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INCOME TAXES
 12 Months Ended
Dec. 31, 2022
Income Tax Disclosure [Abstract]  
INCOME TAXES INCOME TAXES
The sources of income before taxes, classified between domestic and foreign entities, are as follows:
202220212020
Domestic$1,321.0 $2,580.6 $1,846.5 
Foreign261.6 546.0 372.5 
Total pre-tax income$1,582.6 $3,126.6 $2,219.1 
The components of income tax expense attributable to continuing operations are as follows:
 Years Ended December 31,
 202220212020
Current tax expense:   
Federal$189.4 $545.5 $455.3 
State40.1 171.9 172.8 
Foreign65.3 107.7 81.0 
 $294.8 $825.1 $709.1 
Deferred tax expense/(benefit):   
Federal$7.8 $(64.6)$(6.7)
State(5.4)(13.7)(28.1)
Foreign4.8 0.3 (12.2)
 7.2 (78.0)(47.0)
 Total income tax expense$302.0 $747.1 $662.1 
The effective tax rates on earnings before income taxes are reconciled to statutory U.S. income tax rates as follows:
 Years Ended December 31,
 202220212020
Statutory U.S. rate21.0 %21.0 %21.0 %
State and local income taxes, net of U.S. federal income tax effect3.7 3.9 5.3 
Foreign earnings taxed at lower rates than the statutory U.S. rate(0.5)(0.5)(0.4)
Tax credits(4.4)(0.1)— 
Impairment of assets2.7 — 4.0 
Deferred tax adjustments(1.9)(0.1)0.1 
Other(1.6)(0.3)(0.2)
Effective rate19.0 %23.9 %29.8 %
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, 2022December 31, 2021
Deferred tax assets:  
Accounts receivable$22.5 $22.3 
Employee compensation and benefits114.2 145.2 
Operating lease liability189.4 176.3 
Acquisition and restructuring reserves10.3 19.1 
Capitalized R&D costs54.4 — 
Tax loss carryforwards242.6 184.5 
Other116.4 92.7 
  Total gross deferred tax assets749.8 640.1 
Less: valuation allowance(151.3)(149.2)
Deferred tax assets, net of valuation allowance$598.5 $490.9 
Deferred tax liabilities:  
Right of use asset$(172.7)$(166.9)
Intangible assets(811.1)(823.8)
Property, plant and equipment(188.0)(143.9)
Other(87.9)(47.6)
Total gross deferred tax liabilities$(1,259.7)$(1,182.2)
Net deferred tax liabilities$(661.2)$(691.3)
The table below provides a rollforward of the valuation allowance:
December 31, 2022December 31, 2021December 31, 2020
Beginning balance$149.2 $167.6 $145.4 
Additions charged to expense10.2 6.8 5.8 
Reductions and other adjustments(8.1)(25.2)16.4 
Ending balance$151.3 $149.2 $167.6 
The Company has U.S. federal tax loss carryforwards of approximately $161.5, which expire periodically through 2037, as well as post-2017 carryforwards of $202.7 that are limited to 80% of taxable income and have an indefinite carryforward period. 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 $6.5 for which a full valuation allowance has been provided. The Company has U.S. state tax loss carryforwards of $485.5, a portion of which expire annually, and on which a valuation allowance of $340.0 has been provided. In addition to federal and state tax loss carryforwards, the Company has other federal and state attribute carryforwards of $129.6. A portion of these attribute carryforwards will expire through 2027 and have a valuation allowance of $88.1 while the remainder have indefinite carryforward periods. The Company has foreign tax loss carryforwards of $115.7, the majority of which have indefinite carryforward periods, but a valuation allowance of $20.3 has been provided for jurisdictions where the future tax benefits of the attributes are not more likely than not to be realized. Additionally, the Company has foreign tax loss carryforwards of $444.2 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 $26.6 with an indefinite carryforward period and a full valuation allowance.
The valuation allowance increased from $149.2 in 2021 to $151.3 in 2022 primarily due to the establishment of valuation allowances related to acquired attributes and U.K. losses, offset by the partial release of the valuation allowance on U.S. capital losses.
Unrecognized income tax benefits were $44.0 and $52.4 at December 31, 2022, and 2021, respectively. It is anticipated that the amount of the unrecognized income tax benefits will decrease by $10.6 within the next 12 months due to statute of limitation lapses and anticipated audit settlements; 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 $4.7 and $6.5 as of December 31, 2022, and 2021, respectively. During the years ended December 31, 2022, 2021 and 2020, the Company recognized $1.6, $1.6 and $4.4, respectively, in
interest and penalties expense, which was offset by a benefit from reversing previous accruals for interest and penalties of $3.3, $3.4 and $3.0, respectively.
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, 2022, 2021 and 2020:
 202220212020
Balance as of January 1$52.4 $48.8 $31.7 
Increase in reserve for tax positions taken in the current year12.4 31.1 17.3 
Increase in reserve from an acquisition's opening balance sheet— — 8.2 
Decrease in reserve as a result of payments(13.5)(7.1)(0.3)
Decrease in reserve as a result of lapses in the statute of limitations(7.3)(20.4)(8.1)
Balance as of December 31$44.0 $52.4 $48.8 
Also included in the balance of unrecognized tax benefits as of December 31, 2022, 2021 and 2020, are $0.0, $0.9 and $2.1, respectively, of tax benefits that, if recognized, would result in adjustments to other tax accounts, primarily deferred taxes. As of December 31, 2022, 2021 and 2020 there are $44.0, $51.5 and $46.7, respectively, of tax benefits that, if recognized, would favorably impact the effective income tax rate.
The Company has substantially concluded all U.S. federal income tax matters for years through 2018 and is currently under IRS examination for tax years 2019 and 2020. Substantially all material state and local and foreign income tax matters have been concluded through 2015 and 2012, 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 Tax Cuts and Jobs Act (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 $1,726.3 and $1,291.8 that are permanently reinvested in its foreign subsidiaries as of December 31, 2022, and 2021, 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.