Total tax provision (benefit)	$	32.1		$	36.6		$	24.4

The provision (benefit) for taxes on income shown in the previous table is classified based on the location of the taxing authority, regardless of the location in which the taxable income is generated.

The major elements contributing to the difference between the U.S. federal statutory tax rate and the consolidated effective tax rate are as follows:

	Year Ended December 31,
	2022			2021			2020
U.S. statutory rate		21.0	%		21.0	%		21.0	%
Depletion		(6.1	)%		(5.4	)%		(6.2	)%
Difference between tax provided on foreign earnings and the U.S. statutory rate		2.4	%		2.6	%		3.3	%
Global Intangible Low-Tax Income (GILTI)		2.3	%		0.7	%		0.4	%
Foreign Derived Intangible Income		—			(1.4	)%		(1.0	)%
State and local taxes, net of federal tax benefit		(0.4	)%		0.7	%		—
Tax credits and foreign dividends		(0.4	)%		(0.4	)%		(0.6	)%
Impact of uncertain tax positions		(1.3	)%		(1.1	)%		(0.2	)%
Impact of officer's non-deductible compensation		1.3	%		0.8	%		1.0	%
Other		1.7	%		0.6	%		—
Consolidated effective tax rate		20.5	%		18.1	%		17.7	%

The Company believes that its accrued liabilities are sufficient to cover its U.S. and foreign tax contingencies. The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities are presented below:

	December 31,
(millions of dollars)	2022			2021
Deferred tax assets attributable to:
Accrued liabilities	$	28.6		$	29.7
Net operating loss carry forwards		35.5			31.8
Pension and post-retirement benefits costs		18.6			31.4
Other		29.7			22.4
Valuation allowance		(24.0	)		(22.3	)
Total deferred tax assets		88.4			93.0
Deferred tax liabilities attributable to:
Plant and equipment, principally due to differences in depreciation		167.0			178.8
Intangible assets		67.8			69.3
Other		9.6			10.0
Total deferred tax liabilities		244.4			258.1
Net deferred tax asset (liability)	$	(156.0	)	$	(165.1	)

Net deferred tax assets and net deferred tax liabilities are as follows:

	December 31,
(millions of dollars)	2022			2021
Net deferred tax asset, long-term	$	24.4		$	23.0
Net deferred tax liability, long-term		180.4			188.1
Net deferred tax liability, long-term	$	(156.0	)	$	(165.1	)

The Company has $35.5 million of deferred tax assets arising from tax loss carry forwards which will be realized through future operations. Carry forwards of approximately $20.0 million expire over the next 20 years, and $15.5 million can be utilized over an indefinite period.

On December 31, 2022, the Company had $2.6 million of total unrecognized tax benefits. Included in this amount were a total of $2.0 million of unrecognized income tax benefits that, if recognized, would affect the Company's effective tax rate. While it is expected that the amount of unrecognized tax benefits will change in the next 12 months, we do not expect the change to have a significant impact on the results of operations or the financial position of the Company.

The following table summarizes the activity related to our unrecognized tax benefits:

(millions of dollars)	2022			2021
Balance at beginning of the year	$	5.1		$	7.6
Increases related to current year tax positions		0.4			0.6
Increases related to new judgments		—			0.2
Decreases related to audit settlements and statute expirations		(2.9	)		(3.3	)
Balance at the end of the year	$	2.6		$	5.1

The Company's accounting policy is to recognize interest and penalties accrued, relating to unrecognized income tax benefits as part of its provision for income taxes. The Company recorded a benefit of $0.7 million in interest and penalties during 2022 and had a total accrued balance on December 31, 2022 of $0.4 million.

The Company operates in multiple taxing jurisdictions, both within and outside the U.S. In certain situations, a taxing authority may challenge positions that the Company has adopted in its income tax filings. The Company, with a few exceptions (none of which are material), is no longer subject to U.S. federal, state, local, and international income tax examinations by tax authorities for years prior to 2015.

Net cash paid for income taxes were $44.0 million, $42.5 million and $28.5 million for the years ended December 31, 2022, 2021 and 2020, respectively.

The Company had approximately $478.2 million of foreign subsidiaries' undistributed earnings as of December 31, 2022. We intend to continue to permanently reinvest these earnings overseas for the foreseeable future and while U.S. federal tax expense has been recognized as a result of U.S. Tax Reform, no deferred tax liabilities with respect to foreign withholding taxes or state taxes have been recognized.