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INCOME TAXES | 12 Months Ended
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Dec. 31, 2024
Income Tax Disclosure [Abstract] |
INCOME TAXES | INCOME TAXES Net deferred tax assets and liabilities consist of the following as of December 31, 2024 and 2023 (in millions):
| As of December 31,
| 2024 |  | 2023
Deferred tax assets: |  |  |
Accrued compensation and benefits | $ | 20.2 |  |  | $ | 19.3 |
Property, equipment and technology, net | 14.6 |  |  | 12.7 |
Investments | — |  |  | 83.7 |
Operating leases | 40.4 |  |  | 42.6 |
Other | 88.7 |  |  | 84.2 |
Subtotal | 163.9 |  |  | 242.5 |
Valuation allowances | (17.0) |  |  | (11.8) |
Total deferred tax assets | 146.9 |  |  | 230.7 |
Deferred tax liabilities: |  |  |
Intangibles | (240.2) |  |  | (384.7) |
Property, equipment and technology, net | (19.0) |  |  | (17.4) |
Investments | (33.8) |  |  | — |
Prepaid expenses or assets | (4.5) |  |  | (4.4) |
Operating leases | (31.9) |  |  | (33.9) |
Total deferred tax liabilities | (329.4) |  |  | (440.4) |
Net deferred tax liabilities | $ | (182.5) |  |  | $ | (209.7) |
The Company provides valuation allowances against deferred tax assets if, based on management’s assessment of historical and projected future operating results and other available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. Valuation allowances of $17.0 million and $11.8 million were recorded against gross deferred tax assets for certain investments, net operating and capital losses as of December 31, 2024 and 2023, respectively. As of December 31, 2024, the Company has capital loss carryforwards of $1.8 million, which, if unused, will expire in 2025 and 2029. The Company also has net operating loss carryforwards of $14.4 million, most of which have an indefinite carryforward period. The Company considers its non-U.S. earnings to be indefinitely reinvested outside of the U.S. to the extent these earnings are not subject to U.S. income tax under an anti-deferral tax regime. As of December 31, 2024, the cumulative amount of undistributed earnings in these subsidiaries is $150.7 million. Given our intent to reinvest these earnings for an indefinite period of time, the Company has not accrued a deferred tax liability on these earnings. A determination of an unrecognized deferred tax liability related to these earnings is not practicable. The provision for income taxes for the years ended December 31, 2024, 2023, and 2022 consists of the following (in millions):
| Year Ended December 31,
| 2024 |  | 2023 |  | 2022
Current tax expense: |  |  |  |  |
Federal | $ | 208.8 |  |  | $ | 188.1 |  |  | $ | 210.4 |
State | 117.7 |  |  | 97.8 |  |  | 130.2 |
Foreign | 16.0 |  |  | 15.5 |  |  | 13.0 |
Total current tax expense | 342.5 |  |  | 301.4 |  |  | 353.6 |
Deferred income tax (benefit) expense: |  |  |  |  |
Federal | (19.5) |  |  | (3.4) |  |  | (126.2) |
State | (2.4) |  |  | 1.5 |  |  | (22.7) |
Foreign | (1.7) |  |  | (13.3) |  |  | (6.8) |
Total deferred income tax benefit | (23.6) |  |  | (15.2) |  |  | (155.7) |
Total | $ | 318.9 |  |  | $ | 286.2 |  |  | $ | 197.9 |
For the years ended December 31, 2024, 2023, and 2022, income before taxes consists of the following (in millions):
| Year Ended December 31,
| 2024 |  | 2023 |  | 2022
U.S. operations | $ | 1,060.2 |  |  | $ | 1,010.5 |  |  | $ | 401.3 |
Foreign operations | 23.6 |  |  | 37.1 |  |  | 31.6 |
Total | $ | 1,083.8 |  |  | $ | 1,047.6 |  |  | $ | 432.9 |
A reconciliation of the statutory federal income tax rate to the effective income tax rate for the years ended December 31, 2024, 2023, and 2022 is as follows:
| Year Ended December 31,
| 2024 |  | 2023 |  | 2022
Statutory U.S. federal income tax rate | 21.0 | % |  | 21.0 | % |  | 21.0 | %
Impact of federal, state and local tax law & rate changes, net | 0.1 | % |  | — | % |  | (0.5) | %
State taxes, net of federal benefit | 4.5 | % |  | 4.3 | % |  | 4.5 | %
Uncertain tax positions | 3.9 | % |  | 2.9 | % |  | 20.6 | %
Deduction for Foreign Derived Intangible Income | (0.4) | % |  | (0.4) | % |  | (1.0) | %
Valuation allowances | 0.4 | % |  | (0.5) | % |  | 0.6 | %
Other, net | (0.1) | % |  | — | % |  | 0.5 | %
Effective income tax rate | 29.4 | % |  | 27.3 | % |  | 45.7 | %
A reconciliation of the beginning and ending unrecognized tax benefits, excluding interest and penalties, is as follows (in millions):
| 2024 |  | 2023 |  | 2022
Balance as of January 1 | $ | 237.5 |  |  | $ | 212.1 |  |  | $ | 162.1 |
Gross increases related to prior year tax positions | 0.2 |  |  | — |  |  | 21.8 |
Gross decreases related to prior year tax positions | (3.1) |  |  | (1.5) |  |  | — |
Gross increases related to current year tax positions | 34.4 |  |  | 31.1 |  |  | 32.9 |
Settlements | (49.9) |  |  | (2.5) |  |  | (3.7) |
Lapse of statute of limitations | — |  |  | (1.7) |  |  | (1.0) |
Balance as of December 31 | $ | 219.1 |  |  | $ | 237.5 |  |  | $ | 212.1 |
As of December 31, 2024, 2023, and 2022, the Company had $173.1 million, $196.6 million, and $177.1 million, respectively, of unrecognized tax benefits, net of federal benefit, which, if recognized in the future, would affect the effective income tax rate. No reductions to unrecognized tax benefits from the lapse of the applicable statutes of limitations and potential audit settlements are expected during the next twelve months. Estimated interest (income) costs and (benefits) penalties are classified as part of the provision for income taxes in the Company's consolidated statements of income and were $(2.5) million, $14.3 million, and $39.1 million, for the periods ended December 31, 2024, 2023, and 2022, respectively. Accrued interest and penalties were $86.0 million, $88.5 million and $74.4 million as of December 31, 2024, 2023, and 2022, respectively. The following table summarizes the tax years that are either currently under audit or remain open and subject to examination by the tax authorities in the most significant jurisdictions in which Cboe operates:
U.S. Federal | 2021-2024
California | 2015-2024
Illinois | 2021-2024
New York | 2015-2024
New York City | 2015-2024
United Kingdom | 2021-2024
Netherlands | 2018-2024
During 2023, the Company reached a settlement with the IRS under which the Company agreed to concede all claimed Section 199 deductions in exchange for concession of the IRS asserted penalties. The Company accordingly remeasured its Section 199 tax reserves and released its reserves associated with penalties and interest thereon during the year.

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