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Income Taxes
 12 Months Ended
Dec. 31, 2022
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
Significant components of our deferred tax assets and liabilities are as follows:
20222021
Deferred tax assets related to:
Expenses not yet deducted for tax purposes$312,445 $301,302 
Operating lease liabilities314,804 300,705 
Pension liability not yet deducted for tax purposes168,925 171,256 
Capital loss— 7,333 
Net operating loss49,787 48,865 
845,961 829,461 
Deferred tax liabilities related to:
Employee and retiree benefits225,947 235,847 
Inventory77,866 87,062 
Operating lease assets305,885 295,801 
Other intangible assets468,733 365,557 
Property, plant and equipment91,706 72,740 
Other38,597 18,176 
1,208,734 1,075,183 
Net deferred tax liability before valuation allowance(362,773)(245,722)
Valuation allowance(27,362)(34,227)
Total net deferred tax liability$(390,135)$(279,949)
We currently hold approximately $183 million in gross net operating losses, of which approximately $108 million will carry forward indefinitely. The remaining net operating losses of approximately $75 million will begin to expire in 2024.
The components of income before income taxes are as follows:
202220212020
United States$1,100,584 $762,472 $706,594 
Foreign472,018 437,874 (327,226)
Income before income taxes$1,572,602 $1,200,346 $379,368 
The components of income tax expense are as follows:
202220212020
Current:
Federal$196,634 $116,425 $130,680 
State70,453 34,311 35,474 
Foreign120,594 119,144 77,541 
Deferred:
Federal12,727 24,233 2,048 
State4,981 9,485 801 
Foreign(15,488)(2,042)(30,571)
$389,901 $301,556 $215,973 
The reasons for the difference between total tax expense and the amount computed by applying the statutory Federal income tax rate to income before income taxes are as follows:
202220212020
Statutory rate applied to income (1)$330,246 $252,073 $79,667 
Plus state income taxes, net of Federal tax benefit59,593 34,599 28,658 
Taxation of foreign operations, net (2)3,347 2,299 (9,072)
Non-deductible goodwill impairment tax effect— — 106,411 
Foreign rate change - deferred tax remeasurement— 17,032 9,045 
Valuation allowance(7,153)(2,486)1,995 
Other3,868 (1,961)(731)
$389,901 $301,556 $215,973 
(1)U.S. statutory rates applied to income are as follows: 2022, 2021 and 2020 at 21%.
(2)Our effective tax rate reflects the impact of having operations outside of the U.S. which are taxed at statutory rates different from the U.S. statutory rate, with some income being fully or partially exempt from income taxes due to various operating and financing activities.
We account for Global Intangible Low Taxed income in the year the tax is incurred as a period cost.
We, or one of our subsidiaries, file income tax returns in the U.S., various states, and foreign jurisdictions. With few exceptions, we are no longer subject to federal, state and local tax examinations by tax authorities for years before 2019 or subject to foreign income tax examinations for years ended prior to 2013. We are currently under audit in some of our state and foreign jurisdictions. Some audits may conclude in the next 12 months and the unrecognized tax benefits recorded in relation to the audits may differ from actual settlement amounts. It is not possible to estimate the effect, if any, of the amount of such change during the next 12 months to previously recorded uncertain tax positions in connection with the audits; however, we do not anticipate that total unrecognized tax benefits will significantly change in the next 12 months.
A reconciliation of the beginning and ending amounts of unrecognized tax benefits is as follows:
202220212020
Balance at beginning of year$19,501 $23,237 $21,461 
Additions based on tax positions related to the current year1,475 2,196 3,771 
Additions for tax positions of prior years89 156 3,480 
Reductions for tax positions for prior years(523)(733)(1,382)
Reduction for lapse in statute of limitations(921)(2,843)(3,765)
Settlements— (2,512)(328)
Balance at end of year$19,621 $19,501 $23,237 
The amount of gross unrecognized tax benefits, including interest and penalties, as of December 31, 2022 and 2021 was approximately $21 million and $20 million, respectively, of which approximately $19 million and $19 million, respectively, if recognized, would affect the effective tax rate.
During the tax years ended December 31, 2022, 2021 and 2020, we paid, received refunds, or accrued insignificant interest and penalties. We recognize potential interest and penalties related to unrecognized tax benefits as a component of income tax expense.
As of December 31, 2022, we estimate that we have an outside basis difference in certain foreign subsidiaries of approximately $928 million, which includes the cumulative undistributed earnings from our foreign subsidiaries. We continue to be indefinitely reinvested in this outside basis difference. Determining the amount of net unrecognized deferred tax liability related to any additional outside basis difference in these entities is not practicable. This is due to the complexities associated with the calculation to determine residual taxes on the undistributed earnings,
including the availability of foreign tax credits, applicability of any additional local withholding tax and other indirect tax consequences that may arise due to the distribution of these earnings.