XML 39 R21.htm IDEA: XBRL DOCUMENT v3.24.0.1
INCOME TAX
 12 Months Ended
Dec. 31, 2023
Income Tax Disclosure [Abstract]  
INCOME TAX INCOME TAX
The income tax expense for the years ended December 31, 2023, 2022 and 2021 consisted of the following:

Years Ended December 31,
202320222021
(in thousands)
Current income tax expense (benefit): 
Federal$399,900 $277,120 $195,804 
State98,224 68,120 58,772 
Foreign209,955 125,580 103,781 
 708,079 470,820 358,357 
Deferred income tax expense (benefit):
Federal(330,647)(235,727)(178,666)
State(84,729)(41,770)(18,500)
Foreign(83,683)(26,629)7,843 
 (499,059)(304,126)(189,323)
$209,020 $166,694 $169,034 
 
Income tax expense allocated to noncontrolling interests was $12.9 million, $9.8 million and $6.8 million for the years ended December 31, 2023, 2022 and 2021, respectively.
The following table presents income (loss) before income taxes for the years ended December 31, 2023, 2022 and 2021:

Years Ended December 31,
202320222021
(in thousands)
United States$597,969 $(189,030)$537,586 
Foreign571,978 413,352 506,959 
$1,169,947 $224,322 $1,044,545 

Approximately $64.3 million of our undistributed foreign earnings are considered to be indefinitely reinvested outside the United States as of December 31, 2023. 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, 2023, 2022 and 2021 differ from the federal statutory rate for those periods as follows:

Years Ended December 31,
202320222021
Federal U.S. statutory rate21.0 %21.0 %21.0 %
Net gain on dispositions and liquidations4.3 12.1 — 
Foreign inclusion, net of foreign tax credits3.4 8.2 1.0 
Foreign income taxes2.2 1.4 0.3 
State income taxes, net of federal income tax benefit0.9 9.0 3.4 
Nondeductible executive compensation0.9 4.7 1.0 
Share-based compensation expense0.9 2.0 (0.2)
Deemed royalty0.7 1.2 — 
Uncertain tax positions0.5 (0.7)(0.3)
Goodwill impairment— 78.0 — 
Equity method investment partnership income(0.1)0.1 0.9 
Valuation allowance(0.4)(0.2)(1.7)
Foreign-derived intangible income deduction(3.8)(12.4)(1.9)
Tax credits(3.8)(19.5)(3.3)
Foreign interest income not subject to tax(9.5)(29.9)(4.2)
Other0.7 (0.7)0.2 
Effective tax rate17.9 %74.3 %16.2 %
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, 2023 and 2022 reflect the effect of temporary differences between the amounts of assets and liabilities for financial accounting and income tax purposes. As of December 31, 2023 and 2022, principal components of deferred tax items were as follows:

20232022
(in thousands)
Deferred income tax assets:
Research and development costs$267,098 $148,023 
Foreign net operating loss carryforwards187,247 129,882 
Credits144,053 48,930 
Financial instruments91,032 92,477 
Lease liabilities89,645 106,884 
Accrued expenses54,478 44,819 
Share-based compensation expense42,376 41,344 
Domestic net operating loss carryforwards34,121 31,160 
Other72,484 68,258 
982,534 711,777 
Valuation allowance(211,049)(110,043)
771,485 601,734 
Deferred tax liabilities:
Acquired intangibles2,200,082 2,376,564 
Property and equipment398,439 363,457 
Partnership interests238,139 145,776 
Right-of-use assets59,124 69,773 
Other6,094 36,669 
2,901,878 2,992,239 
Net deferred income tax liability$2,130,393 $2,390,505 

The net deferred income taxes reflected in our consolidated balance sheets as of December 31, 2023 and 2022 are as follows:

20232022
(in thousands)
Noncurrent deferred income tax asset$(111,712)$(37,907)
Noncurrent deferred income tax liability2,242,105 2,428,412 
Net deferred income tax liability$2,130,393 $2,390,505 
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, 2023, 2022 and 2021 are summarized below (in thousands):

Balance at December 31, 2020$(132,531)
Allowance for foreign net operating losses5,804 
Allowance for foreign tax credits12,656 
Allowance for state tax credits(1,995)
Allowance for domestic net operating losses3,807 
Balance at December 31, 2021(112,259)
Allowance for foreign net operating losses(122)
Allowance for foreign tax credits60 
Allowance for state tax credits2,282 
Allowance for domestic net operating losses(4)
Balance at December 31, 2022(110,043)
Allowance for foreign net operating losses(674)
Allowance for foreign tax credits(101,271)
Allowance for state tax credits3,079 
Allowance for state interest limitation(2,335)
Allowance for domestic net operating losses195 
Balance at December 31, 2023$(211,049)

The change in the valuation allowance for the year ended December 31, 2023 is primarily related to anticipatory foreign tax credits and state interest deduction carryforwards recorded in acquisition accounting offset by recognition of state tax credit carryforwards determined more likely than not to be realized. 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.

Foreign net operating loss carryforwards of $109.4 million will expire between December 31, 2024 and December 31, 2043, if not utilized. Foreign net operating loss carryforwards of $77.8 million have indefinite carryforward periods. Domestic net operating loss carryforwards of $34.1 million and tax credit carryforwards of $66.5 million will expire between December 31, 2024 and December 31, 2043, 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, 2014, 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, 2019.
A reconciliation of the beginning and ending amounts of unrecognized income tax benefits, excluding penalties and interest, for the years ended December 31, 2023, 2022 and 2021 is as follows:

Years Ended December 31,
202320222021
(in thousands)
Balance at the beginning of the year$31,315 $34,905 $39,408 
Additions related to acquisitions4,054 — 387 
Reductions for income tax positions of prior years(887)(8,301)(10,875)
Settlements with income tax authorities(988)(3,245)(2,137)
Additions for income tax positions of prior years1,809 911 2,289 
Additions based on income tax positions related to the current year7,926 7,045 5,833 
Balance at the end of the year$43,229 $31,315 $34,905 

As of December 31, 2023, the total amount of gross unrecognized income tax benefits that, if recognized, would affect the provision for income taxes is $40.9 million.