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Income Taxes | 12 Months Ended
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Dec. 31, 2022
Income Tax Disclosure [Abstract] |
Income Taxes | 11. Income Taxes The components of income before taxes are as follows:
|  | 2022 |  |  | 2021 |  |  | 2020 |
Domestic |  | $ | 447.1 |  |  | $ | 958.6 |  |  | $ | 921.6 |
Foreign |  |  | 76.2 |  |  |  | 73.1 |  |  |  | 52.2 |
Total |  | $ | 523.3 |  |  | $ | 1,031.7 |  |  | $ | 973.8 |
The following table summarizes the provision for U.S. federal, state and foreign income taxes:
|  | 2022 |  |  | 2021 |  |  | 2020 |
Current: |  |  |  |  |  |  |  |  |
U.S. federal |  | $ | 162.0 |  |  | $ | 130.6 |  |  | $ | 114.2 |
State |  |  | 44.8 |  |  |  | 34.1 |  |  |  | 32.1 |
Foreign |  |  | 20.3 |  |  |  | 19.2 |  |  |  | 15.9 |
|  |  | 227.1 |  |  |  | 183.9 |  |  |  | 162.2 |
Deferred: |  |  |  |  |  |  |  |  |
U.S. federal |  |  | (78.8 | ) |  |  | 16.5 |  |  |  | 22.9 |
State |  |  | (38.3 | ) |  |  | 4.5 |  |  |  | 4.2 |
Foreign |  |  | (0.6 | ) |  |  | (0.7 | ) |  |  | (1.4 | )
|  |  | (117.7 | ) |  |  | 20.3 |  |  |  | 25.7 |
Total provision |  | $ | 109.4 |  |  | $ | 204.2 |  |  | $ | 187.9 |
Deferred tax assets (liabilities) consist of the following at December 31:
|  | 2022 |  |  | 2021 |
Deferred tax assets: |  |  |  |  |  |
Accounts receivable |  | $ | 8.9 |  |  | $ | 8.6 |
Deferred compensation |  |  | 46.9 |  |  |  | 52.0 |
Pension, postretirement and postemployment benefits |  |  | 5.0 |  |  |  | 6.1 |
Other (including reserves) |  |  | 16.1 |  |  |  | 23.3 |
Sec 174 R&D Capitalization |  |  | 22.0 |  |  | 0.0 |
Tax credit carryforwards/other tax attributes |  |  | 2.8 |  |  |  | 2.9 |
International operating loss carryforwards |  |  | 8.8 |  |  |  | 8.2 |
Interest rate swaps |  | 0.0 |  |  |  | 10.3 |
Total gross deferred tax assets |  |  | 110.5 |  |  |  | 111.4 |
Valuation allowances |  |  | (9.4 | ) |  |  | (13.1 | )
Total deferred tax assets |  |  | 101.1 |  |  |  | 98.3 |
Deferred tax liabilities: |  |  |  |  |  |
Goodwill |  |  | (272.1 | ) |  |  | (270.2 | )
Trade names and other intangibles |  |  | (504.5 | ) |  |  | (508.5 | )
Property, plant and equipment |  |  | (74.2 | ) |  |  | (55.5 | )
Interest rate swaps |  |  | (4.5 | ) |  | 0.0 |
Total deferred tax liabilities |  |  | (855.3 | ) |  |  | (834.2 | )
Net deferred tax liability |  | $ | (754.2 | ) |  | $ | (735.9 | )
Long term net deferred tax asset |  |  | 2.8 |  |  |  | 9.2 |
Long term net deferred tax liability |  |  | (757.0 | ) |  |  | (745.1 | )
Net deferred tax liability |  | $ | (754.2 | ) |  | $ | (735.9 | )
The difference between tax expense and the tax that would result from the application of the federal statutory rate is as follows:
|  | 2022 |  |  | 2021 |  |  | 2020 |
Statutory rate |  |  | 21 | % |  |  | 21 | % |  |  | 21 | %
Tax that would result from use of the federal statutory rate |  | $ | 109.9 |  |  | $ | 216.6 |  |  | $ | 204.5 |
State and local income tax, net of federal effect |  |  | 5.2 |  |  |  | 30.5 |  |  |  | 28.7 |
Varying tax rates of foreign affiliates |  |  | 2.9 |  |  |  | 2.6 |  |  |  | 2.8 |
Valuation Allowances |  |  | (4.1 | ) |  |  | (8.5 | ) |  |  | 2.9 |
Stock Options Exercised |  |  | (5.2 | ) |  |  | (29.0 | ) |  |  | (29.4 | )
Reserve for Uncertain Tax Position |  |  | (0.9 | ) |  |  | 0.0 |  |  |  | (10.6 | )
Other |  |  | 1.6 |  |  |  | (8.0 | ) |  |  | (11.0 | )
Recorded tax expense |  | $ | 109.4 |  |  | $ | 204.2 |  |  | $ | 187.9 |
Effective tax rate |  |  | 20.9 | % |  |  | 19.8 | % |  |  | 19.3 | %
At December 31, 2022, certain foreign subsidiaries of the Company had net operating loss carryforwards of approximately $27.2. The net operating loss carryforwards are not subject to expiration. The Company believes that it is more likely than not that the benefit from these net operating loss carryforwards will not be realized. In recognition of this risk, the Company has provided a valuation allowance of $8.9 and $8.1 at December 31, 2022 and 2021, respectively, on the deferred tax asset relating to these net operating loss carryforwards. The Company also believes that it is more likely than not that the benefit from certain additional deferred tax assets of a foreign subsidiary will not be realized. In recognition of this risk, the Company maintains a valuation allowance of $0.5 and $0.9 at December 31, 2022 and 2021, respectively, on these deferred tax assets. As of December 31, 2020 the Company maintained a valuation allowance of $12.6 relating to certain foreign tax credit carryforwards. During 2021, the Company determined that it was able to utilize approximately $8.5 in foreign tax credits in 2018, 2019, and 2020, resulting in a reduction in the valuation allowance, and a corresponding tax benefit. Accordingly, the Company filed amended returns with the IRS claiming refunds for 2018 and 2019, totaling $6.5, and utilized $2.0 of foreign tax credits in 2020. During 2022, the Company determined that it was able to utilize the remaining foreign tax credit carryforwards in 2022 and future years. This resulted in a reduction of the remaining valuation allowance and a corresponding tax benefit of approximately $4.0. The Company does not have any undistributed earnings of foreign subsidiaries that are considered to be indefinitely reinvested outside of the U.S. The Company has recorded liabilities in connection with uncertain tax positions, which, although supportable by the Company, may be challenged by tax authorities. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
|  | 2022 |  |  | 2021 |  |  | 2020 |
Unrecognized tax benefits at January 1 |  | $ | 4.7 |  |  | $ | 7.3 |  |  | $ | 18.9 |
Gross increases - tax positions in current period |  |  | 2.4 |  |  |  | 0.3 |  |  |  | 0.0 |
Gross increases - tax positions in prior period |  | 0.0 |  |  |  | 0.8 |  |  |  | 1.6 |
Gross decreases - tax positions in prior period |  |  | (0.1 | ) |  |  | 0.0 |  |  |  | (11.8 | )
Decreases due to settlements and payments |  | 0.0 |  |  |  | 0.0 |  |  |  | (1.4 | )
Lapse of statute of limitations |  |  | (1.2 | ) |  |  | (3.7 | ) |  |  | 0.0 |
Unrecognized tax benefits at December 31 |  | $ | 5.8 |  |  | $ | 4.7 |  |  | $ | 7.3 |
During 2020 the Company reached a settlement with the IRS for $1.4 relating to the worthless stock deduction and released the related $12.0 reserve, which resulted in a $10.6 income tax benefit. Included in the balance of unrecognized tax benefits at December 31, 2022, 2021 and 2020 are $4.8, $4.1 and $6.2, respectively, of tax benefits that, if recognized, would affect the effective tax rate. Also included in the balance of unrecognized tax benefits at December 31, 2022, 2021 and 2020 are $1.0, $0.6 and $1.1, respectively, of tax benefits that, if recognized, would result in adjustments to deferred taxes. The Company is subject to U.S. federal income tax as well as income tax in multiple state and international jurisdictions. The Company’s U.S. federal income tax returns are closed for tax years through 2018. The Company is currently under audit by several state taxing authorities for the years 2016 through 2020. It is reasonably possible that a decrease of approximately $0.7 in the unrecognized tax benefits may occur within the next twelve months related to the settlement of these audits or the lapse of applicable statutes of limitations. The Company’s policy for recording interest associated with income tax examinations is to record interest as a component of Income before Income Taxes. During the twelve months ended December 31, 2022, 2021, and 2020, the Company recognized interest expense associated with uncertain tax positions of approximately $0.1, $0.5 and $0.4, respectively. As of December 31, 2022, 2021, and 2020, the Company had accrued interest expense related to unrecognized tax benefits of $0.7, $0.5 and $1.0, respectively. On August 16, 2022, President Biden signed into law the Inflation Reduction Act of 2022 (the “Act”), which contains provisions effective January 1, 2023, including a 15% corporate minimum tax and a 1% excise tax on stock buybacks. While we are still evaluating the impact of the Act, we do not expect any material changes on our consolidated financial position, results of operations or cash flows.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI https://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI https://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI https://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
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