XML 35 R21.htm IDEA: XBRL DOCUMENT
v3.24.0.1

Income Taxes | 12 Months Ended
--- | ---
Dec. 31, 2023
Income Tax Disclosure [Abstract] |
Income Taxes | 10. Income Taxes The components of pre-tax income, generally based on the jurisdiction of the legal entity, were as follows (in millions):
|  | Year Ended December 31, |
|  | 2023 |  |  | 2022 |  |  | 2021 |
Domestic |  | $ | (40.0 | ) |  | $ | 46.8 |  |  | $ | (59.9 | )
Foreign |  |  | 785.8 |  |  |  | 961.8 |  |  |  | 995.3 |
Total pre-tax income |  | $ | 745.8 |  |  | $ | 1,008.6 |  |  | $ | 935.4 |
For the years ended December 31, 2023, 2022, and 2021, 105%, 95% and 106% of the Company’s pre-tax income was derived from foreign sources, respectively. The provision for income taxes was as follows (in millions):
|  | Year Ended December 31, |
|  | 2023 |  |  | 2022 |  |  | 2021 |
Federal |  | $ | 18.5 |  |  | $ | (34.0 | ) |  | $ | 40.3 |
State and local |  |  | 2.0 |  |  |  | (8.0 | ) |  |  | 1.4 |
Foreign |  |  | 99.3 |  |  |  | 140.0 |  |  |  | 87.9 |
Total provision for income taxes |  | $ | 119.8 |  |  | $ | 98.0 |  |  | $ | 129.6 |
The Company’s effective tax rates differed from statutory rates as follows:
|  | Year Ended December 31, |
|  | 2023 |  |  | 2022 |  |  | 2021 |
Federal statutory rate |  |  | 21.0 | % |  |  | 21.0 | % |  |  | 21.0 | %
State income taxes, net of federal income tax benefits |  |  | 0.3 | % |  |  | (0.1 | )% |  |  | 0.2 | %
Foreign rate differential, net of United States tax paid on foreign earnings (3.0%, 4.6%, and 3.3%, respectively) |  |  | (8.5 | )% |  |  | (8.3 | )% |  |  | (9.5 | )%
Divestitures |  |  | 0.5 | % |  |  | 5.6 | % |  |  | — | %
Change in Business Solutions permanent reinvestment assertion |  |  | — | % |  |  | — | % |  |  | 1.9 | %
Lapse of statute of limitations |  |  | (0.8 | )% |  |  | (9.7 | )% |  |  | (0.5 | )%
Valuation allowances |  |  | 0.7 | % |  |  | 0.2 | % |  |  | — | %
Uncertain tax positions |  |  | 2.3 | % |  |  | (0.7 | )% |  |  | 1.7 | %
Other |  |  | 0.6 | % |  |  | 1.7 | % |  |  | (0.9 | )%
Effective tax rate |  |  | 16.1 | % |  |  | 9.7 | % |  |  | 13.9 | %
The increase in the Company’s effective tax rate for the year ended December 31, 2023 compared to the prior year was primarily due to the reversal of uncertain tax positions in the prior year, including from statute of limitations expirations and the completion of the examination of the Company’s federal income tax returns for 2017 and 2018, partially offset by the effects of the sale of the Business Solutions business. The decrease in the Company’s effective tax rate for the year ended December 31, 2022 compared to the prior year was primarily due to the reversal of uncertain tax positions, including from statute of limitations expirations and the completion of the examination of the Company’s federal income tax returns for 2017 and 2018 (“IRS Examination”), as well as tax expense incurred in the prior period related to changes in the Company’s permanent reinvestment assertions, partially offset by the sale of the Company’s Business Solutions business and the Company’s decision to suspend its operations in Russia and Belarus. In addition to the items included in the reconciliation of the Company’s comparable effective tax rate, in the fourth quarter of 2023, the Company concluded steps to eliminate certain intercompany financing subsidiaries. The steps resulted in cancellation of certain intercompany debts which were offset by utilization of net operating losses that prior to fourth quarter of 2023 were determined to have a remote possibility of realization, subject to full valuation allowance. There was no net tax effect of these steps. The Company’s provision for income taxes consisted of the following components (in millions):
|  | Year Ended December 31, |
|  | 2023 |  |  | 2022 |  |  | 2021 |
Current: |  |  |  |  |  |  |  |  |
Federal |  | $ | 30.6 |  |  | $ | (17.1 | ) |  | $ | 43.9 |
State and local |  |  | 2.7 |  |  |  | (4.6 | ) |  |  | 4.3 |
Foreign |  |  | 97.5 |  |  |  | 146.4 |  |  |  | 84.0 |
Total current taxes |  |  | 130.8 |  |  |  | 124.7 |  |  |  | 132.2 |
Deferred: |  |  |  |  |  |  |  |  |
Federal |  |  | (12.1 | ) |  |  | (16.9 | ) |  |  | (3.6 | )
State and local |  |  | (0.7 | ) |  |  | (3.4 | ) |  |  | (2.9 | )
Foreign |  |  | 1.8 |  |  |  | (6.4 | ) |  |  | 3.9 |
Total deferred taxes |  |  | (11.0 | ) |  |  | (26.7 | ) |  |  | (2.6 | )
|  | $ | 119.8 |  |  | $ | 98.0 |  |  | $ | 129.6 |
Deferred tax assets and liabilities are recognized for the expected tax consequences of temporary differences between the book and tax bases of the Company’s assets and liabilities. The following table outlines the principal components of deferred tax items (in millions):
|  | December 31, |
|  | 2023 |  |  | 2022 |
Deferred tax assets related to: |  |  |  |  |  |
Reserves, accrued expenses and employee-related items |  | $ | 17.5 |  |  | $ | 12.4 |
Lease liabilities |  |  | 19.2 |  |  |  | 18.4 |
Tax attribute carryovers |  |  | 29.9 |  |  |  | 24.9 |
Intangibles, property and equipment |  |  | 8.0 |  |  |  | 9.0 |
Deferred benefits of uncertain tax positions |  |  | 10.0 |  |  |  | — |
Securities and investments |  |  | 8.4 |  |  |  | 14.7 |
Other |  |  | 2.0 |  |  |  | 3.7 |
Valuation allowance |  |  | (18.5 | ) |  |  | (14.1 | )
Total deferred tax assets |  |  | 76.5 |  |  |  | 69.0 |
Deferred tax liabilities related to: |  |  |  |  |  |
Intangibles, property and equipment |  |  | 203.8 |  |  |  | 207.7 |
Lease right-of-use assets |  |  | 12.3 |  |  |  | 10.8 |
Total deferred tax liabilities |  |  | 216.1 |  |  |  | 218.5 |
Net deferred tax liability(a) |  | $ | 139.6 |  |  | $ | 149.5 |
a) As of December 31, 2023 and 2022, deferred tax assets that cannot be fully offset by deferred tax liabilities in the respective tax jurisdictions of $8.0 million and $9.0 million, respectively, are reflected in Other assets in the Consolidated Balance Sheets. Deferred tax assets for tax attribute carryovers and valuation allowance included in the above table exclude the impact of tax attribute carryovers determined to have a remote possibility of realization. The valuation allowances are primarily the result of uncertainties regarding the Company’s ability to recognize tax benefits associated with certain United States foreign tax credit carryforwards and certain foreign and state net operating losses. Such uncertainties include generating sufficient United States foreign tax credit limitation related to passive income and generating sufficient income. Changes in circumstances, or the identification and implementation of relevant tax planning strategies, could make it foreseeable that the Company will recover these deferred tax assets in the future, which could lead to a reversal of these valuation allowances and a reduction in income tax expense. Outside tax basis differences of $1.3 billion as of December 31, 2023 primarily relate to undistributed foreign earnings not already subject to United States income tax and additional outside basis difference inherent in certain entities. To the extent such outside basis differences are attributable to undistributed earnings not already subject to United States tax, such undistributed earnings continue to be indefinitely reinvested in foreign operations. Upon the future realization of the Company’s basis difference, the Company could be subject to United States income taxes, state income taxes, and possible withholding taxes payable to various foreign countries. However, determination of this amount of unrecognized deferred tax liability is not practicable because of complexities associated with its hypothetical calculation. Tax reform legislation enacted into United States law in 2017 (“the Tax Act”) imposed a domestic one-time tax on the Company’s previously undistributed earnings of foreign subsidiaries, with certain exceptions. This tax charge, combined with the Company’s other 2017 United States taxable income and tax attributes, resulted in a 2017 United States federal tax liability of approximately $800 million, of which approximately $358 million remained as of December 31, 2023. The Company has elected to pay this liability in periodic installments through 2025. For the years ended December 31, 2023, 2022, and 2021, the Company made installment payments of $119.5 million, $63.7 million, and $63.4 million, respectively. Uncertain Tax Positions The Company has established contingency reserves for a variety of material, known tax exposures. As of December 31, 2023, the total amount of tax contingency reserves was $244.8 million, including accrued interest and penalties, net of related items. The Company’s tax reserves reflect management’s judgment as to the resolution of the issues involved if subject to judicial review or other settlement. While the Company believes its reserves are adequate to cover reasonably expected tax risks, there can be no assurance that, in all instances, an issue raised by a tax authority will be resolved at a financial cost that does not exceed its related reserve. With respect to these reserves, the Company’s income tax expense would include: (i) any changes in tax reserves arising from material changes in facts and circumstances (i.e., new information) surrounding a tax issue during the period and (ii) any difference from the Company’s tax position as recorded in the financial statements and the final resolution of a tax issue during the period. Such resolution could materially increase or decrease income tax expense in the Company’s consolidated financial statements in future periods and could impact operating cash flows. Unrecognized tax benefits represent the aggregate tax effect of differences between tax return positions and the amounts otherwise recognized in the Company’s consolidated financial statements and are reflected in Income taxes payable in the Consolidated Balance Sheets. A reconciliation of the beginning and ending amount of unrecognized tax benefits, excluding interest and penalties and before offset of related items, is as follows (in millions):
|  | 2023 |  |  | 2022 |
Balance as of January 1 |  | $ | 270.5 |  |  | $ | 344.6 |
Increase related to current period tax positions(a) |  |  | 0.4 |  |  |  | 1.6 |
Increase related to prior period tax positions |  |  | 2.7 |  |  |  | — |
Decrease related to prior period tax positions |  |  | (0.5 | ) |  |  | (16.5 | )
Decrease due to settlements with taxing authorities |  |  | — |  |  |  | (2.2 | )
Decrease due to lapse of applicable statute of limitations |  |  | (3.7 | ) |  |  | (55.0 | )
Decrease due to effects of foreign currency exchange rates |  |  | — |  |  |  | (2.0 | )
Balance as of December 31 |  | $ | 269.4 |  |  | $ | 270.5 |
(a) Includes recurring accruals for issues which initially arose in previous periods. The total amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate was $259.5 million and $260.1 million as of December 31, 2023 and 2022, respectively, excluding interest and penalties. The Company recognizes interest and penalties with respect to unrecognized tax benefits in Provision for income taxes in its Consolidated Statements of Income and records the associated liability in Income taxes payable in its Consolidated Balance Sheets. The Company recognized $14.7 million, $(10.9) million, and $4.4 million in interest and penalties during the years ended December 31, 2023, 2022, and 2021, respectively. The Company has accrued $40.7 million and $21.0 million for the payment of interest and penalties as of December 31, 2023 and 2022, respectively. The unrecognized tax benefits accrual as of December 31, 2023 consists of federal, state, and foreign tax matters. It is reasonably possible that the Company’s total unrecognized tax benefits could decrease by up to approximately $250 million during the next 12 months in connection with various matters which may be resolved. The Company and its subsidiaries file tax returns for the United States, for multiple states and localities, and for various non-United States jurisdictions, and the Company has identified the United States as its major tax jurisdiction, as the income tax imposed by any one foreign country is not material to the Company. The Company’s tax filings are subject to examination by U.S. federal, state, and various non-United States jurisdictions. The conclusion of the IRS Examination resulted in both agreed and unagreed adjustments. The agreed adjustments were reflected in the Company’s financial statements for the year ended December 31, 2022. The Company is contesting the unagreed adjustments at the IRS Appeals level and believes its reserves for these proposed adjustments are adequate. The statute of limitations for the U.S. federal income tax returns for 2017 and 2018 has been extended to March 31, 2025. The Company's U.S. federal income tax returns since 2020 are also eligible to be examined.

X
- References No definition available. + Details
Name: | us-gaap_IncomeTaxDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- 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 -Topic 946 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 13 -Publisher FASB -URI https://asc.fasb.org//1943274/2147480990/946-20-50-13 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 235 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//740/tableOfContent Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 14 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-14 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-21 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 270 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482526/740-270-50-1 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 17 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-17 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479360/740-10-S99-1 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479360/740-10-S99-2 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 30 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482603/740-30-50-2 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration