Income Taxes

12 Months Ended

Dec. 31, 2023

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

Income before income taxes was taxed under the following jurisdictions:

	Year Ended December 31,
	2023		2022		2021
Domestic	$	1,298.1	$	1,355.6	$	1,186.7
Foreign	152.1		132.2		111.1
Total	$	1,450.2	$	1,487.8	$	1,297.8

Components of Income tax expense (benefit) consist of the following:

	Year Ended December 31,
	2023		2022		2021
Current:
Federal	$	267.3	$	281.8	$	235.6
State	69.7		75.8		52.9
Foreign	41.6		33.9		27.4
Total current	378.6		391.5		315.9
Deferred:
Domestic	(29.3)		(15.0)		(8.7)
Foreign	(3.4)		(3.2)		2.0
Total deferred	(32.7)		(18.2)		(6.7)
Income tax expense	$	345.9	$	373.3	$	309.2

The reconciliation between the statutory tax rate expressed as a percentage of income before income taxes and the effective tax rate was as follows:

	Year Ended December 31,
	2023				2022				2021
Statutory federal income tax rate	$	304.5	21.0	%	$	312.4	21.0	%	$	272.5	21.0	%
State taxes, net of federal effect	55.8		3.8		61.1		4.1		50.3		3.9
Excess tax benefit of equity awards	(29.6)		(2.0)		(12.0)		(0.8)		(30.1)		(2.3)
Tax on foreign earnings	8.5		0.6		3.0		0.2		1.7		0.1
Effect of tax law changes	—		—		—		—		4.8		0.4
Other	6.7		0.5		8.8		0.6		10.0		0.7
Effective tax rate	$	345.9	23.9	%	$	373.3	25.1	%	$	309.2	23.8	%

The tax effect of temporary differences that give rise to net deferred income tax liabilities is presented below.

	December 31,
	2023		2022
Deferred tax assets:
Contract liabilities	$	38.4	$	46.3
Equity compensation plans	34.5		31.3
Net operating loss and credit carryforwards, net	17.0		17.0
Payroll and benefits	17.2		24.3
Operating lease liabilities	45.6		48.5
Accounts receivable	20.1		18.1
Other	19.9		19.5
Total deferred tax assets	192.7		205.0
Deferred tax liabilities:
Acquisition-related intangibles	269.8		293.3
Property and equipment	22.4		38.1
Operating lease right-of-use assets	27.6		32.9
Other	26.7		27.1
Total deferred tax liabilities	346.5		391.4
Deferred tax asset valuation allowance	17.0		17.0
Net deferred tax liabilities	$	170.8	$	203.4

The Company has income tax net operating losses of $5 million that do not expire and international tax credit carryforwards of $16 million, which expire in 2027.

The Company is indefinitely reinvested in its UK business, and therefore did not provide for any US deferred taxes on the earnings of the UK business. The Company is not permanently reinvested in its Canadian business and therefore has recognized deferred tax liabilities of $6 million as of December 31, 2023 related to Canada withholding taxes on earnings of its Canadian business.

In the ordinary course of business, the Company is subject to review by domestic and foreign taxing authorities, including the Internal Revenue Service (“IRS”). In general, the Company is no longer subject to audit by the IRS or state, local, or foreign taxing authorities for tax years through 2014. Various taxing authorities are in the process of auditing income tax returns of the Company and its subsidiaries. The Company does not anticipate that any adjustments from the audits would have a material impact on its Consolidated Financial Statements.

Changes in the Company’s unrecognized tax benefits as of December 31, 2023, 2022 and 2021 were as follows:

	Year Ended December 31,
	2023		2022		2021
Balance as of January 1	$	18.7	$	18.4	$	18.3
Additions for current year and prior year	0.6		0.3		0.1
Balance as of December 31	$	19.3	$	18.7	$	18.4

As of December 31, 2023, the Company had $19 million of unrecognized tax benefits that, if recognized, would have decreased income taxes and the corresponding effective income tax rate and increased net income. The impact of recognizing these tax benefits, net of the federal income tax benefit related to unrecognized state income tax benefits, would be approximately $16 million.