Unrecognized Tax Benefits, Decrease Resulting from Current Period Tax Positions

[Table of Contents](#i96cbbb599c964cb4a125b720672b6568_10)remeasurement of pension and other postretirement benefit obligations. For purposes of assessing the recoverability of deferred tax assets, the Company determined that it could not include future projected earnings in the analysis due to recent history of losses.As of December 31, 2021 and 2020, the Company has recorded valuation allowances of $2,423 and $3,094 primarily for certain federal deferred tax assets, as well as for certain federal and state net operating loss and tax credit carryforwards. To measure the valuation allowance, the Company estimated in what year each of its deferred tax assets and liabilities would reverse using systematic and logical methods to estimate the reversal patterns. Based on these methods, deferred tax liabilities are assumed to reverse and generate taxable income over the next 5 to 10 years while deferred tax assets related to pension and other postretirement benefit obligations are assumed to reverse and generate tax deductions over the next 15 to 20 years. The valuation allowance primarily results from not having sufficient income from deferred tax liability reversals in the appropriate future periods to support the realization of deferred tax assets.During 2021, the Company decreased the valuation allowance by $671. This reflects a tax benefit of $1,206 included in OCI primarily due to the net actuarial gains that resulted from the annual remeasurement of pension assets and liabilities. This was partially offset by tax expense of $512 recorded in continuing operations and an increase of $23 related to the associated federal benefit of state impacts.Until the Company generates sustained levels of profitability, additional valuation allowances may have to be recorded with corresponding adverse impacts on earnings and/or OCI.The Tax Cuts and Jobs Act (TCJA) one-time repatriation tax and Global Intangible Low Tax Income liabilities effectively taxed the undistributed earnings previously deferred from U.S. income taxes. We have not provided for deferred income taxes on the undistributed earnings from certain non-U.S. subsidiaries because such earnings are considered to be indefinitely reinvested. If such earnings were to be distributed, any deferred income taxes would not be significant.As of December 31, 2021 and 2020, the amounts accrued for the payment of income tax-related interest and penalties included in the Consolidated Statements of Financial Position were not significant. The amounts of interest included in the Consolidated Statements of Operations were not significant for the years ended December 31, 2021, 2020 and 2019.A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | 2021 |  | 2020 |  | 2019 |
| Unrecognized tax benefits – January 1 | $966  |  |  | $1,476  |  |  | $2,412  |  |
| Gross increases – tax positions in prior periods | 64  |  |  | 44  |  |  | 100  |  |
| Gross decreases – tax positions in prior periods | (245) |  |  | (581) |  |  | (1,418) |  |
| Gross increases – current period tax positions | 73  |  |  | 136  |  |  | 344  |  |
| Gross decreases – current period tax positions |  |  |  |  | (1) |  |
| Settlements |  |  | (109) |  |  | 39  |  |
| Statute Lapse |  |  |  |  |  |
| Unrecognized tax benefits – December 31 | $858  |  |  | $966  |  |  | $1,476  |  |

As of December 31, 2021, 2020 and 2019, the total amount of unrecognized tax benefits include $790, $734 and $1,287, respectively, that would affect the effective tax rate, if recognized. As of December 31, 2021, these amounts are primarily associated with the amount of research tax credits claimed and various other matters.83
