Annual report pursuant to Section 13 and 15(d)

Income Taxes (Tables)

v3.24.0.1
Income Taxes (Tables)
 12 Months Ended
Dec. 31, 2023
Income Tax Disclosure [Abstract]  
Schedule of Earnings Before Income Taxes by Jurisdiction
The sources of Earnings before income taxes were as follows:
(in millions) 2023 2022 2021
United States $ 364.4  $ 603.2  $ 537.0 
Foreign 264.5  250.4  199.4 
Earnings before income taxes $ 628.9  $ 853.6  $ 736.4 
Schedule of Components of Income Tax Provision (Benefit)
The Income tax provision consisted of the following:
(in millions) 2023 2022 2021
Current tax expense:
U.S. Federal $ 88.7  $ 109.8  $ 84.3 
State and local 17.3  20.3  11.2 
Foreign 73.9  61.1  67.3 
Total current 179.9  191.2  162.8 
Deferred tax expense (benefit):
U.S. Federal 17.2  (24.6) (4.9)
State and local 10.2  1.5  (5.9)
Foreign (11.0) 4.2  (11.0)
Total deferred 16.4  (18.9) (21.8)
Income tax provision $ 196.3  $ 172.3  $ 141.0 
Schedule of Deferred Tax Assets and Liabilities
Temporary differences and carryforwards giving rise to deferred tax assets and liabilities as of December 31, 2023 and 2022 are summarized in the table below:
(in millions) 2023 2022
Deferred tax assets:
Loss carryforwards $ 59.9  $ 56.8 
Tax credit carryforwards 56.1  52.9 
Deferred revenue 38.0  36.3 
Product warranties 35.4  33.6 
Sales incentives and discounts 33.3  29.2 
Operating lease liabilities 29.8  24.4 
Interest expense 17.6  18.0 
Equity compensation 13.1  13.5 
Other 73.2  66.2 
Gross deferred tax assets 356.4  330.9 
Valuation allowance (71.3) (52.8)
Deferred tax assets 285.1  278.1 
Deferred tax liabilities:
Depreciation and amortization (54.5) (81.7)
Operating lease assets (27.6) (21.8)
State and Local income taxes (22.7) (22.7)
Other (5.9) (9.3)
Deferred tax liabilities (110.7) (135.5)
Total net deferred tax assets $ 174.4  $ 142.6 
Reconciliation of Unrecognized Tax Benefits
The following is a reconciliation of the total amounts of unrecognized tax benefits excluding interest and penalties for the 2023, 2022 and 2021 annual reporting periods:
(in millions) 2023 2022 2021
Balance as of January 1 $ 7.5  $ 9.7  $ 3.7 
Gross increases - tax positions prior periods 0.9  0.5  5.9 
Gross decreases - tax positions prior periods —  (2.1) (0.2)
Gross increases - current period tax positions —  —  0.5 
Decreases - settlements with taxing authorities —  (0.6) (0.2)
Balance as of December 31 $ 8.4  $ 7.5  $ 9.7 
Reconciliation of Income Taxes at the Statutory Federal Income Tax Rate to Income Tax Provision (Benefit)
The difference between the actual income tax provision and the tax provision computed by applying the statutory Federal income tax rate to Earnings before income taxes is attributable to the following:
(in millions) 2023 2022 2021
Income tax provision at 21 percent $ 132.1  $ 179.3  $ 154.6 
State and local income taxes, net of federal income tax effect 13.3  19.5  18.0 
Deferred tax asset valuation allowance 17.8  (10.4) (24.2)
Equity compensation (1.3) (2.9) (1.8)
Change in estimates related to prior years and prior years amended tax return filings 1.8  (1.3) 3.5 
Federal and state tax credits (15.2) (16.6) (14.9)
Taxes related to foreign income, net of credits (4.5) 12.1  5.5 
Deferred tax reassessment 2.5  6.4  6.4 
FDII deduction (16.6) (18.4) (15.3)
Intercompany sales of intellectual property rights 53.1  —  — 
Nondeductible loss on intercompany sale 6.9  —  — 
Other 6.4  4.6  9.2 
Actual income tax provision $ 196.3  $ 172.3  $ 141.0 
Effective tax rate 31.2  % 20.2  % 19.1  %