XML 53 R19.htm IDEA: XBRL DOCUMENT v3.22.0.1
INCOME TAXES
 12 Months Ended
Dec. 31, 2021
Income Tax Disclosure [Abstract]  
INCOME TAXES INCOME TAXES
The sources of income before taxes, classified between domestic and foreign entities are as follows:
202120202019
Domestic$2,580.6 $1,846.5 $784.4 
Foreign546.0 372.5 320.5 
Total pre-tax income$3,126.6 $2,219.1 $1,104.9 
The provisions (benefits) for income taxes in the accompanying consolidated statements of operations consist of the following:
 Years Ended December 31,
 202120202019
Current:   
Federal$545.5 $455.3 $126.7 
State171.9 172.8 40.2 
Foreign107.7 81.0 83.9 
 $825.1 $709.1 $250.8 
Deferred:   
Federal$(64.6)$(6.7)$38.2 
State(13.7)(28.1)2.5 
Foreign0.3 (12.2)(11.5)
 (78.0)(47.0)29.2 
 $747.1 $662.1 $280.0 
The effective tax rates on earnings before income taxes are reconciled to statutory U.S. income tax rates as follows:
 Years Ended December 31,
 202120202019
Statutory U.S. rate21.0 %21.0 %21.0 %
State and local income taxes, net of U.S. Federal income tax effect3.9 5.3 3.2 
Foreign earnings taxed at lower rates than the statutory U.S. rate(0.5)(0.4)(0.1)
Restructuring and acquisition items— — 0.7 
Impairment of assets— 4.0 — 
GILTI— (0.1)1.1 
Other(0.5)— (0.6)
Effective rate23.9 %29.8 %25.3 %
The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities are as follows:
December 31, 2021December 31, 2020
Deferred tax assets:  
Accounts receivable$22.3 $20.0 
Employee compensation and benefits145.2 115.6 
Operating lease liability176.3 187.6 
Acquisition and restructuring reserves19.1 22.6 
Tax loss carryforwards184.5 206.8 
Other92.7 126.8 
 640.1 679.4 
Less: valuation allowance(149.2)(167.6)
Deferred tax assets, net of valuation allowance$490.9 $511.8 
Deferred tax liabilities:  
Right of use asset$(166.9)$(179.5)
Intangible assets(823.8)(835.5)
Property, plant and equipment(143.9)(203.9)
Other(47.6)(46.3)
  Total gross deferred tax liabilities(1,182.2)(1,265.2)
Net deferred tax liabilities$(691.3)$(753.4)
The table below provides a rollforward of the valuation allowance.
December 31, 2021December 31, 2020December 31, 2019
Beginning balance$167.6 $145.4 $156.9 
Additions charged to expense6.8 5.8 — 
Reductions and other adjustments(25.2)16.4 (11.5)
Ending balance$149.2 $167.6 $145.4 
The Company has U.S. federal tax loss carryforwards of approximately $155.7, which expire periodically through 2036, as well as post 2017 carryovers of $0.1 that are limited to 80% of taxable income and have an indefinite carryover. The utilization of tax loss carryforwards is limited due to change of ownership rules; however, at this time, the Company expects to fully utilize substantially all U.S. federal tax loss carryforwards with the exception of approximately $3.9 for which a full valuation allowance has been provided. The Company has U.S. state tax loss carryforwards of $439.2, which also expire periodically through 2038, and on which a valuation allowance of $367.2 has been provided. In addition to federal and state tax loss carryforwards, the Company has other federal and state attribute carry forwards of $141.4. These attribute carryforwards have indefinite lives and a valuation allowance of $99.1. The Company has foreign tax loss carryforwards of $96.2 which have an indefinite life and on which a valuation allowance of $11.0 has been provided, as well as foreign tax loss carryforwards of $444.0 which expire periodically through 2034 that have a full valuation allowance. In addition to the foreign net operating losses, the Company has a foreign capital loss carryforward of $15.5. The foreign capital loss carryforward has an indefinite life and has a full valuation allowance.
The valuation allowance decreased from $167.6 in 2020 to $149.2 in 2021 primarily due to utilization of state tax attributes and foreign net operating losses.
Unrecognized income tax benefits were $52.4 and $48.8 at December 31, 2021, and 2020, respectively. It is anticipated that the amount of the unrecognized income tax benefits will change within the next 12 months; however, these changes are not expected to have a significant impact on the results of operations, cash flows or the financial position of the Company.
The Company recognizes interest and penalties related to unrecognized income tax benefits in income tax expense. Accrued interest and penalties related to uncertain tax positions totaled $6.5 and $8.3 as of December 31, 2021, and 2020, respectively. During the years ended December 31, 2021, 2020 and 2019, the Company recognized $1.6, $4.4 and $2.0, respectively, in interest and penalties expense, which was offset by a benefit from reversing previous accruals for interest and penalties of $3.4, $3.0 and $5.8, respectively. As of December 31, 2021 and 2020 interest expense of $0.0, and $1.4, respectively, was added to accrued interest from the opening balance sheet of an acquisition.
The following table shows a reconciliation of the unrecognized income tax benefits, excluding interest and penalties, from uncertain tax positions for the years ended December 31, 2021, 2020 and 2019:
 202120202019
Balance as of January 1$48.8 $31.7 $18.0 
Increase in reserve for tax positions taken in the current year31.1 17.3 10.3 
Increase in reserve from an acquisition's opening balance sheet— 8.2 8.4 
Decrease in reserve as a result of payments(7.1)(0.3)(0.8)
Decrease in reserve as a result of lapses in the statute of limitations(20.4)(8.1)(4.2)
Balance as of December 31$52.4 $48.8 $31.7 
Also included in the balance of unrecognized tax benefits as of December 31, 2021, 2020 and 2019, are $0.9, $2.1 and $0.0, respectively, of tax benefits that, if recognized, would result in adjustments to other tax accounts, primarily deferred taxes. As of December 31, 2021, 2020 and 2019 there are $51.5, $46.7 and $31.7, respectively, of tax benefits that, if recognized would favorably affect the effective income tax rate.
The Company has substantially concluded all U.S. federal income tax matters for years through 2017. Substantially all material state and local and foreign income tax matters have been concluded through 2014 and 2010, respectively.
The Company has various state and foreign income tax examinations ongoing throughout the year. The Company believes adequate provisions have been recorded related to all open tax years.
As a result of the TCJA, the Company was effectively taxed on all of its previously unremitted foreign earnings. The TCJA also enacts a territorial tax system that allows, for the most part, tax-free repatriation of foreign earnings. The Company still considers the earnings of its foreign subsidiaries to be permanently reinvested, but if repatriation were to occur the Company would be required to accrue U.S. taxes, if any, and remit applicable withholding taxes as appropriate. The Company has unremitted earnings and profits of $1,291.8 and $702.4 that are permanently reinvested in its foreign subsidiaries as of December 31, 2021, and 2020, respectively. A determination of the amount of the unrecognized deferred tax liability related to these undistributed earnings is not practicable due to the complexity and variety of assumptions necessary based on the manner in which the undistributed earnings would be repatriated.