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Income Taxes | 12 Months Ended
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Dec. 31, 2023
Income Taxes [Abstract] |
Income Taxes | 14.INCOME TAXES A s discussed in Note 2, the Company began operating in compliance with REIT requirements for federal income tax purposes effective January 1, 2016. As a REIT, the Company must distribute at least 90 percent of its taxable income (including dividends paid to it by its TRSs) except to the extent offset by NOLs. In addition, the Company must meet a number of other organizational and operational requirements. It is management's intention to adhere to these requirements and maintain the Company's REIT status. Most states where the Company operates conform to the federal rules recognizing REITs. Certain subsidiaries have made an election with the Company to be treated as TRSs in conjunction with the Company's REIT election; the TRS elections permit the Company to engage in certain business activities in which the REIT may not engage directly. A TRS is subject to federal and state income taxes on the income from these activities. A provision for taxes of the TRSs and of foreign branches of the REIT is included in its consolidated financial statements. Income (loss) before provision for income taxes by geographic area is as follows:
|  |  | For the year ended December 31,
|  | 2023 |  | 2022 |  | 2021
|  | (in thousands)
Domestic |  | $ | 377,150 |  | $ | 438,116 |  | $ | 265,636
Foreign |  |  | 171,353 |  |  | 87,727 |  |  | (13,072)
Total |  | $ | 548,503 |  | $ | 525,843 |  | $ | 252,564
The provision for income taxes consists of the following components:
|  |  | For the year ended December 31,
|  | 2023 |  | 2022 |  | 2021
|  | (in thousands)
Current provision: |  |  |  |  |  |  |  |  |
State |  | $ | 8,099 |  | $ | 6,115 |  | $ | 543
Foreign |  |  | 38,360 |  |  | 27,028 |  |  | 22,907
Total current |  |  | 46,459 |  |  | 33,143 |  |  | 23,450
Deferred provision (benefit) for taxes: |  |  |  |  |  |  |  |  |
Federal |  |  | 8,280 |  |  | (6,856) |  |  | 20
State |  |  | 1,431 |  |  | (956) |  |  | (2,730)
Foreign |  |  | 52,003 |  |  | 32,780 |  |  | (9,516)
Change in valuation allowance |  |  | (57,085) |  |  | 7,933 |  |  | 3,716
Total deferred |  |  | 4,629 |  |  | 32,901 |  |  | (8,510)
Total provision for income taxes |  | $ | 51,088 |  | $ | 66,044 |  | $ | 14,940
A reconciliation of the provision for income taxes at the statutory U.S. Federal tax rate (21%) and the effective income tax rate is as follows:
|  | For the year ended December 31,
|  | 2023 |  | 2022 |  | 2021
|  | (in thousands)
Statutory federal expense |  | $ | 115,186 |  | $ | 110,427 |  | $ | 53,039
Rate and permanent differences on non-U.S. earnings (1) |  |  | 31,722 |  |  | 20,996 |  |  | 9,586
State and local tax expense |  |  | 9,288 |  |  | 5,585 |  |  | (1,539)
REIT adjustment |  |  | (75,513) |  |  | (86,670) |  |  | (56,457)
Permanent differences |  |  | 11,872 |  |  | (3,257) |  |  | 6,105
Uncertain tax positions |  |  | 14,202 |  |  | — |  |  | —
Property, equipment, and intangible basis differences |  |  | — |  |  | 8,471 |  |  | —
Other |  |  | 1,416 |  |  | 2,559 |  |  | 490
Valuation allowance |  |  | (57,085) |  |  | 7,933 |  |  | 3,716
Provision for income taxes |  | $ | 51,088 |  | $ | 66,044 |  | $ | 14,940
(1)This item includes the effect of foreign exchange rate changes which were previously shown on a separate line. ‎ The components of the net noncurrent deferred income tax asset (liability) accounts are as follows:
|  |  |  |  | As of December 31,
|  |  |  |  | 2023 |  |  | 2022
|  |  |  |  | (in thousands)
Deferred tax assets: |  |  |  |  |  |  |  |  |
Net operating losses |  |  |  |  | $ | 42,064 |  | $ | 46,521
Property, equipment, and intangible basis differences |  |  |  |  |  | 25,225 |  |  | 13,506
Accrued liabilities |  |  |  |  |  | 14,945 |  |  | 12,504
Non-cash compensation |  |  |  |  |  | 29,576 |  |  | 30,501
Operating lease liability |  |  |  |  |  | 268,107 |  |  | 265,710
Deferred revenue |  |  |  |  |  | 6,348 |  |  | 5,656
Allowance for doubtful accounts |  |  |  |  |  | 2,735 |  |  | 1,430
Currency translation |  |  |  |  |  | 14,467 |  |  | 78,287
Other |  |  |  |  |  | 14,075 |  |  | 10,518
Valuation allowance |  |  |  |  |  | (16,115) |  |  | (73,546)
Total deferred tax assets, net (1) |  |  |  |  |  | 401,427 |  |  | 391,087
Deferred tax liabilities: |  |  |  |  |  |  |  |  |
Property, equipment, and intangible basis differences |  |  |  |  |  | (169,744) |  |  | (152,207)
Right of use asset |  |  |  |  |  | (254,573) |  |  | (254,368)
Straight-line rents |  |  |  |  |  | (19,029) |  |  | (18,659)
Deferred foreign withholding taxes |  |  |  |  |  | (8,322) |  |  | (9,088)
Other |  |  |  |  |  | (1,495) |  |  | (1,531)
Total deferred tax liabilities, net (1) |  |  |  |  | $ | (51,736) |  | $ | (44,766)
(1)Of these amounts, $67,473 and $119,209 are included in Other assets and Other long-term liabilities, respectively, on the accompanying Consolidated Balance Sheets as of December 31, 2023. As of December 31, 2022, $16,173 and $60,939 are included in Other assets and Other long-term liabilities, respectively, on the accompanying Consolidated Balance Sheet. A deferred tax asset is reduced by a valuation allowance if based on the weight of all available evidence, including both positive and negative evidence, it is more likely than not (a likelihood of more than 50%) that the value of such assets will not be realized. The valuation allowance should be sufficient to reduce the deferred tax asset to the amount that is more likely than not to be realized. The realization of deferred tax assets, including carryforwards and deductible temporary differences, depends upon the existence of sufficient taxable income of the same character during the carryback or carryforward period. All sources of taxable income available to realize the deferred tax asset, including the future reversal of existing temporary differences, future taxable income exclusive of reversing temporary differences and carryforwards, taxable income in carryback years and tax-planning strategies, should be considered. The Company has recorded a valuation allowance for certain deferred tax assets as management believes that it is not “more-likely-than-not” that the Company will generate sufficient taxable income in future periods to recognize the assets. Valuation allowances of $16.1 million and $73.5 million were being carried to offset net deferred income tax assets as of December 31, 2023 and 2022, respectively. The net change in the valuation allowance for the years ended December 31, 2023 and 2022 was a decrease of $57.4 million and an increase of $7.4 million, respectively. The primary reason for the reduction in the valuation allowance was the Company released the valuation allowance related to the deferred tax asset balance of the domestic TRS. The Company has available at December 31, 2023, a federal NOL carry-forward of approximately $4 34.5 million. $4 00.3 million of these NOL carry-forwards will expire between 2026 and 2037, and $34.2 million have an indefinite carry-forward. As of December 31, 2023, $382.3 million of the federal NOLs are attributes of the REIT. The Company may use these NOLs to offset its REIT taxable income, and thus any required distributions to shareholders may be reduced or eliminated until such time as the NOLs have been fully utilized. The Internal Revenue Code places limitations upon the future availability of NOLs based upon changes in the equity of the Company. If these occur, the ability of the Company to offset future income with existing NOLs may be limited. In addition, the Company has available at December 31, 2023, a foreign NOL carry-forward of $89.4 million and a net state operating tax loss carry-forward of approximately $2 62.5 million. These net operating tax loss carry-forwards began to expire in 2024. The tax losses generated in tax years 2006 and forward remain subject to audit adjustment, and tax years 2016 and forward are op en to examination by the major jurisdictions in which the Company operates. The Company is subject to income tax and other taxes in the geographic areas where it holds assets or operates, and the Company periodically receives notifications of audits, assessments, or other actions by taxing authorities. In certain jurisdictions, taxing authorities may issue notices and assessments that may not be reflective of the actual tax liability for which the Company will ultimately be liable. In the process of responding to assessments of taxes that the Company believes are not reflective of the Company’s actual tax liability, the Company avails itself of both administrative and judicial remedies. The Company evaluates the circumstances of each notification or assessment based on the information available and, in those instances in which the Company does not anticipate a successful defense of positions taken in its tax filings, a liability is recorded in the appropriate amount based on the underlying assessment. The Company records a liability for unrecognized tax benefits resulting from uncertain tax positions taken or expected to be taken in a tax return if applicable. As of December 31, 2023 and 2022, the total amount of unrecognized tax benefits are $14.2 million and $0.0 million, respectively, all of which would impact the effective rate if recognized. The Company expects the unrecognized tax benefits to change over the next 12 months if the applicable statute of limitations expire and the impact could range from zero to $2.3 million. For the period ended December 31, 2023 the Company recorded penalties and interest expense related to unrecognized tax benefits of $4.5 million as interest expense. A reconciliation of the beginning and ending amount of unrecognized tax benefits are as follows:
|  | For the year ended December 31,
|  | 2023 |  | 2022 |  | 2021
|  | (in millions)
Balance, January 1, |  | $ | — |  | $ | — |  | $ | —
Additions based on tax positions related to the current year |  |  | 5,023 |  |  | — |  |  | —
Additions and reductions for tax positions of prior years |  |  | 9,179 |  |  | — |  |  | —
Balance, December 31, |  | $ | 14,202 |  | $ | — |  | $ | —
In connection with a current assessment in Brazil, the taxing authorities have issued income tax deficiencies related to purchase accounting adjustments for tax years 2016 through 2019. The Company disagrees with the assessment and have filed an appeal with the higher appellate taxing authorities. The Company estimates that there is a more likely than not probability that the Company’s position will be sustained upon appeal. Accordingly, no liability has been recorded. The Company will continue to vigorously contest the adjustments and expect to exhaust all administrative and judicial remedies necessary to resolve the matters, which could be a lengthy process. There can be no assurance that these matters will be resolved in the Company’s favor, and an adverse outcome, or any future tax examinations involving similar assertions, could have a material effect on the Company’s results of operations or cash flows in any one period. As of December 31, 2023, the Company estimates the aggregate range of reasonably possible losses in excess of amounts accrued to be between zero and $97.8 million. This range excludes penalties and interest, which as of such date would have been $104.6 million. The Company removed the permanent reinvestment assertion as of December 31, 2018 for all foreign earnings of the Company’s foreign jurisdictions. The Company subsequently also removed its permanent reinvestment assertion on the investment in the Company’s Guatemala, El Salvador, and Nicaragua subsidiaries. As a result, the Company has recorded cumulative deferred foreign withholding taxes of $8.3 million at December 31, 2023. No additional income taxes have been provided for any additional outside basis difference inherent in these entities, as these amounts continue to be indefinitely reinvested in foreign operations except as noted in Guatemala, El Salvador, and Nicaragua. The deferred incomes taxes related to the Guatemala, El Salvador, and Nicaragua subsidiaries are immaterial and determining the amount of unrecognized deferred tax liability for any additional outside basis differences in indefinitely reinvested entities is not practicable. The U.S. government enacted comprehensive tax legislation in the form of the Tax Cuts and Jobs Act (the “Tax Act”). The Tax Act subjects a U.S. shareholder to tax on Global Intangible Low-Taxed Income (“GILTI”) earned by certain foreign subsidiaries. The FASB Staff Q&A, Topic 740, No. 5, Accounting for Global Intangible Low-Taxed Income, states that an entity can make an accounting policy election to either recognize deferred taxes for temporary basis differences expected to reverse as GILTI in future years or to provide for the tax expense related to GILTI in the year the tax is incurred as a period expense only. The Company has elected to account for GILTI in the year it is incurred.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 946 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 13 -Publisher FASB -URI https://asc.fasb.org//1943274/2147480990/946-20-50-13 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 235 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//740/tableOfContent Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 14 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-14 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-21 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 270 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482526/740-270-50-1 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 17 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-17 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479360/740-10-S99-1 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479360/740-10-S99-2 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 30 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482603/740-30-50-2 + Details
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