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Income Taxes | 12 Months Ended
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Dec. 31, 2022
Income Tax Disclosure [Abstract] |
Income Taxes | (5) Income Taxes The provision for income taxes was as follows:
Year Ended December 31 |  | 2022 |  |  | 2021 |  |  | 2020 |
Current |  |  |  |  |  |  |  |  |
United States |  |  |  |  |  |  |  |  |
Federal |  | $ | 17.6 |  |  | $ | 20.2 |  |  | $ | 5.2 |
State |  |  | 6.8 |  |  |  | 3.3 |  |  |  | 4.5 |
Non-United States |  |  | 154.1 |  |  |  | 163.5 |  |  |  | 124.6 |
Total current |  |  | 178.5 |  |  |  | 187.0 |  |  |  | 134.3 |
Deferred |  |  |  |  |  |  |  |  |
United States |  |  |  |  |  |  |  |  |
Federal |  |  | 11.2 |  |  |  | 5.8 |  |  |  | (11.0 | )
State |  |  | 0.9 |  |  |  | 2.4 |  |  |  | (4.9 | )
Non-United States |  |  | (7.3 | ) |  |  | (9.5 | ) |  |  | 5.5 |
Total deferred |  |  | 4.8 |  |  |  | (1.3 | ) |  |  | (10.4 | )
Total provision |  | $ | 183.3 |  |  | $ | 185.7 |  |  | $ | 123.9 |
A tax reconciliation between taxes computed at the United States federal statutory rate of 21% and the consolidated effective tax rate is as follows:
Year Ended December 31 |  | 2022 |  |  | 2021 |  |  | 2020 |
Income tax based on statutory rate |  | $ | 117.0 |  |  | $ | 119.3 |  |  | $ | 31.0 |
Increase (decrease) resulting from: |  |  |  |  |  |  |  |  |
Non-United States tax rate difference: |  |  |  |  |  |  |  |  |
French business tax(1) |  |  | 24.6 |  |  |  | 26.7 |  |  |  | 43.7 |
Other(2) |  |  | 15.2 |  |  |  | 22.2 |  |  |  | 9.7 |
Repatriation of non-United States earnings |  |  | 10.7 |  |  |  | 5.7 |  |  |  | (2.0 | )
State income taxes, net of federal benefit |  |  | 5.5 |  |  |  | 5.0 |  |  |  | (1.3 | )
Change in valuation allowance(3) |  |  | 13.7 |  |  |  | 22.0 |  |  |  | 48.5 |
Work Opportunity Tax Credit(4) |  |  | (12.4 | ) |  |  | (10.9 | ) |  |  | (4.9 | )
Foreign-Derived Intangible Income deduction |  |  | (9.6 | ) |  |  | (10.7 | ) |  |  | (8.8 | )
Goodwill impairment(5) |  |  | 8.9 |  |  |  | — |  |  |  | 13.4 |
Other, net |  |  | 9.7 |  |  |  | 6.4 |  |  |  | (5.4 | )
Tax provision |  | $ | 183.3 |  |  | $ | 185.7 |  |  | $ | 123.9 |
(1) The French business tax is allowed as a deduction for French income tax purposes. The gross amount of the French business tax was $31.2, $33.7 and $55.3 for 2022, 2021 and 2020, respectively. The amounts in the table above of $24.6, $26.7 and $43.7 for 2022, 2021 and 2020, respectively, represent the French business tax expense net of the French tax benefit using the United States federal rate of 21%. In December 2020, the French Parliament approved the Finance Bill for 2021 which lowered the business tax rate from 1.5% to 0.75%. The benefit of this tax rate reduction is reflected in our 2022 and 2021 Consolidated Financial Statements. In December 2022, the French Parliament approved the Finance Bill for 2023 which repeals the business tax over two years beginning in 2023. The business tax rate will be halved in 2023 and eliminated in 2024. The benefit of this tax rate reduction and repeal will be reflected in our 2023 and 2024 Consolidated Financial Statements. (2) Included in Other Non-United States tax rate differences is the impact of all Non-United States pre-tax earnings and permanent tax differences at the local statutory tax rate versus the United States federal rate of 21%. This includes benefits of $1.5, $2.5 and $6.1 for 2022, 2021 and 2020, respectively, related to the difference between the United States federal rate and the French tax rate applied to the respective gross amounts of the French business tax deduction previously mentioned. (3) In 2020, we determined that it was more likely than not that certain deferred tax assets in Germany and the Netherlands would not be realized and recorded income tax expense of $36.9 and $8.1, respectively, to establish valuation allowances. Additional losses incurred in 2022 and 2021 in Germany resulted in an increase in valuation allowance of $13.5 and $20.1, respectively. (4) The Work Opportunity Tax Credit is currently authorized until December 31, 2025. (5) Non-deductible portion of the goodwill impairment charges recorded in the Netherlands in 2022 and Germany in 2020. Deferred income taxes are recorded based on temporary differences at the tax rate expected to be in effect when the temporary differences reverse. Temporary differences, which give rise to the deferred taxes, are as follows:
December 31 |  | 2022 |  |  | 2021 |
Future Income Tax Benefits (Expense) |  |  |  |  |  |
Accrued payroll taxes and insurance |  | $ | 8.8 |  |  | $ | 22.5 |
Employee compensation payable |  |  | 37.7 |  |  |  | 38.9 |
Pension and postretirement benefits |  |  | 65.0 |  |  |  | 77.9 |
Intangible assets |  |  | (140.4 | ) |  |  | (135.7 | )
Repatriation of non-United States earnings |  |  | (18.4 | ) |  |  | (16.1 | )
Loans denominated in foreign currencies |  |  | (0.7 | ) |  |  | — |
Operating lease ROU assets |  |  | (92.9 | ) |  |  | (96.3 | )
Operating lease liabilities |  |  | 94.6 |  |  |  | 99.5 |
Net operating losses |  |  | 128.9 |  |  |  | 129.4 |
Other |  |  | 179.7 |  |  |  | 163.9 |
Valuation allowance |  |  | (161.1 | ) |  |  | (167.1 | )
Total future tax benefits |  | $ | 101.2 |  |  | $ | 116.9 |
Deferred tax asset |  | $ | 126.7 |  |  | $ | 135.0 |
Deferred tax liability |  |  | (25.5 | ) |  |  | (18.1 | )
Total future tax benefits |  | $ | 101.2 |  |  | $ | 116.9 |
Pre-tax earnings of non-United States operations were $380.9, $433.6 and $86.3 in 2022, 2021 and 2020, respectively. We have not provided deferred taxes on $339.9 of accumulated unremitted earnings of non-United States subsidiaries that are considered indefinitely reinvested. We have not estimated the deferred tax liability on these earnings as such estimation is not practicable to determine or immaterial to the financial statements. As of December 31, 2022, deferred taxes for non-United States withholding and other taxes were provided on $1,227.8 of accumulated unremitted earnings of non-United States subsidiaries that may be remitted to the United States. As of December 31, 2022 and 2021, we have recorded a deferred tax liability of $18.4 and $16.1, respectively, related to these non-United States earnings that may be remitted. We had United States federal and non-United States net operating loss carryforwards and United States state net operating loss carryforwards totaling $651.4 and $141.3, respectively, as of December 31, 2022. The net operating loss carryforwards expire as follows:
|  | United States Federal and Non-United States |  |  | United States State |
2023 |  |  | 0.1 |  |  |  | 8.2 |
2024 |  |  | 5.0 |  |  |  | 52.2 |
2025 |  |  | 2.7 |  |  |  | 5.3 |
2026 |  |  | 1.2 |  |  |  | 9.2 |
2027 |  | 3.4 |  |  | 5.7 |
Thereafter |  |  | 8.0 |  |  |  | 52.6 |
No expirations |  |  | 631.0 |  |  |  | 8.1 |
Total net operating loss carryforwards |  | $ | 651.4 |  |  | $ | 141.3 |
We have recorded a deferred tax asset of $128.9 as of December 31, 2022, for the benefit of these net operating losses. Realization of this asset is dependent on generating sufficient taxable income prior to the expiration of the loss carryforwards. A related valuation allowance of $111.8 was recorded as of December 31, 2022, as management believes that realization of certain net operating loss carryforwards is unlikely. We had gross unrecognized tax benefits related to various tax jurisdictions, including interest and penalties, of $81.6, $71.8 and $64.5 in 2022, 2021 and 2020, respectively. If recognized, the entire amount would favorably affect the effective tax rate except for $6.0. We believe that it is reasonably possible that the amount of gross unrecognized tax benefits could decrease between $16.1 and $19.4 in the next 12 months as a result of the resolution of tax matters in various global jurisdictions and the lapses of statutes of limitations. We recognize accrued interest and penalties related to unrecognized tax benefits in income tax expense. We accrued net interest and penalties of $0.8, $0.9 and $0.0 in 2022, 2021 and 2020, respectively. The following table summarizes the activity related to our unrecognized tax benefits during 2022, 2021 and 2020:
|  | 2022 |  |  | 2021 |  |  | 2020 |
Gross unrecognized tax benefits, beginning of year |  | $ | 67.3 |  |  | $ | 60.9 |  |  | $ | 65.9 |
Increases in prior year tax positions |  |  | 10.5 |  |  |  | 4.6 |  |  |  | 1.4 |
Decreases in prior year tax positions |  |  | (1.2 | ) |  |  | (0.4 | ) |  |  | (4.1 | )
Increases for current year tax positions |  |  | 2.3 |  |  |  | 9.0 |  |  |  | 3.2 |
Expiration of statute of limitations and audit settlements |  |  | (2.6 | ) |  |  | (6.8 | ) |  |  | (5.5 | )
Gross unrecognized tax benefits, end of year |  | $ | 76.3 |  |  | $ | 67.3 |  |  | $ | 60.9 |
Potential interest and penalties |  |  | 5.3 |  |  |  | 4.5 |  |  |  | 3.6 |
Balance, end of year |  | $ | 81.6 |  |  | $ | 71.8 |  |  | $ | 64.5 |
We conduct business globally in various countries and territories. We are routinely audited by the tax authorities of the various tax jurisdictions in which we operate. Generally, the tax years that could be subject to examination are 2015 through 2022 for our major operations in France, Italy, the United Kingdom and the United States. As of December 31, 2022, we were subject to tax audits in Austria, Germany, India, Israel, Portugal, Spain and the United States. We believe that the resolution of these audits will not have a material adverse impact on earnings.

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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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