TAXES ON INCOME

12 Months Ended

Dec. 31, 2023

Income Tax Disclosure [Abstract]

TAXES ON INCOME

TAXES ON INCOME

    The Company's pre-tax income before equity in earnings of equity method investees consisted of approximately $1.1 billion, $1.2 billion and $2.5 billion from U.S. operations and pre-tax income of $7 million, $2 million and $148 million from foreign operations for the years ended December 31, 2023, 2022 and 2021, respectively.     

    The components of income tax expense (benefit) for 2023, 2022 and 2021 were as follows:

	2023		2022		2021
Current:
Federal	$	235	$	200	$	528
State and local	59		62		123
Foreign	3		1		3
Deferred:
Federal	(38)		29		(61)
State and local	(10)		(27)		5
Foreign	(1)		(1)		(1)
Total	$	248	$	264	$	597

    A reconciliation of the federal statutory income tax rate to the Company's effective income tax rate for 2023, 2022 and 2021 was as follows:

	2023		2022		2021
Tax provision at statutory rate	21.0	%	21.0	%	21.0	%
State and local income taxes, net of federal benefit	4.6		4.7		4.1
Impact of noncontrolling interests	(1.2)		(1.4)		(0.8)
Adjustment to state deferred tax liabilities	—		(1.5)		—
Excess tax benefits on stock-based compensation arrangements	(1.0)		(1.1)		(0.7)
Return to provision true-ups	(1.8)		(1.1)		(0.8)
Impact of equity earnings	0.5		0.7		0.6
Changes in reserves for uncertain tax positions	0.9		0.7		0.4
Income tax credits	(1.2)		(0.9)		(0.4)
Other, net	0.2		0.3		(0.4)
Effective tax rate	22.0	%	21.4	%	23.0	%

    The tax effects of temporary differences that give rise to significant portions of the deferred tax assets (liabilities) as of December 31, 2023 and 2022 were as follows:

	2023		2022
Non-current deferred tax assets (liabilities):
Accounts receivable reserves	$	17	$	15
Liabilities not currently deductible	163		174
Stock-based compensation	33		32
Basis differences in investments, joint ventures and subsidiaries	(7)		(11)
Net operating loss carryforwards, net of valuation allowance	48		49
Operating lease right-of-use assets	(149)		(147)
Operating lease liabilities	162		161
Depreciation and amortization	(537)		(568)
Total non-current deferred tax liabilities, net	$	(270)	$	(295)

    As of December 31, 2023 and 2022, non-current deferred tax liabilities of $270 million and $295 million, respectively, are included in other liabilities in the consolidated balance sheet.

    As of December 31, 2023, the Company had estimated net operating loss carryforwards for federal and state income tax purposes of $8 million and $664 million, respectively, which expire at various dates through 2043. Estimated net operating loss carryforwards for foreign income tax purposes are $77 million as of December 31, 2023, some of which can be carried forward indefinitely while others expire at various dates through 2033. As of December 31, 2023, the Company had capital loss carryforwards of $17 million. As of December 31, 2023 and 2022, deferred tax assets associated with net operating loss carryforwards of $79 million and $77 million, respectively, have each been reduced by valuation allowances of $31 million and $28 million, respectively.

    Income taxes payable, including those classified as long-term in other liabilities in the consolidated balance sheet as of December 31, 2023 and 2022, were $83 million and $81 million, respectively. Prepaid income taxes were $48 million and $26 million as of December 31, 2023 and 2022, respectively, and were recorded in prepaid expenses and other current assets in the consolidated balance sheet.

    The total amount of unrecognized tax benefits as of and for the years ended December 31, 2023, 2022 and 2021 consisted of the following:

	2023		2022		2021
Balance, beginning of year	$	94	$	110	$	93
Additions:
For tax positions of current year	1		1		1
For tax positions of prior years	15		18		30
Reductions:
Changes in judgment	(6)		(7)		(6)
Expirations of statutes of limitations	(4)		(4)		(8)
Settlements	(10)		(24)		—
Balance, end of year	$	90	$	94	$	110

    The contingent liabilities for tax positions primarily relate to uncertainties associated with the realization of tax benefits derived from the allocation of income and expense among state jurisdictions, the characterization and timing of certain tax deductions associated with business combinations, certain tax credits and the deductibility of certain expenses and settlement payments.

    The total amount of unrecognized tax benefits as of December 31, 2023, that, if recognized, would affect the effective income tax rate is $71 million. Based upon the expiration of statutes of limitations, settlements and/or the conclusion of tax examinations, the Company believes it is reasonably possible that the total amount of unrecognized tax benefits may decrease by up to $12 million within the next twelve months.

    Accruals for interest expense on contingent tax liabilities are classified in income tax expense in the consolidated statements of operations. Accruals for penalties have historically been immaterial. Interest expense (income) included in income tax expense in each of the years ended December 31, 2023, 2022 and 2021 was approximately $5 million, $3 million and $(2) million, respectively. As of December 31, 2023 and 2022, the Company had approximately $17 million and $16 million, respectively, accrued, net of the benefit of a federal and state deduction, for the payment of interest on uncertain tax positions.

    The recognition and measurement of certain tax benefits includes estimates and judgment by management and inherently involves subjectivity. Changes in estimates may create volatility in the Company's effective tax rate in future periods and may be due to settlements with various tax authorities (either favorable or unfavorable), the expiration of the statute of limitations on certain tax positions and obtaining new information about particular tax positions that may cause management to change its estimates.

    In the regular course of business, various federal, state, local and foreign tax authorities conduct examinations of the Company's income tax filings and the Company generally remains subject to examination until the statute of limitations expires for the respective jurisdiction. The Internal Revenue Service has either completed its examinations of the Company's consolidated federal income tax returns or the statute of limitations has expired up through and including the 2019 tax year. At this time, the Company does not believe that there will be any material additional payments beyond its recorded contingent liability reserves that may be required as a result of these tax audits. As of December 31, 2023, a summary of the tax years that remain subject to examination, awaiting approval, are under appeal, or are otherwise unresolved for the Company's major jurisdictions are:

    United States - federal        2020 - 2022

    United States - various states    2007 - 2022