Annual report pursuant to Section 13 and 15(d)

Income Taxes (Tables)

v3.20.4
Income Taxes (Tables)
12 Months Ended
Dec. 31, 2020
Income Tax Disclosure [Abstract]  
Schedule of Earnings Before Income Taxes by Jurisdiction
The sources of Earnings before income taxes were as follows:
(in millions) 2020 2019 2018
United States $ 354.5  $ 10.1  $ 237.3 
Foreign 118.2  100.6  73.4 
Earnings before income taxes
$ 472.7  $ 110.7  $ 310.7 
Schedule of Components of Income Tax Provision (Benefit)
The Income tax provision consisted of the following:
(in millions) 2020 2019 2018
Current tax expense (benefit):
U.S. Federal $ 66.9  $ 94.5  $ (2.3)
State and local 9.8  6.3  5.7 
Foreign 38.9  29.3  22.9 
Total current 115.6  130.1  26.3 
Deferred tax expense (benefit):
U.S. Federal (17.3) (19.7) 30.5 
State and local 1.1  (29.5) 0.9 
Foreign (1.4) (0.6) (0.4)
Total deferred (17.6) (49.8) 31.0 
Income tax provision $ 98.0  $ 80.3  $ 57.3 
Schedule of Deferred Tax Assets and Liabilities
Temporary differences and carryforwards giving rise to deferred tax assets and liabilities at December 31, 2020 and 2019 are summarized in the table below:
(in millions) 2020 2019
Deferred tax assets:
Loss carryforwards $ 71.2  $ 81.9 
Tax credit carryforwards 51.1  71.8 
Product warranties 28.1  28.4 
Sales incentives and discounts 21.9  25.9 
Compensation and benefits 20.9  10.5 
Deferred revenue 18.1  16.1 
Operating lease liabilities 16.3  17.1 
Equity compensation 12.0  12.0 
Deferred compensation 11.7  10.9 
Postretirement and postemployment benefits 11.0  11.5 
Other 54.3  51.4 
Gross deferred tax assets 316.6  337.5 
Valuation allowance (93.4) (93.3)
Deferred tax assets 223.2  244.2 
Deferred tax liabilities:
Depreciation and amortization (48.0) (85.5)
State and local income taxes (22.7) (24.3)
Operating lease assets (14.9) (15.7)
Other (6.3) (5.3)
Deferred tax liabilities (91.9) (130.8)
Total net deferred tax assets $ 131.3  $ 113.4 
Reconciliation of Unrecognized Tax Benefits
The following is a reconciliation of the total amounts of unrecognized tax benefits excluding interest and penalties for the 2020, 2019 and 2018 annual reporting periods:
(in millions) 2020 2019 2018
Balance at January 1 $ 3.7  $ 2.3  $ 2.1 
Gross increases - tax positions prior periods 0.1  2.0  0.6 
Gross decreases - tax positions prior periods   (0.8) (0.7)
Gross increases - current period tax positions 0.6  0.4  0.4 
Decreases - settlements with taxing authorities (0.1) —  (0.1)
Reductions - lapse of statute of limitations (0.6) (0.2) — 
Balance at December 31 $ 3.7  $ 3.7  $ 2.3 
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) 2020 2019 2018
Income tax provision at 21 percent $ 99.2  $ 23.2  $ 65.2 
State and local income taxes, net of Federal income tax effect 11.6  (3.6) 8.8 
Deferred tax asset valuation allowance (0.2) (3.5) 4.0 
Equity compensation (1.1) (2.9) (3.1)
Change in estimates related to prior years and prior years amended tax return filings 0.9  (2.9) 1.6 
Federal and state tax credits (12.0) (11.6) (11.6)
Taxes related to foreign income, net of credits 0.7  (5.2) (6.5)
Deferred tax reassessment 5.4  1.9  3.3 
Tax law changes   —  (5.2)
FDII deduction (11.4) (5.5) (2.6)
Disproportionate tax effect released from Other comprehensive income   91.4  — 
Other 4.9  (1.0) 3.4 
Actual income tax provision
$ 98.0  $ 80.3  $ 57.3 
Effective tax rate 20.7  % 72.6  % 18.5  %
Income Tax Provision (Benefit) Allocated to Continuing and Discontinued Operations
Income tax provision allocated to continuing operations and discontinued operations for the years ended December 31 was as follows:
(in millions) 2020 2019 2018
Continuing operations $ 98.0  $ 80.3  $ 57.3 
Discontinued operations (0.5) (40.1) 2.6 
Total income tax provision
$ 97.5  $ 40.2  $ 59.9