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Income Taxes | 12 Months Ended
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Dec. 31, 2024
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes Earnings before income taxes for the years ended December 31, 2024, 2023, and 2022 consisted of the following components:
| 2024 |  | 2023 |  | 2022
United States | $ | 1,701.7 |  |  | $ | 1,480.3 |  |  | $ | 1,026.4 |
Other | 265.5 |  |  | 262.8 |  |  | 255.6 |
Earnings before income taxes | $ | 1,967.2 |  |  | $ | 1,743.1 |  |  | $ | 1,282.0 |
Components of income tax expense for the years ended December 31, 2024, 2023, and 2022 were as follows:
| 2024 |  | 2023 |  | 2022
Current: |  |  |  |  |
Federal | $ | 317.8 |  |  | $ | 352.6 |  |  | $ | 322.9 |
State | 101.7 |  |  | 80.7 |  |  | 80.8 |
Foreign | 78.0 |  |  | 69.9 |  |  | 65.9 |
Deferred: |  |  |  |  |
Federal | (42.8) |  |  | (94.1) |  |  | (136.9) |
State | (15.9) |  |  | (27.7) |  |  | (31.1) |
Foreign | (20.9) |  |  | (6.7) |  |  | (5.2) |
Income tax expense | $ | 417.9 |  |  | $ | 374.7 |  |  | $ | 296.4 |
Reconciliations between the U.S. federal statutory income tax rate and the effective income tax rate for the years ended December 31, 2024, 2023, and 2022 were as follows:
| 2024 |  | 2023 |  | 2022
Federal statutory tax rate | 21.0 | % |  | 21.0 | % |  | 21.0 | %
Foreign operations, net | 0.6 |  |  | 0.5 |  |  | 0.8 |
R&D tax credits | (2.0) |  |  | (1.9) |  |  | (3.0) |
State taxes, net of federal benefit | 3.6 |  |  | 3.5 |  |  | 3.7 |
Stock-based compensation | (1.0) |  |  | (1.5) |  |  | (1.0) |
Changes in valuation allowances | (1.4) |  |  | (0.4) |  |  | — |
Legal entity restructuring | — |  |  | — |  |  | 0.8 |
Other, net | 0.4 |  |  | 0.3 |  |  | 0.8 |
Effective tax rate | 21.2 | % |  | 21.5 | % |  | 23.1 | %
The deferred income tax balance sheet accounts arise from temporary differences between the amount of assets and liabilities recognized for financial reporting and tax purposes. Components of deferred tax assets and liabilities at December 31 were as follows:
| 2024 |  | 2023
Deferred tax assets: |  |  |
Reserves and accrued expenses | $ | 243.6 |  |  | $ | 223.2 |
Net operating loss carryforwards | 94.6 |  |  | 80.2 |
R&D credits | 12.6 |  |  | 7.6 |
Capitalized R&D expenditures | 271.1 |  |  | 178.7 |
Interest expense limitation carryforwards | 49.3 |  |  | 31.0 |
Lease liabilities | 50.8 |  |  | 47.1 |
Valuation allowances | (8.9) |  |  | (34.8) |
Total deferred tax assets | $ | 713.1 |  |  | $ | 533.0 |
Deferred tax liabilities: |  |  |
Reserves and accrued expenses | $ | 13.1 |  |  | $ | 10.8 |
Amortizable intangible assets | 1,985.2 |  |  | 1,752.8 |
Plant and equipment | 11.8 |  |  | 7.5 |
Accrued tax on unremitted foreign earnings | 9.7 |  |  | 8.8 |
Right-of-use assets | 48.7 |  |  | 44.7 |
Outside basis difference in Indicor | 221.1 |  |  | 189.3 |
Total deferred tax liabilities | $ | 2,289.6 |  |  | $ | 2,013.9 |
As of December 31, 2024, the Company has $51.2 of tax-effected U.S. federal net operating loss carryforwards and $44.5 of tax-effected state net operating loss carryforwards without regard for federal benefit of state. The majority of the net operating loss carryforwards are subject to limitation under the Internal Revenue Code of 1986, as amended (“IRC”) Section 382. As of December 31, 2024, the Company has $8.2 of tax-effected foreign net operating loss carryforwards, certain of which are subject to limitation. Additionally, as of December 31, 2024, the Company has $49.3 of IRC Section 163(j) interest expense limitation carryforwards which have an indefinite carryforward period. As of December 31, 2024, the Company has a $271.1 deferred tax asset related to taxpayer requirements to capitalize and amortize research and development (“R&D”) expenditures under IRC Section 174. The Company amortizes these costs for tax purposes over five years if the R&D was performed in the U.S. and over 15 years if the R&D was performed outside of the U.S. The Company has a deferred tax liability of $221.1 in outside basis difference as of December 31, 2024 associated with the retained minority equity interest in Indicor. See Note 10 for additional information on this minority equity interest. As of December 31, 2024, the Company determined that total valuation allowances of $8.9 were necessary to reduce U.S. federal and state deferred tax assets by $5.1 and foreign deferred tax assets by $3.8, where it was more likely than not that all such deferred tax assets will not be realized. During 2024, the Company’s net decrease in total valuation allowances was $25.9. As of December 31, 2024, the Company believes it is more likely than not that the remaining net deferred tax assets will be realized based on the Company’s estimate of future taxable income and any applicable tax planning strategies within various tax jurisdictions. The Company recognizes in the Consolidated Financial Statements only those tax positions determined to be “more likely than not” of being sustained upon examination based on the technical merits of the positions. Reconciliations of the beginning and ending amounts of unrecognized tax benefits are as follows:
| 2024 |  | 2023 |  | 2022
Beginning balances | $ | 35.6 |  |  | $ | 29.0 |  |  | $ | 40.5 |
Additions for tax positions of prior periods | 1.2 |  |  | 4.3 |  |  | — |
Additions for tax positions of the current period | 0.9 |  |  | 4.3 |  |  | 2.3 |
Reductions for tax positions of prior periods | (3.5) |  |  | — |  |  | (11.2) |
Reductions attributable to lapses of applicable statutes of limitations | (5.1) |  |  | (2.0) |  |  | (2.6) |
Reductions attributable to settlements with taxing authorities | (1.2) |  |  | — |  |  | — |
Ending balances | $ | 27.9 |  |  | $ | 35.6 |  |  | $ | 29.0 |
As of December 31, 2024, the total amount of unrecognized tax benefits that, if recognized, would impact the effective tax rate is $27.9. Interest and penalties related to unrecognized tax benefits were $1.2 in 2024 and are classified as a component of income tax expense. Accrued interest and penalties were $7.8 at December 31, 2024 and $6.6 at December 31, 2023. During the next twelve months, it is reasonably possible that the unrecognized tax benefits may decrease by a net amount of $8.7, mainly due to anticipated statute of limitations lapses in various jurisdictions. The Company and its subsidiaries are subject to examinations for U.S. federal income tax as well as income tax in various state, city, and foreign jurisdictions. The Company’s federal income tax returns for 2021 through the current period remain open to examination and the relevant state, city, and foreign statutes vary. The Company does not expect the assessment of any significant additional tax in excess of amounts reserved. The Company intends to distribute all historical unremitted foreign earnings up to the amount of excess foreign cash, as well as all future foreign earnings that can be repatriated without incremental U.S. federal tax cost. Any remaining outside basis differences relating to the Company’s investment in foreign subsidiaries are not expected to be material and will be reinvested indefinitely.

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