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Income Taxes
 12 Months Ended
Dec. 31, 2022
Income Tax Disclosure [Abstract]  
Income Taxes
We have been organized and have operated as a REIT effective beginning with our taxable year that ended on December 31, 2014. As a REIT, we are generally permitted to deduct from our federal taxable income the dividends we pay to our stockholders. The income represented by such dividends is not subject to federal taxation at the entity level but is taxed, if at all, at the stockholder level. The income of our domestic TRSs, which hold our domestic operations that may not be REIT-compliant as currently operated and structured, is subject, as applicable, to federal and state corporate income tax. In addition, we and our subsidiaries continue to be subject to foreign income taxes in other jurisdictions in which we have business operations or a taxable presence, regardless of whether assets are held or operations are conducted through subsidiaries disregarded for federal income tax purposes or TRSs. We will also be subject to a separate corporate income tax on any gains recognized on the sale or disposition of any asset previously owned by a C corporation during a five-year period after the date we first owned the asset as a REIT asset that are attributable to "built-in gains" with respect to that asset on that date. We will also be subject to a built-in gains tax on our depreciation recapture recognized into income as a result of accounting method changes in connection with our acquisition activities. If we fail to remain qualified for taxation as a REIT, we will be subject to federal income tax at regular corporate income tax rates. Even if we remain qualified for taxation as a REIT, we may be subject to some federal, state, local and foreign taxes on our income and property in addition to taxes owed with respect to our TRS operations. In particular, while state income tax regimes often parallel the federal income tax regime for REITs, many states do not completely follow federal rules and some do not follow them at all.
The significant components of our deferred tax assets and deferred tax liabilities as of December 31, 2022 and 2021 are presented below:
 DECEMBER 31,
 20222021
Deferred Tax Assets:  
Accrued liabilities and other adjustments$80,159 $54,859 
Net operating loss carryforwards97,161 90,996 
Valuation allowance(47,514)(51,744)
129,806 94,111 
Deferred Tax Liabilities:  
Other assets, principally due to differences in amortization(243,150)(178,657)
Plant and equipment, principally due to differences in depreciation(78,486)(76,204)
Other(52,786)(46,281)
(374,422)(301,142)
Net deferred tax liability$(244,616)$(207,031)
The deferred tax assets and deferred tax liabilities as of December 31, 2022 and 2021 are presented below:
 DECEMBER 31,
 20222021
Noncurrent deferred tax assets (Included in Other, a component of Other assets, net)$18,389 $16,903 
Deferred income taxes(263,005)(223,934)
At December 31, 2022, we have federal net operating loss carryforwards of $63,497, which can be carried forward indefinitely, of which $57,132 is expected to be realized to reduce future federal taxable income. We have assets for foreign net operating losses of $81,872, with various expiration dates (and in some cases no expiration date), subject to a valuation allowance of approximately 56.0%. If actual results differ unfavorably from certain of our estimates used, we may not be able to realize all or part of our net deferred income tax assets and additional valuation allowances may be required. Although we believe our estimates are reasonable, no assurance can be given that our estimates reflected in the tax provisions and accruals will equal our actual results. These differences could have a material impact on our income tax provision and operating results in the period in which such determination is made.
Rollforward of the valuation allowance is as follows:
YEAR ENDED DECEMBER 31,BALANCE AT BEGINNING OF
THE YEAR		(CREDITED) CHARGED TO
EXPENSE
OTHER (DECREASES)/
INCREASES(1)
BALANCE
AT END OF
THE YEAR
2022$51,744 $(1,333)$(2,897)$47,514 
202146,938 8,406 (3,600)51,744 
202060,003 (8,337)(4,728)46,938 
(1)Other decreases and increases in valuation allowances are primarily related to changes in foreign currency exchange rates.
The components of net income (loss) before provision (benefit) for income taxes for the years ended December 31, 2022, 2021 and 2020 are as follows:
 YEAR ENDED DECEMBER 31,
 202220212020
United States$449,241 $212,460 $276,145 
Canada103,826 78,780 52,332 
Other Foreign78,571 337,775 44,228 
Net income (loss) before provision (benefit) for income taxes$631,638 $629,015 $372,705 
The provision (benefit) for income taxes for the years ended December 31, 2022, 2021 and 2020 consist of the following components:
 YEAR ENDED DECEMBER 31,
 202220212020
Federal—current$24,331 $54,867 $(10,424)
Federal—deferred(30,581)14,322 8,834 
State—current8,553 9,566 2,956 
State—deferred(3,728)(526)(625)
Foreign—current92,525 83,154 50,063 
Foreign—deferred(21,611)14,907 (21,195)
Provision (Benefit) for Income Taxes$69,489 $176,290 $29,609 
A reconciliation of total income tax expense and the amount computed by applying the current federal statutory tax rate of 21.0% to net income (loss) before provision (benefit) for income taxes for the years ended December 31, 2022, 2021 and 2020, respectively, is as follows:
 YEAR ENDED DECEMBER 31,
 202220212020
Computed "expected" tax provision
$132,644 $132,093 $78,268 
Changes in income taxes resulting from:   
Tax adjustment relating to REIT(82,620)(8,203)(60,378)
State taxes (net of federal tax benefit)4,043 8,027 2,258 
(Decrease) increase in valuation allowance (net operating losses)(1,333)8,406 (8,337)
Withholding taxes10,600 23,654 6,835 
Reserve (reversal) accrual and audit settlements (net of federal tax benefit)40 3,072 (7,409)
Remeasurement of the Deferred Purchase Obligation(19,656)— — 
Foreign tax rate differential22,227 9,856 9,472 
Disallowed foreign interest, Subpart F income, and other foreign taxes2,820 (3,437)13,407 
Other, net724 2,822 (4,507)
Provision (Benefit) for Income Taxes$69,489 $176,290 $29,609 
Our effective tax rates for the years ended December 31, 2022, 2021 and 2020 were 11.0%, 28.0% and 7.9%, respectively. Our effective tax rate is subject to variability in the future due to, among other items: (i) changes in the mix of income between our QRSs and our TRSs, as well as among the jurisdictions in which we operate; (ii) tax law changes; (iii) volatility in foreign exchange gains and losses; (iv) the timing of the establishment and reversal of tax reserves; (v) our ability to utilize net operating losses that we generate and (vi) the taxability or deductibility of significant transactions.
The primary reconciling items between the federal statutory tax rate of 21.0% and our overall effective tax rate were:
YEAR ENDED DECEMBER 31,
202220212020
The benefits derived from the dividends paid deduction of $82,620 and the differences in the tax rates to which our foreign earnings are subject of $22,227. In addition, there were gains and losses recorded in Other (income) expense, net and Gain (loss) on disposal/write-down of property, plant and equipment, net during the period for which there were insignificant tax impacts.
The benefit derived from the dividends paid deduction of $8,203 which was offset by (i) the impact of differences in the tax rates at which our foreign earnings are subject to, resulting in a tax provision of $9,856, and (ii) foreign withholding taxes of $23,654, which were either paid during the year or accrued, for the deferred tax liability for the U.S. tax impact of undistributed earnings of foreign TRSs that are no longer intended to be permanently reinvested outside the United States.
The benefit derived from the dividends paid deduction of $60,378 and the impact of differences in the tax rates at which our foreign earnings are subject to, resulting in a tax provision of $9,472.
As a REIT, we are entitled to a deduction for dividends paid, resulting in a substantial reduction of federal income tax expense. As a REIT, substantially all of our income tax expense will be incurred based on the earnings generated by our foreign subsidiaries and our domestic TRSs.
During 2021, as a result of the enactment of a tax law and the closing of various acquisitions, we concluded that it is no longer our intention to reinvest our undistributed earnings of our foreign TRSs indefinitely outside the United States. As a REIT, future repatriation of incremental undistributed earnings of our foreign subsidiaries will not be subject to federal or state income tax, with the exception of foreign withholding taxes. However, such future repatriations may require distributions to our stockholders in accordance with REIT distribution rules, and any such distribution may then be taxable, as appropriate, at the stockholder level. We expect to provide for foreign withholding taxes on the current and future earnings of all of our foreign subsidiaries as the result of such reassessment.
The Organization for Economic Co-operation and Development (the "OECD"), an international association comprised of 38 countries, including the United States, has issued proposals that change long-standing tax principles including on a global minimum tax initiative. On December 12, 2022, the European Union member states agreed to implement the OECD’s Base Erosion and Profit Shifting ("BEPS") 2.0 Pillar Two global corporate minimum tax rate of 15% on companies with revenues of at least $790,000, which would go into effect in 2024. Other countries are also actively considering changes to their tax laws to adopt certain parts of the OECD’s proposals. In December 2022, South Korea enacted new global minimum tax rules to align with OECD BEPS 2.0 Pillar Two. We will continue to monitor regulatory developments to assess potential impacts of OECD proposals on us.
The evaluation of an uncertain tax position is a two-step process. The first step is a recognition process whereby we determine whether it is more likely than not that a tax position will be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position. The second step is a measurement process whereby a tax position that meets the more likely than not recognition threshold is calculated to determine the amount of benefit to recognize in the financial statements. The tax position is measured as the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement.
We have elected to recognize interest and penalties associated with uncertain tax positions as a component of the provision (benefit) for income taxes in the accompanying Consolidated Statements of Operations. We recorded increases of $90 and $823 for gross interest and penalties for the years ended December 31, 2022 and 2021, respectively. We recorded a decrease of $1,499 for gross interest and penalties for the years ended December 31, 2020. We had $6,635 and $6,805 accrued for the payment of interest and penalties as of December 31, 2022 and 2021, respectively.
A summary of tax years that remain subject to examination by major tax jurisdictions is as follows:
TAX YEARSTAX JURISDICTION
See BelowUnited States—Federal and State
2019 to presentUnited Kingdom
2015 to presentCanada
The normal statute of limitations for United States federal tax purposes is three years from the date the tax return is filed; however, the statute of limitations may remain open for periods longer than three years in instances where a federal tax examination is in progress. The 2021, 2020 and 2019 tax years remain subject to examination for United States federal tax purposes as well as net operating loss carryforwards utilized in these years. The normal statute of limitations for state purposes is between three to five years. However, certain of our state statute of limitations remain open for periods longer than this when audits are in progress.
We are subject to income taxes in the United States and numerous foreign jurisdictions. We are subject to examination by various tax authorities in jurisdictions in which we have business operations or a taxable presence. We regularly assess the likelihood of additional assessments by tax authorities and provide for these matters as appropriate. As of December 31, 2022, we had $27,753 of reserves related to uncertain tax positions, of which $24,671 and $3,082 is included in other long-term liabilities and deferred income taxes, respectively, in the accompanying Consolidated Balance Sheet. As of December 31, 2021, we had $27,772 of reserves related to uncertain tax positions, of which $24,627 and $3,145 is included in other long-term liabilities and deferred income taxes, respectively, in the accompanying Consolidated Balance Sheet. Although we believe our tax estimates are appropriate, the final determination of tax audits and any related litigation could result in changes in our estimates.
A rollforward of unrecognized tax benefits is as follows:
Gross tax contingencies—January 1, 2020$35,068 
Gross additions based on tax positions related to the current year2,907 
Gross additions for tax positions of prior years80 
Gross reductions for tax positions of prior years(5,617)
Lapses of statutes(4,480)
Settlements(1,989)
Gross tax contingencies—December 31, 202025,969 
Gross additions based on tax positions related to the current year3,893 
Gross additions for tax positions of prior years344 
Gross reductions for tax positions of prior years(536)
Lapses of statutes(1,663)
Settlements(235)
Gross tax contingencies—December 31, 202127,772 
Gross additions based on tax positions related to the current year2,271 
Gross additions for tax positions of prior years723 
Gross reductions for tax positions of prior years(1,866)
Acquired unrecognized tax benefits1,354 
Lapses of statutes(2,501)
Gross tax contingencies—December 31, 2022$27,753 
The reversal of these reserves of $27,753 as of December 31, 2022 will be recorded as a reduction of our income tax provision, if sustained. We believe that it is reasonably possible that an amount up to approximately $5,977 of our unrecognized tax positions may be recognized by the end of 2023 as a result of a lapse of statute of limitations or upon closing and settling significant audits in various worldwide jurisdictions.