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Income Taxes
 12 Months Ended
Dec. 31, 2023
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
Earnings before income taxes for the years ended December 31, 2023, 2022, and 2021 consisted of the following components:

 202320222021
United States$1,480.3 $1,026.4 $814.7 
Other262.8 255.6 217.2 
Earnings before income taxes$1,743.1 $1,282.0 $1,031.9 


Components of income tax expense for the years ended December 31, 2023, 2022, and 2021 were as follows:

 202320222021
Current:   
Federal$352.6 $322.9 $110.2 
State80.7 80.8 50.8 
Foreign69.9 65.9 59.9 
Deferred:   
Federal(94.1)(136.9)27.5 
State(27.7)(31.1)(27.2)
Foreign(6.7)(5.2)5.4 
Income tax expense$374.7 $296.4 $226.6 

Reconciliations between the U.S. federal statutory income tax rate and the effective income tax rate for the years ended December 31, 2023, 2022, and 2021 were as follows:

 202320222021
Federal statutory tax rate21.0 %21.0 %21.0 %
Foreign operations, net0.5 0.8 2.5 
R&D tax credits(1.9)(3.0)(2.1)
State taxes, net of federal benefit3.5 3.7 2.8 
Stock-based compensation(1.5)(1.0)(2.4)
Impact of UK tax rate change— — 2.0 
Legal entity restructuring(0.4)0.8 (1.4)
Other, net0.3 0.8 (0.4)
Effective tax rate21.5 %23.1 %22.0 %

The deferred income tax balance sheet accounts arise from temporary differences between the amount of assets and liabilities recognized for financial reporting and tax purposes.
Components of deferred tax assets and liabilities at December 31 were as follows:

 20232022
Deferred tax assets:  
Reserves and accrued expenses$223.2 $192.4 
Net operating loss carryforwards80.2 84.6 
R&D credits7.6 8.9 
Capitalized R&D expenditures178.7 97.8 
Interest expense limitation carryforwards31.0 41.1 
Lease liabilities47.1 50.1 
Valuation allowance(34.8)(37.1)
Total deferred tax assets$533.0 $437.8 
Deferred tax liabilities:  
Reserves and accrued expenses$18.3 $12.0 
Amortizable intangible assets1,752.8 1,818.7 
Accrued tax on unremitted foreign earnings8.8 5.8 
Right-of-use assets44.7 48.0 
Outside basis difference in Indicor189.3 174.2 
Total deferred tax liabilities$2,013.9 $2,058.7 

As of December 31, 2023, the Company has $41.4 of tax-effected U.S. federal net operating loss carryforwards and $40.0 of tax-effected state net operating loss carryforwards without regard for federal benefit of state. The majority of the net operating loss carryforwards are subject to limitation under the Internal Revenue Code of 1986, as amended (“IRC”) Section 382. Additionally, as of December 31, 2023, the Company has $31.0 of IRC Section 163(j) interest expense limitation carryforwards which have an indefinite carryforward period.

As of December 31, 2023, the Company has a $178.7 deferred tax asset related to taxpayer requirements to capitalize and amortize research and development (“R&D”) expenditures under IRC Section 174. The Company amortizes these costs for tax purposes over 5 years if the R&D was performed in the U.S. and over 15 years if the R&D was performed outside of the U.S.

The Company has a deferred tax liability of $189.3 in outside basis difference as of December 31, 2023 associated with the retained minority equity interest in Indicor. See Note 10 for additional information on this minority equity interest.

As of December 31, 2023, the Company determined that a total valuation allowance of $34.8 was necessary to reduce U.S. federal and state deferred tax assets by $28.4 and foreign deferred tax assets by $6.4, where it was more likely than not that all such deferred tax assets will not be realized. As of December 31, 2023, the Company believes it is more likely than not that the remaining net deferred tax assets will be realized based on the Company’s estimate of future taxable income and any applicable tax planning strategies within various tax jurisdictions.

The Company recognizes in the Consolidated Financial Statements only those tax positions determined to be “more likely than not” of being sustained upon examination based on the technical merits of the positions.

A reconciliation of the beginning and ending amounts of unrecognized tax benefits are as follows:

 202320222021
Beginning balances$29.0 $40.5 $63.5 
Additions for tax positions of prior periods4.3 — 2.2 
Additions for tax positions of the current period4.3 2.3 3.3 
Additions due to acquisitions— — 1.0 
Reductions for tax positions of prior periods— (11.2)(0.5)
Reductions attributable to lapses of applicable statutes of limitations(2.0)(2.6)(4.6)
Reductions attributable to settlements with taxing authorities— — (24.4)
Ending balances$35.6 $29.0 $40.5 
The total amount of unrecognized tax benefits that, if recognized, would impact the effective tax rate is $35.6. Interest and penalties related to unrecognized tax benefits were $2.0 in 2023 and are classified as a component of income tax expense. Accrued interest and penalties were $6.6 at December 31, 2023 and $4.6 at December 31, 2022. During the next twelve months, it is reasonably possible that the unrecognized tax benefits may decrease by a net amount of $5.1, mainly due to anticipated statute of limitations lapses in various jurisdictions.

The Company and its subsidiaries are subject to examinations for U.S. federal income tax as well as income tax in various state, city, and foreign jurisdictions. The Company’s federal income tax returns for 2020 through the current period remain open to examination and the relevant state, city, and foreign statutes vary. The Company does not expect the assessment of any significant additional tax in excess of amounts reserved.

The Company intends to distribute all historical unremitted foreign earnings up to the amount of excess foreign cash, as well as all future foreign earnings that can be repatriated without incremental U.S. federal tax cost. Any remaining outside basis differences relating to the Company’s investment in foreign subsidiaries are not expected to be material and will be indefinitely reinvested.