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INCOME TAX
 12 Months Ended
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,
202220212020
(in thousands)
Current income tax expense (benefit): 
Federal$277,120 $195,804 $124,176 
State68,120 58,772 35,840 
Foreign125,580 103,781 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,
202220212020
(in thousands)
United States$(189,030)$537,586 $194,190 
Foreign413,352 506,959 399,766 
$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,
202220212020
Federal U.S. statutory rate21.0 %21.0 %21.0 %
Goodwill impairment78.0 — — 
Sale of Russian business12.1 — — 
State income taxes, net of federal income tax benefit9.0 3.4 0.7 
Foreign inclusion, net of foreign tax credits8.2 1.0 0.9 
Nondeductible executive compensation4.7 1.0 1.7 
Share-based compensation expense2.0 (0.2)(2.7)
Foreign income taxes1.4 0.3 0.6 
Deemed royalty1.2 — — 
Equity method investment partnership income0.1 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 rate74.3 %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:

20222021
(in thousands)
Deferred income tax assets:
Research and development costs$148,023 $— 
Foreign net operating loss carryforwards129,882 104,499 
Lease liabilities106,884 130,328 
Financial instruments92,477 37,928 
Credit carryforwards48,930 49,875 
Accrued expenses44,819 42,839 
Share-based compensation expense41,344 36,086 
Domestic net operating loss carryforwards31,160 29,806 
Other68,258 42,945 
711,777 474,306 
Valuation allowance(110,043)(112,259)
601,734 362,047 
Deferred tax liabilities:
Acquired intangibles2,376,564 2,580,489 
Property and equipment363,457 261,764 
Partnership interests145,776 136,022 
Right-of-use assets69,773 94,739 
Other36,669 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:

20222021
(in thousands)
Noncurrent deferred income tax asset$(37,907)$(12,117)
Noncurrent deferred income tax liability2,428,412 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$(72,042)
Allowance for foreign net operating loss carryforwards(63,113)
Allowance for foreign credit carryforwards(2,486)
Allowance for state credit carryforwards2,932 
Allowance for domestic net operating loss carryforwards2,178 
Balance at December 31, 2020(132,531)
Allowance for foreign net operating loss carryforwards5,804 
Allowance for foreign credit carryforwards12,656 
Allowance for state credit carryforwards(1,995)
Allowance for domestic net operating loss carryforwards3,807 
Balance at December 31, 2021(112,259)
Allowance for foreign net operating loss carryforwards(122)
Allowance for foreign credit carryforwards60 
Allowance for state credit carryforwards2,282 
Allowance for domestic net operating loss carryforwards(4)
Balance at December 31, 2022$(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,
202220212020
(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 years911 2,289 7,968 
Additions based on income tax positions related to the current year7,045 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.