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Income Taxes | 12 Months Ended
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Dec. 31, 2021
Income Tax Disclosure [Abstract] |
Income Taxes | INCOME TAXES The following table summarizes the income tax expense from continuing operations:
| For the Years Ended December 31,
(in millions) | 2022 |  | 2021 |  | 2020
Current tax expense: |  |  |  |  |
Federal | $ | 24.0 |  |  | $ | 14.7 |  |  | $ | 16.4 |
Foreign | 4.1 |  |  | 5.0 |  |  | 1.4 |
State and local | 6.6 |  |  | 4.0 |  |  | 5.1 |
Total current tax expense | 34.7 |  |  | 23.7 |  |  | 22.9 |
Deferred tax (benefit) expense: |  |  |  |  |
Federal | (3.5) |  |  | 0.4 |  |  | 2.7 |
Foreign | (0.1) |  |  | 1.5 |  |  | 3.1 |
State and local | (0.6) |  |  | (8.6) |  |  | (0.2) |
Total deferred tax (benefit) expense | (4.2) |  |  | (6.7) |  |  | 5.6 |
Total income tax expense | $ | 30.5 |  |  | $ | 17.0 |  |  | $ | 28.5 |
The following table summarizes the differences between the statutory federal income tax rate and the effective income tax rate from continuing operations:
| For the Years Ended December 31,
| 2022 |  | 2021 |  | 2020
Statutory federal income tax rate | 21.0 | % |  | 21.0 | % |  | 21.0 | %
State income taxes, net of federal tax benefit | 4.0 |  |  | 3.4 |  |  | 3.5 |
Valuation allowance | (2.3) |  |  | (2.9) |  |  | 0.1 |
Remeasurement of deferred taxes | (0.6) |  |  | (2.8) |  |  | — |
Tax reserves | — |  |  | 0.1 |  |  | (0.1) |
Tax credits | (0.3) |  |  | (0.4) |  |  | (0.3) |
Foreign tax rate effects | 0.6 |  |  | 1.2 |  |  | 0.8 |
Excess tax benefits from stock compensation activity | (1.6) |  |  | (4.8) |  |  | (2.9) |
Other, net | (0.6) |  |  | (0.3) |  |  | 0.8 |
Effective income tax rate | 20.2 | % |  | 14.5 | % |  | 22.9 | %
The following table summarizes income before income taxes from continuing operations:
| For the Years Ended December 31,
(in millions) | 2022 |  | 2021 |  | 2020
U.S. | $ | 132.1 |  |  | $ | 94.8 |  |  | $ | 107.4 |
Non-U.S. | 18.8 |  |  | 22.8 |  |  | 17.2 |
Income before income taxes | $ | 150.9 |  |  | $ | 117.6 |  |  | $ | 124.6 |
Summary The Company recognized income tax expense of $30.5 million for the year ended December 31, 2022, compared to $17.0 million for the year ended December 31, 2021. The increase in income tax expense in the current year was primarily due to higher earnings, a $3.2 million reduction in the amount of excess tax benefits from stock compensation activity compared to the prior year, and fewer discrete tax benefits than in the prior year. In the year ended December 31, 2022, the Company recognized a $2.6 million tax benefit from the release of a valuation allowance that had previously been recorded against deferred tax assets associated with foreign tax credits in the U.S., which are now considered more-likely-than-not to be realized, primarily due to tax planning. The Company also recognized a $1.1 million tax benefit during the current year associated with the release of a valuation allowance in the U.K., as the associated deferred tax assets are now considered more-likely-than-not to be realized primarily due to increased projections of future taxable income. In the year ended December 31, 2021, the Company recognized a $3.4 million tax benefit associated with the release of state valuation allowances and a $3.3 million tax benefit associated with the remeasurement of deferred taxes for changes in state tax apportionment, both of which primarily resulted from a change in tax status and other tax planning activities executed during the year. Including these items, the Company’s effective tax rate for the year ended December 31, 2022 was 20.2%, compared to 14.5% in 2021. The Company recognized income tax expense of $17.0 million for the year ended December 31, 2021, compared to $28.5 million for the year ended December 31, 2020. The reduction in income tax expense in 2021 was primarily due to the recognition of a $3.4 million tax benefit associated with the release of state valuation allowances and a $3.3 million tax benefit associated with the remeasurement of deferred taxes for changes in state tax apportionment, both of which primarily resulted from a change in tax status and other tax planning activities executed during the year, a $2.0 million increase in excess tax benefits from stock compensation activity and the effects of lower pre-tax earnings. Including these items, the Company’s effective tax rate for the year ended December 31, 2021 was 14.5%, compared to 22.9% in 2020. The Company paid income taxes of $26.9 million in 2022, $35.5 million in 2021 and $22.3 million in 2020. Deferred Taxes The following table summarizes deferred income tax assets and liabilities of the Company’s continuing operations:
(in millions) | 2022 |  | 2021
Deferred tax assets: |  |  |
Properties and equipment | $ | 3.5 |  |  | $ | 2.8 |
Accrued expenses | 28.7 |  |  | 24.7 |
Stock-based compensation | 3.5 |  |  | 3.3 |
Net operating loss and tax credit carryforwards | 18.0 |  |  | 19.4 |
Goodwill and intangibles | 0.9 |  |  | 1.8 |
Pension benefits | 14.8 |  |  | 15.1 |
Gross deferred tax assets | 69.4 |  |  | 67.1 |
Valuation allowance | (1.0) |  |  | (5.1) |
Total deferred tax assets | 68.4 |  |  | 62.0 |
Deferred tax liabilities: |  |  |
Properties and equipment | (35.4) |  |  | (31.2) |
Pension benefits | (10.1) |  |  | (9.2) |
Goodwill and intangibles | (63.1) |  |  | (64.4) |
Other | (1.9) |  |  | (1.9) |
Gross deferred tax liabilities | (110.5) |  |  | (106.7) |
Net deferred tax liabilities | $ | (42.1) |  |  | $ | (44.7) |
The deferred tax asset for net operating loss and tax credit carryforwards at December 31, 2022 includes state net operating loss carryforwards of $5.4 million and state income tax credits of $0.3 million, both of which will begin to expire in 2023, foreign net operating loss carryforwards of $9.7 million, which will begin to expire in 2025, and U.S. foreign tax credits of $2.6 million, which will begin to expire in 2023. As previously described within, the Company expects to utilize the U.S. foreign tax credits prior to expiration, primarily as a result of tax planning. The deferred tax asset for tax loss and tax credit carryforwards at December 31, 2021, included state net operating loss carryforwards of $6.5 million, state income tax credits of $0.3 million, foreign net operating loss carryforwards of $9.8 million, and U.S. foreign tax credits of $2.8 million. The $68.4 million of deferred tax assets at December 31, 2022, for which no valuation allowance is recorded, is anticipated to be realized through future taxable income or the future reversal of existing taxable temporary differences recorded as deferred tax liabilities at December 31, 2022. Should the Company determine that it is not more-likely-than-not to be able to realize its remaining deferred tax assets in the future, an adjustment to the valuation allowance would be recorded in the period such determination is made. Generally, the Company has considered cash and cash equivalents held by subsidiaries outside the U.S. to be indefinitely reinvested in its foreign operations and the Company’s current plans do not demonstrate a need to repatriate such cash to fund U.S. operations. As of December 31, 2022, the Company continues to assert that its undistributed earnings of certain foreign subsidiaries are indefinitely reinvested. It is not practicable to determine the income tax liability that would be payable if such earnings were not permanently reinvested. Valuation Allowances ASC 740, Income Taxes, requires that the future realization of deferred tax assets depends on the existence of sufficient taxable income in future periods. Possible sources of taxable income include taxable income in carryback periods, the future reversal of existing taxable temporary differences recorded as a deferred tax liability, tax-planning strategies that generate future income or gains in excess of anticipated losses in the carryforward period and projected future taxable income. If, based upon all available evidence, both positive and negative, it is more likely than not such deferred tax assets will not be realized, a valuation allowance is recorded. Significant weight is given to positive and negative evidence that is objectively verifiable. A company’s three-year cumulative loss position is significant negative evidence in considering whether deferred tax assets are realizable and the accounting guidance restricts the amount of reliance the Company can place on projected taxable income to support the recovery of the deferred tax assets. We continually evaluate the need to maintain a valuation allowance for deferred tax assets based on our assessment of whether it is more likely than not that deferred tax benefits will be realized through the generation of future taxable income. Appropriate consideration is given to all available evidence, both positive and negative, in assessing the need for a valuation allowance. During the year ended December 31, 2022, the total valuation allowance recorded against the Company’s deferred tax assets decreased by $4.1 million, primarily due to the release of a valuation allowance that had previously been recorded against deferred tax assets associated with foreign tax credits in the U.S., and the release of a valuation allowance in the U.K. At December 31, 2022, the total valuation allowance recorded against the Company’s deferred tax assets was $1.0 million, comprised of a $0.7 million valuation allowance recorded against state net operating loss carryforwards and a $0.3 million valuation allowance recorded against other deferred tax assets. Unrecognized Tax Benefits The following table summarizes the activity related to the Company’s unrecognized tax benefits:
(in millions) | 2022 |  | 2021 |  | 2020
Balance at January 1 | $ | 1.2 |  |  | $ | 1.2 |  |  | $ | 1.3 |
Increases as a result of tax positions taken in the current period | — |  |  | 0.1 |  |  | — |
Decreases due to lapse of statute of limitations | — |  |  | (0.1) |  |  | (0.1) |
Balance at December 31 | $ | 1.2 |  |  | $ | 1.2 |  |  | $ | 1.2 |
The Company’s accounting policy is to recognize interest and penalties related to income tax matters in income tax expense. At each of December 31, 2022 and 2021, accruals for interest and penalties amounting to $0.4 million, are included in the Consolidated Balance Sheets but are not included in the table above. At December 31, 2022 and 2021, liabilities for unrecognized tax benefits, including interest and penalties of $1.6 million and $1.6 million, respectively, were included within Other long-term liabilities on the Consolidated Balance Sheets. At each of December 31, 2022 and 2021, unrecognized tax benefits of $0.1 million, were included as a component of Deferred tax liabilities on the Consolidated Balance Sheets. All of the unrecognized tax benefits of $1.2 million at each of December 31, 2022 and 2021, would impact our annual effective tax rate, if recognized. We do not expect any significant change to our unrecognized tax benefits as a result of potential expiration of statute of limitations or settlements with tax authorities within the next twelve months. Status of Tax Returns We file U.S., state and foreign income tax returns in jurisdictions with varying statutes of limitations. The 2019 through 2021 tax years generally remain subject to examination by federal tax authorities, whereas the 2018 through 2021 tax years generally remain subject to examination by most state tax authorities. In significant foreign jurisdictions, the tax years from 2018 through 2021 generally remain subject to examination by their respective tax authorities.

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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 http://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 http://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 http://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 http://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 http://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 http://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 http://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 http://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 http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
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