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Income Taxes | 12 Months Ended
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Dec. 31, 2022
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes Income before the provision for income taxes is attributable to the following jurisdictions for years ended December 31 (in thousands):
|  | 2022 |  | 2021 |  | 2020
United States |  | $ | 506,214 |  |  | $ | 515,041 |  |  | $ | 457,090 |
Foreign |  | 769,446 |  |  | 593,767 |  |  | 425,435 |
Total |  | $ | 1,275,660 |  |  | $ | 1,108,808 |  |  | $ | 882,525 |
The provision for income taxes for the years ended December 31 consists of the following (in thousands):
|  | 2022 |  | 2021 |  | 2020
Current: |  |  |  |  |  |
Federal |  | $ | 166,172 |  |  | $ | 118,861 |  |  | $ | 71,123 |
State |  | 34,947 |  |  | 31,674 |  |  | 19,597 |
Foreign |  | 153,388 |  |  | 107,751 |  |  | 71,921 |
Total current |  | 354,507 |  |  | 258,286 |  |  | 162,641 |
Deferred: |  |  |  |  |  |
Federal |  | (36,613) |  |  | (12,165) |  |  | 143 |
State |  | (6,066) |  |  | (4,540) |  |  | (4,323) |
Foreign |  | 9,505 |  |  | 27,730 |  |  | 19,848 |
Total deferred |  | (33,174) |  |  | 11,025 |  |  | 15,668 |
Total provision |  | $ | 321,333 |  |  | $ | 269,311 |  |  | $ | 178,309 |
The provision for income taxes differs from amounts computed by applying the U.S. federal tax rate of 21% for 2022, 2021, and 2020, respectively, to income before income taxes for the years ended December 31, 2022, 2021, and 2020 due to the following (in thousands):
|  | 2022 |  | 2021 |  | 2020
Computed “expected” tax expense |  | $ | 267,889 |  |  | 21.0 | % |  | $ | 232,850 |  |  | 21.0 | % |  | $ | 185,330 |  |  | 21.0 | %
Changes resulting from: |  |  |  |  |  |  |  |  |  |  |  |
Change in valuation allowance |  | 22,399 |  |  | 1.8 |  |  | 1,378 |  |  | 0.1 |  |  | 25,932 |  |  | 2.9 |
Foreign income tax differential |  | 566 |  |  | — |  |  | (10,326) |  |  | (0.9) |  |  | (20,852) |  |  | (2.3) |
State taxes net of federal benefits |  | 12,745 |  |  | 1.0 |  |  | 18,352 |  |  | 1.7 |  |  | 7,489 |  |  | 0.8 |
Increase in tax expense due to uncertain tax positions |  | 8,257 |  |  | 0.6 |  |  | 8,185 |  |  | 0.7 |  |  | 14,848 |  |  | 1.7 |
Foreign withholding tax |  | 13,547 |  |  | 1.1 |  |  | 9,143 |  |  | 0.8 |  |  | 15,630 |  |  | 1.8 |
Change in indefinite reinvestment - Russia |  | (9,049) |  |  | (0.7) |  |  | — |  |  | — |  |  | — |  |  | — |
Excess tax benefits related to stock-based compensation |  | (10,000) |  |  | (0.8) |  |  | (16,304) |  |  | (1.5) |  |  | (58,942) |  |  | (6.7) |
Sub-part F Income/GILTI |  | 79,420 |  |  | 6.2 |  |  | 72,449 |  |  | 6.5 |  |  | 34,990 |  |  | 4.0 |
Foreign tax credits |  | (73,974) |  |  | (5.8) |  |  | (63,926) |  |  | (5.8) |  |  | (30,497) |  |  | (3.5) |
Foreign source non-deductible interest |  | 9,462 |  |  | 0.7 |  |  | 10,348 |  |  | 0.9 |  |  | 6,986 |  |  | 0.8 |
IRC section 162(m) adjustment |  | 8,119 |  |  | 0.6 |  |  | 3,665 |  |  | 0.3 |  |  | 1,393 |  |  | 0.2 |
Brazil tourism tax benefit |  | (13,810) |  |  | (1.1) |  |  | — |  |  | — |  |  | — |  |  | — |
Other |  | 5,762 |  |  | 0.5 |  |  | 3,497 |  |  | 0.3 |  |  | (3,998) |  |  | (0.5) |
Provision for income taxes |  | $ | 321,333 |  |  | 25.2 | % |  | $ | 269,311 |  |  | 24.3 | % |  | $ | 178,309 |  |  | 20.2 | %
The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities at December 31 are as follows (in thousands):
|  | 2022 |  | 2021
Deferred tax assets: |  |  |  |
Accounts receivable, principally due to the allowance for credit losses |  | $ | 19,508 |  |  | $ | 13,987 |
Accrued expenses not currently deductible for tax |  | 7,307 |  |  | 6,252 |
Lease deferral |  | 18,146 |  |  | 20,349 |
Interest rate swap |  | — |  |  | 7,621 |
Stock based compensation |  | 41,202 |  |  | 39,658 |
Income tax credits |  | 62,512 |  |  | 51,264 |
Net operating loss carry forwards |  | 81,580 |  |  | 76,988 |
Accrued escheat |  | 3,286 |  |  | 3,170 |
Other |  | 28,773 |  |  | 10,078 |
Deferred tax assets before valuation allowance |  | 262,314 |  |  | 229,367 |
Valuation allowance |  | (117,379) |  |  | (94,601) |
Deferred tax assets, net |  | 144,935 |  |  | 134,766 |
Deferred tax liabilities: |  |  |  |
Intangibles—including goodwill |  | (504,590) |  |  | (520,349) |
Basis difference in investment in subsidiaries |  | (42,091) |  |  | (42,938) |
Interest rate swap |  | (2,964) |  |  | — |
Lease deferral |  | (15,428) |  |  | (17,739) |
Accrued expense liability |  | (742) |  |  | (795) |
Prepaid expenses |  | (1,713) |  |  | (1,788) |
Withholding taxes |  | (31,448) |  |  | (38,704) |
Property and equipment and other |  | (72,076) |  |  | (76,810) |
Deferred tax liabilities |  | (671,052) |  |  | (699,123) |
Net deferred tax liabilities |  | $ | (526,117) |  |  | $ | (564,357) |
The Company’s deferred tax balances are classified in its balance sheets as of December 31 as follows (in thousands):
|  | 2022 |  | 2021
Long term deferred tax assets and liabilities: |  |  |  |
Long term deferred tax assets |  | $ | 1,348 |  |  | $ | 1,934 |
Long term deferred tax liabilities |  | (527,465) |  |  | (566,291) |
Net deferred tax liabilities |  | $ | (526,117) |  |  | $ | (564,357) |
The valuation allowances relate to capital loss carryforwards, income tax credits, state 163(j) carryforward, foreign net operating loss carryforwards and state net operating loss carryforwards. The net change in the total valuation allowance for the year ended December 31, 2022 was an increase of $22.8 million. The valuation allowance increase was primarily due to net operating losses generated in certain states where the Company and its subsidiaries file on a separate company basis as well as an increase in foreign net operating losses where significant negative evidence on future utilization was considered. As of December 31, 2022, the Company had a net operating loss carryforward for U.S. federal income tax purposes of approximately $3.6 million gross of tax that is available to offset U.S. federal taxable income indefinitely. The Company had a net operating loss carryforward for state income tax purposes of approximately $901.7 million gross of tax that is available to offset future state taxable income indefinitely, and in some cases subject to expiration in 15 or 20 years. Additionally, the Company had $95.0 million net operating loss carryforwards gross of tax that are available to offset future foreign taxable income. Most foreign net operating loss carryforwards will not expire in future years. The Company has provided a valuation allowance against $47.2 million of its deferred tax asset related to the net operating losses as it does not anticipate utilizing the losses in the foreseeable future. In addition, the Company has foreign tax credits for foreign income purposes in the amount of $62.5 million. The Company has provided a valuation allowance against $62.5 million of the tax credits as it does not anticipate utilizing the credits in the foreseeable future. During 2022 and 2021, the Company had recorded accrued interest and penalties related to the unrecognized tax benefits of $4.4 million and $5.6 million, respectively. Accumulated interest and penalties were $22.7 million and $18.1 million on the Consolidated Balance Sheets at December 31, 2022 and 2021, respectively. In accordance with the Company's accounting policy, interest and penalties related to unrecognized tax benefits are included as a component of income tax expense. A reconciliation of the beginning and ending balances of the total amounts of gross unrecognized tax benefits excluding interest and penalties for the years ended December 31, 2022, 2021, and 2020 is as follows (in thousands):
Unrecognized tax benefits at December 31, 2019 |  | $ | 42,773 |
Additions based on tax provisions related to the current year |  | 6,412 |
Additions based on tax provisions related to the prior year |  | 13,532 |
Deduction of cumulative interest and penalties |  | (12,508) |
Deductions based on settlement/expiration of prior year tax positions |  | (14,460) |
Unrecognized tax benefits at December 31, 2020 |  | 35,749 |
Additions based on tax provisions related to the current year |  | 8,543 |
Additions based on tax provisions related to the prior year |  | 5,909 |
Deductions based on settlement of prior year tax positions |  | (2,122) |
Deductions based on expiration of prior year tax positions |  | (1,058) |
Unrecognized tax benefits at December 31, 2021 |  | 47,021 |
Additions based on tax provisions related to the current year |  | 7,752 |
Additions based on tax provisions related to the prior year |  | 200 |
Deductions based on expiration of prior year tax positions |  | (1,550) |
Addition for cumulative federal benefit of state tax deductions |  | 7,281 |
Change due to OCI |  | (35) |
Unrecognized tax benefits at December 31, 2022 |  | $ | 60,669 |
In prior years, the Company included federal benefits of state tax deductions related to unrecognized tax benefits in its tabular reconciliation above. A cumulative adjustment was made in 2022 to remove these amounts from the above tabular disclosure. As of December 31, 2022, the Company had total unrecognized tax benefits of $60.7 million all of which, if recognized, would affect its effective tax rate. It is not anticipated that there are any unrecognized tax benefits that will significantly increase or decrease within the next twelve months. The Company files numerous consolidated and separate income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions. The statute of limitations for the Company’s U.S. federal income tax returns has expired for years prior to 2015. The statute of limitations for most state income tax returns has expired for years prior to 2019. The statute of limitations has expired for years prior to 20 19 for the Company’s Russian income tax returns, 2017 for the Company’s Mexican income tax returns, and 2017 for the Company’s Luxembourg income tax returns.

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