XML 36 R19.htm IDEA: XBRL DOCUMENT v3.22.0.1
INCOME TAX
 12 Months Ended
Dec. 31, 2021
Income Tax Disclosure [Abstract]  
INCOME TAX INCOME TAX
The income tax expense for the years ended December 31, 2021, 2020 and 2019 consisted of the following:
Years Ended December 31,
202120202019
(in thousands)
Current income tax expense (benefit): 
Federal$195,804 $124,176 $50,048 
State58,772 35,840 29,788 
Foreign103,781 82,456 90,895 
 358,357 242,472 170,731 
Deferred income tax expense (benefit):
Federal(178,666)(151,824)(79,813)
State(18,500)(20,607)(29,326)
Foreign7,843 7,112 598 
 (189,323)(165,319)(108,541)
$169,034 $77,153 $62,190 
 
Income tax expense allocated to noncontrolling interests was $6.8 million, $8.5 million and $12.3 million for the years ended December 31, 2021, 2020 and 2019, respectively.

The following table presents income before income taxes for the years ended December 31, 2021, 2020 and 2019:
Years Ended December 31,
202120202019
(in thousands)
United States$537,586 $194,190 $60,000 
Foreign506,959 399,766 457,925 
$1,044,545 $593,956 $517,925 

Approximately $32.7 million of our undistributed foreign earnings are considered to be indefinitely reinvested outside the United States as of December 31, 2021. Because those earnings are considered to be indefinitely reinvested, no deferred income taxes have been provided thereon. If we were to make a distribution of any portion of those earnings in the form of dividends or otherwise, any such amounts would be subject to withholding taxes payable to various foreign jurisdictions; however, the amounts would not be subject to any additional U.S. income tax.
Our effective tax rates for the years ended December 31, 2021, 2020 and 2019 differ from the federal statutory rate for those periods as follows:
Years Ended December 31,
202120202019
Federal U.S. statutory rate21.0 %21.0 %21.0 %
Foreign interest income not subject to tax(4.2)(4.2)(4.5)
Tax credits(3.8)(5.3)(3.9)
State income taxes, net of federal income tax benefit3.4 0.7 1.0 
Foreign-derived intangible income deduction(1.9)(2.8)(2.7)
Valuation allowance(1.7)(0.1)4.6 
Nondeductible executive compensation1.0 1.7 1.0 
Equity method investment partnership income0.9 1.1 — 
Uncertain tax positions(0.3)1.1 (2.6)
Foreign income taxes0.3 0.6 (0.7)
Share-based compensation expense(0.2)(2.7)(2.5)
Other1.7 1.9 1.3 
Effective tax rate16.2 %13.0 %12.0 %
Deferred income taxes are determined based on the difference between the financial statement and tax bases of assets and liabilities using enacted tax laws and rates. Deferred income taxes as of December 31, 2021 and 2020 reflect the effect of temporary differences between the amounts of assets and liabilities for financial accounting and income tax purposes. As of December 31, 2021 and 2020, principal components of deferred tax items were as follows:
20212020
(in thousands)
Deferred income tax assets:
Lease liabilities$130,328 $105,959 
Foreign net operating loss carryforwards104,499 107,931 
Credit carryforwards49,875 42,637 
Accrued expenses42,839 38,521 
Financial instruments37,928 60,340 
Share-based compensation expense36,086 41,558 
Domestic net operating loss carryforwards29,806 18,952 
Other42,945 58,107 
474,306 474,005 
Valuation allowance(112,259)(132,531)
362,047 341,474 
Deferred tax liabilities:
Acquired intangibles2,580,489 2,736,300 
Property and equipment261,764 248,375 
Partnership interests136,022 100,951 
Right-of-use assets94,739 89,734 
Other70,343 106,877 
3,143,357 3,282,237 
Net deferred income tax liability$2,781,310 $2,940,763 

The net deferred income taxes reflected in our consolidated balance sheets as of December 31, 2021 and 2020 are as follows:
20212020
(in thousands)
Noncurrent deferred income tax asset$(12,117)$(7,627)
Noncurrent deferred income tax liability2,793,427 2,948,390 
Net deferred income tax liability$2,781,310 $2,940,763 
A valuation allowance is provided against deferred tax assets when it is more likely than not that some portion or all of the deferred tax assets will not be realized. Changes to our valuation allowance during the years ended December 31, 2021, 2020 and 2019 are summarized below (in thousands):

Balance at December 31, 2018$(23,390)
Allowance for foreign net operating loss carryforwards(26,439)
Allowance for foreign credit carryforwards(15,226)
Allowance for state credit carryforwards(6,680)
Allowance for domestic net operating loss carryforwards(307)
Balance at December 31, 2019(72,042)
Allowance for foreign net operating loss carryforwards(63,113)
Allowance for foreign credit carryforwards(2,486)
Allowance for state credit carryforwards2,932 
Allowance for domestic net operating loss carryforwards2,178 
Balance at December 31, 2020(132,531)
Allowance for foreign net operating loss carryforwards5,804 
Allowance for foreign credit carryforwards12,656 
Allowance for state credit carryforwards(1,995)
Allowance for domestic net operating loss carryforwards3,807 
Balance at December 31, 2021$(112,259)

The decrease in the valuation allowance for the year ended December 31, 2021 is primarily related to the foreign net operating loss carryforwards and the foreign tax credit carryforwards which the Company determined are more likely than not to be realized. The increase in the valuation allowance related to the foreign net operating loss carryforwards for the year ended December 31, 2020 is due to the addition of a foreign affiliate net operating loss with a related full valuation allowance. The increases in the valuation allowance related to both the state and foreign credit carryforwards for the year ended December 31, 2019 relate primarily to carryforward assets recognized in connection with the Merger.

Foreign net operating loss carryforwards of $103.8 million will expire between December 31, 2024 and December 31, 2040, if not utilized. Foreign net operating loss carryforwards of $0.7 million have indefinite carryforward periods. Domestic net operating loss carryforwards of $29.8 million and tax credit carryforwards of $49.9 million will expire between December 31, 2024 and December 31, 2040, if not utilized.

We conduct business globally and file income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions. In the normal course of business, we are subject to examination by taxing authorities around the world. We are no longer subject to state income tax examinations for years ended on or before May 31, 2007, U.S. federal income tax examinations for years ended on or before December 31, 2017 and U.K. corporation tax examinations for years ended on or before December 31, 2017.
A reconciliation of the beginning and ending amounts of unrecognized income tax benefits, excluding penalties and interest, for the years ended December 31, 2021, 2020 and 2019 is as follows:
Years Ended December 31,
202120202019
(in thousands)
Balance at the beginning of the year$39,408 $29,671 $21,197 
Additions related to acquisitions387 3,186 22,283 
Reductions for income tax positions of prior years(10,875)(5,408)(14,235)
Settlements with income tax authorities(2,137)(909)(2,583)
Additions for income tax positions of prior years2,289 7,968 1,803 
Additions based on income tax positions related to the current year5,833 4,900 1,206 
Balance at the end of the year$34,905 $39,408 $29,671 

As of December 31, 2021, the total amount of gross unrecognized income tax benefits that, if recognized, would affect the provision for income taxes is $32.9 million.