INCOME TAXES

6 Months Ended

Jun. 30, 2022

Income Tax Disclosure [Abstract]

INCOME TAXES

INCOME TAXES

The effective tax rate was 21.9% and 21.0% for the second quarter and first six months of 2022, respectively, compared to 20.8% and 20.3% for the second quarter and first six months of 2021, respectively. The effective tax rate was less favorably impacted by tax benefits related to employee share based payments in the second quarter and first six months of 2022 than in the same periods last year. The other significant components of the Company’s effective tax rate were consistent year over year.

At December 31, 2021, the Company had $228.5 million in unrecognized tax benefits, the recognition of which would have an effect of $218.9 million on the effective tax rate. Included in the balance of unrecognized tax benefits at December 31, 2021 was $13.7 million related to tax positions for which it is reasonably possible that the total amounts could significantly change during the next twelve months.

The Company classifies all income tax related interest and penalties as income tax expense. At December 31, 2021, the Company had accrued $26.4 million for the potential payment of income tax interest and penalties.

There were no significant changes to any of the balances of unrecognized tax benefits at December 31, 2021 during the six months ended June 30, 2022.

The Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction, and various state and foreign jurisdictions. The IRS audited the Company's 2013, 2014, 2015 and 2016 income tax returns. As a result of these audits, certain adjustments have been assessed. The Company has filed a protest, submitted additional information for consideration, and is currently in the appeals process with the IRS. The Company continues to evaluate the adjustments and believes that it is adequately reserved for any potential exposure. As of June 30, 2022, the federal statute of limitations had not expired for the 2013 through 2021 tax years.

At June 30, 2022, the Company is subject to non-U.S. income tax examinations for the tax years of 2014 through 2021. In addition, the Company is subject to state and local income tax examinations for the tax years 1998 through 2021.