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INCOME TAX | 12 Months Ended
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Dec. 31, 2022
Income Tax Disclosure [Abstract] |
INCOME TAX | INCOME TAX The income tax expense for the years ended December 31, 2022, 2021 and 2020 consisted of the following:
| Years Ended December 31,
| 2022 |  | 2021 |  | 2020
| (in thousands)
Current income tax expense (benefit): |  |  |  |  |
Federal | $ | 277,120 |  |  | $ | 195,804 |  |  | $ | 124,176 |
State | 68,120 |  |  | 58,772 |  |  | 35,840 |
Foreign | 125,580 |  |  | 103,781 |  |  | 82,456 |
| 470,820 |  |  | 358,357 |  |  | 242,472 |
Deferred income tax expense (benefit): |  |  |  |  |
Federal | (235,727) |  |  | (178,666) |  |  | (151,824) |
State | (41,770) |  |  | (18,500) |  |  | (20,607) |
Foreign | (26,629) |  |  | 7,843 |  |  | 7,112 |
| (304,126) |  |  | (189,323) |  |  | (165,319) |
| $ | 166,694 |  |  | $ | 169,034 |  |  | $ | 77,153 |
Income tax expense allocated to noncontrolling interests was $9.8 million, $6.8 million and $8.5 million for the years ended December 31, 2022, 2021 and 2020, respectively. The following table presents income (loss) before income taxes for the years ended December 31, 2022, 2021 and 2020:
| Years Ended December 31,
| 2022 |  |  |  | 2021 |  | 2020
| (in thousands)
United States | $ | (189,030) |  |  |  |  | $ | 537,586 |  |  | $ | 194,190 |
Foreign | 413,352 |  |  |  |  | 506,959 |  |  | 399,766 |
| $ | 224,322 |  |  |  |  | $ | 1,044,545 |  |  | $ | 593,956 |
Approximately $30.5 million of our undistributed foreign earnings are considered to be indefinitely reinvested outside the United States as of December 31, 2022. 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, 2022, 2021 and 2020 differ from the federal statutory rate for those periods as follows:
| Years Ended December 31,
| 2022 |  | 2021 |  | 2020
Federal U.S. statutory rate | 21.0 | % |  | 21.0 | % |  | 21.0 | %
Goodwill impairment | 78.0 |  |  | — |  |  | — |
Sale of Russian business | 12.1 |  |  | — |  |  | — |
State income taxes, net of federal income tax benefit | 9.0 |  |  | 3.4 |  |  | 0.7 |
Foreign inclusion, net of foreign tax credits | 8.2 |  |  | 1.0 |  |  | 0.9 |
Nondeductible executive compensation | 4.7 |  |  | 1.0 |  |  | 1.7 |
Share-based compensation expense | 2.0 |  |  | (0.2) |  |  | (2.7) |
Foreign income taxes | 1.4 |  |  | 0.3 |  |  | 0.6 |
Deemed royalty | 1.2 |  |  | — |  |  | — |
Equity method investment partnership income | 0.1 |  |  | 0.9 |  |  | 1.1 |
Valuation allowance | (0.2) |  |  | (1.7) |  |  | (0.1) |
Uncertain tax positions | (0.7) |  |  | (0.3) |  |  | 1.1 |
Foreign-derived intangible income deduction | (12.4) |  |  | (1.9) |  |  | (2.8) |
Tax credits | (19.5) |  |  | (3.3) |  |  | (5.2) |
Foreign interest income not subject to tax | (29.9) |  |  | (4.2) |  |  | (4.2) |
Other | (0.7) |  |  | 0.2 |  |  | 0.9 |
Effective tax rate | 74.3 | % |  | 16.2 | % |  | 13.0 | %
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, 2022 and 2021 reflect the effect of temporary differences between the amounts of assets and liabilities for financial accounting and income tax purposes. As of December 31, 2022 and 2021, principal components of deferred tax items were as follows:
| 2022 |  | 2021
| (in thousands)
Deferred income tax assets: |  |  |
Research and development costs | $ | 148,023 |  |  | $ | — |
Foreign net operating loss carryforwards | 129,882 |  |  | 104,499 |
Lease liabilities | 106,884 |  |  | 130,328 |
Financial instruments | 92,477 |  |  | 37,928 |
Credit carryforwards | 48,930 |  |  | 49,875 |
Accrued expenses | 44,819 |  |  | 42,839 |
Share-based compensation expense | 41,344 |  |  | 36,086 |
Domestic net operating loss carryforwards | 31,160 |  |  | 29,806 |
Other | 68,258 |  |  | 42,945 |
| 711,777 |  |  | 474,306 |
Valuation allowance | (110,043) |  |  | (112,259) |
| 601,734 |  |  | 362,047 |
Deferred tax liabilities: |  |  |
Acquired intangibles | 2,376,564 |  |  | 2,580,489 |
Property and equipment | 363,457 |  |  | 261,764 |
Partnership interests | 145,776 |  |  | 136,022 |
Right-of-use assets | 69,773 |  |  | 94,739 |
Other | 36,669 |  |  | 70,343 |
| 2,992,239 |  |  | 3,143,357 |
Net deferred income tax liability | $ | 2,390,505 |  |  | $ | 2,781,310 |
The net deferred income taxes reflected in our consolidated balance sheets as of December 31, 2022 and 2021 are as follows:
| 2022 |  | 2021
| (in thousands)
Noncurrent deferred income tax asset | $ | (37,907) |  |  | $ | (12,117) |
Noncurrent deferred income tax liability | 2,428,412 |  |  | 2,793,427 |
Net deferred income tax liability | $ | 2,390,505 |  |  | $ | 2,781,310 |
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, 2022, 2021 and 2020 are summarized below (in thousands):
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 carryforwards | 2,932 |
Allowance for domestic net operating loss carryforwards | 2,178 |
Balance at December 31, 2020 | (132,531) |
Allowance for foreign net operating loss carryforwards | 5,804 |
Allowance for foreign credit carryforwards | 12,656 |
Allowance for state credit carryforwards | (1,995) |
Allowance for domestic net operating loss carryforwards | 3,807 |
Balance at December 31, 2021 | (112,259) |
Allowance for foreign net operating loss carryforwards | (122) |
Allowance for foreign credit carryforwards | 60 |
Allowance for state credit carryforwards | 2,282 |
Allowance for domestic net operating loss carryforwards | (4) |
Balance at December 31, 2022 | $ | (110,043) |
The decrease in the valuation allowance for the year ended December 31, 2022 is primarily related to the utilization of state tax credit carryforwards. 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. Foreign net operating loss carryforwards of $129.2 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 $22.4 million and tax credit carryforwards of $48.2 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 December 31, 2013, U.S. federal income tax examinations for years ended on or before December 31, 2016 and U.K. corporation tax examinations for years ended on or before December 31, 2018. A reconciliation of the beginning and ending amounts of unrecognized income tax benefits, excluding penalties and interest, for the years ended December 31, 2022, 2021 and 2020 is as follows:
| Years Ended December 31,
| 2022 |  | 2021 |  | 2020
| (in thousands)
Balance at the beginning of the year | $ | 34,905 |  |  | $ | 39,408 |  |  | $ | 29,671 |
Additions related to acquisitions | — |  |  | 387 |  |  | 3,186 |
Reductions for income tax positions of prior years | (8,301) |  |  | (10,875) |  |  | (5,408) |
Settlements with income tax authorities | (3,245) |  |  | (2,137) |  |  | (909) |
Additions for income tax positions of prior years | 911 |  |  | 2,289 |  |  | 7,968 |
Additions based on income tax positions related to the current year | 7,045 |  |  | 5,833 |  |  | 4,900 |
Balance at the end of the year | $ | 31,315 |  |  | $ | 34,905 |  |  | $ | 39,408 |
As of December 31, 2022, the total amount of gross unrecognized income tax benefits that, if recognized, would affect the provision for income taxes is $29.8 million. On August 16, 2022, the U.S. government enacted the Inflation Reduction Act (the "IRA") into law. The IRA, among other things, implements a 15% corporate alternative minimum tax based on global adjusted financial statement income and a 1% excise tax on share repurchases, which shall take effect in tax years beginning after December 31, 2022. We are continuing to evaluate the provisions of the IRA, but we do not currently believe the IRA will have a material effect on our reported results, cash flows or financial position when it becomes effective. We expect to reflect the excise tax within equity as part of the repurchase price of common stock.

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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 -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI https://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI https://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI https://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
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