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Income Taxes | 12 Months Ended
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Dec. 31, 2020
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes The Company’s income before income taxes was generated from its United States and foreign operations as follows (in millions):
| For the Years Ended December 31,
| 2020 |  | 2019 |  | 2018
United States | $ | 72.9 |  |  | $ | 344.3 |  |  | $ | 344.7 |
Foreign | 68.5 |  |  | 63.5 |  |  | 84.5 |
Income before income taxes | $ | 141.4 |  |  | $ | 407.8 |  |  | $ | 429.2 |
Components of the Company’s provision for income taxes are as follows (in millions):
| For the Years Ended December 31,
| 2020 |  | 2019 |  | 2018
Current: |  |  |  |  |
Federal | $ | 56.5 |  |  | $ | 46.4 |  |  | $ | 39.0 |
State | 13.4 |  |  | 18.2 |  |  | 3.8 |
Foreign | 27.4 |  |  | 26.8 |  |  | 27.5 |
Deferred | (80.8) |  |  | (7.5) |  |  | 23.6 |
Total provision for income taxes | $ | 16.5 |  |  | $ | 83.9 |  |  | $ | 93.9 |
Reconciliation of the Federal statutory income tax rate to the effective tax rate is as follows:
| For the Years Ended December 31,
| 2020 |  | 2019 |  | 2018
Federal statutory rate | 21.0 | % |  | 21.0 | % |  | 21.0 | %
State income taxes, net of federal benefit | 0.4 |  |  | 2.3 |  |  | 1.9 |
Domestic manufacturing deduction | (2.6) |  |  | (2.1) |  |  | (1.4) |
Research and development tax credit | (12.6) |  |  | (4.0) |  |  | (3.1) |
Stock based compensation | (0.3) |  |  | 0.2 |  |  | (1.4) |
Valuation allowance | 1.7 |  |  | 0.5 |  |  | 0.2 |
Foreign tax rate differential | 5.6 |  |  | 1.7 |  |  | 1.3 |
Other permanent differences | (1.6) |  |  | 1.0 |  |  | 3.4 |
Effective income tax rate for continuing operations | 11.6 | % |  | 20.6 | % |  | 21.9 | %
Undistributed earnings relating to certain non-U.S. subsidiaries of approximately $251.0 million and $188.0 million at December 31, 2020 and 2019, respectively, are considered to be permanently reinvested. While these earnings would no longer be subject to incremental U.S. tax, if the Company were to actually distribute these earnings, they could be subject to additional foreign income taxes and/or withholding taxes payable to non-U.S. countries. Determination of the unrecognized deferred foreign income tax liability related to these undistributed earnings is not practicable due to the complexities associated with this hypothetical calculation. The Company utilizes the liability method of accounting for income taxes whereby deferred taxes are determined based on the estimated future tax effects of differences between the financial statement and tax bases of assets and liabilities given the provisions of enacted tax laws. The net deferred income taxes consist of the following (in millions):
| As of December 31,
| 2020 |  | 2019
Deferred income taxes: |  |  |
Inventories | $ | 37.2 |  |  | $ | 18.5 |
Accrued expenses | 116.5 |  |  | 126.6 |
Cost in excess of net assets of businesses acquired | 42.5 |  |  | (35.2) |
Property and equipment | (92.7) |  |  | (88.1) |
Operating lease assets | (30.7) |  |  | (26.5) |
Operating lease liabilities | 30.9 |  |  | 27.1 |
Employee compensation and benefits | 64.3 |  |  | 61.4 |
Net operating loss and other loss carryforwards | 21.4 |  |  | 20.1 |
Valuation allowance | (16.1) |  |  | (14.6) |
Total net deferred income tax asset | $ | 173.3 |  |  | $ | 89.3 |
At December 31, 2020, the Company had available unused international and acquired federal net operating loss carryforwards of $62.3 million. The net operating loss carryforwards will expire at various dates from 2021 to 2030, with certain jurisdictions having indefinite carryforward terms. The Company classified liabilities related to unrecognized tax benefits as long-term income taxes payable in the accompanying consolidated balance sheets in accordance with ASC Topic 740. The Company recognizes potential interest and penalties related to income tax positions as a component of the provision for income taxes on the consolidated statements of income. Reserves related to potential interest are recorded as a component of long-term income taxes payable. The federal benefit of state taxes and interest related to the reserves is recorded as a component of deferred taxes. The entire balance of unrecognized tax benefits at December 31, 2020, if recognized, would affect the Company’s effective tax rate. The Company does not anticipate that total unrecognized tax benefits will materially change in the next twelve months. Tax years 2017 through 2020 remain open to examination by certain tax jurisdictions to which the Company is subject. A reconciliation of the beginning and ending amounts of unrecognized tax benefits is as follows (in millions):
| For the Years Ended December 31,
| 2020 |  | 2019
Balance at January 1, | $ | 24.4 |  |  | $ | 25.5 |
Gross increases for tax positions of prior years | 0.8 |  |  | 1.2 |
Gross increases for tax positions of current year | 2.7 |  |  | 4.0 |
Decreases due to settlements and other prior year tax positions | (4.2) |  |  | (5.6) |
Decreases for lapse of statute of limitations | (10.5) |  |  | (0.7) |
Balance at December 31, | 13.2 |  |  | 24.4 |
Reserves related to potential interest and penalties at December 31, | 1.2 |  |  | 3.7 |
Unrecognized tax benefits at December 31, | $ | 14.4 |  |  | $ | 28.1 |

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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=84230637&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=116825942&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=84230637&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=116825942&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=84230637&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 + Details
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