XML 52 R28.htm IDEA: XBRL DOCUMENT v3.24.0.1
Income Taxes
 12 Months Ended
Dec. 31, 2023
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The Company's United States and Irish based subsidiaries file income tax returns in the United States and Ireland respectively. Other foreign subsidiaries are taxed separately under the laws of their respective countries.

The components of income before income tax expense are as follows:
 Year ended
December 31, 2023December 31, 2022December 31, 2021
 (in thousands)
Ireland$624,642 $432,963 $231,893 
United States(352,532)(270,440)(278,413)
Other352,357 405,328 243,200 
Income before income tax expense$624,467 $567,851 $196,680 

The components of income tax expense are as follows:
 Year ended
December 31, 2023December 31, 2022December 31, 2021
 (in thousands)
Income tax expense:   
Current tax (benefit)/expense:   
Ireland$80,427 $53,248 $18,469 
United States(42,428)60,753 35,478 
Other59,153 70,395 48,003 
 
Total current tax expense
97,152 184,396 101,950 
Deferred tax (benefit)/expense:   
Ireland45,253 (6,166)553 
United States(143,323)(118,475)(52,717)
Other12,667 (344)(8,452)
 
Total deferred tax benefit		(85,403)(124,985)(60,616)
Income tax expense allocated to continuing operations11,749 59,411 41,334 
Income tax expense was allocated to the following components of other comprehensive income:   
Currency impact on long term funding(3,903)7,211 1,776 
Cash flow hedge301— — 
Total$8,147 $66,622 $43,110 
Ireland's statutory trading income tax rate, the rate of our country of domicile, is 12.5%. The Company's consolidated reported income tax expense differed from the amount that would result from applying the Irish statutory rate as set forth below:

 Year ended
December 31, 2023December 31, 2022December 31, 2021
 (in thousands)
Taxes at Irish statutory rate of 12.5% (2022:12.5%; 2021:12.5%)$78,058 $70,980 $24,586 
Rate differential from amortization of intangible assets(71,223)(59,330)(31,228)
Foreign and other income taxed at higher rates35,778 52,464 51,273 
Research & development tax incentives(3,868)(2,608)(3,120)
Movement in valuation allowance(1,068)(777)3,101 
Effects of change in tax rates3,154 (300)(128)
(Decrease)/ increase in unrecognized tax benefits(54,347)8,392 5,246 
Investor tax expense on foreign subsidiary earnings39,165 — — 
Impact of stock compensation(11,487)(8,756)(9,083)
Other(2,413)(654)687 
Income tax expense$11,749 $59,411 $41,334 

    The tax effects of temporary differences and carryforwards that give rise to significant portions of deferred tax assets and deferred tax liabilities are presented below:
December 31, 2023December 31, 2022
 (in thousands)
Deferred tax liabilities:  
Property, plant and equipment$7,547 $10,927 
Operating right-of-use-assets16,108 23,260 
Goodwill39,014 37,150 
Intangible assets950,055 1,078,302 
Investments in foreign subsidiaries 52,408 1,587 
Other7,982 7,467 
Total deferred tax liabilities recognized1,073,114 1,158,693 
Deferred tax assets:  
Operating loss and tax credits carryforwards124,150 88,697 
Property, plant and equipment9,082 6,010 
Operating lease liabilities20,190 27,593 
Intangible assets2,166 3,602 
Stock compensation17,605 21,862 
Other liabilities 84,928 66,933 
Unearned revenue23,748 66,565 
Other8,774 9,155 
Total deferred tax assets290,643 290,417 
Valuation allowance for deferred tax assets(42,967)(43,379)
Deferred tax assets recognized247,676 247,038 
Overall net deferred tax liability$(825,438)$(911,655)
At December 31, 2023 Ireland subsidiaries had tax credit carryforwards for income tax purposes that may be carried forward indefinitely, available for offset against future tax liabilities, if any, of $16.9 million.

At December 31, 2023 U.S. subsidiaries had U.S. federal and state net operating loss ("NOL") carryforwards of approximately $1.7 million and $331.4 million, respectively. These NOLs are available for offset against future taxable income and the expiry dates are shown in the table below. Of the $1.7 million U.S. federal NOLs, approximately $1.2 million is currently available for offset against future U.S. federal taxable income. The subsidiaries' ability to use the remaining U.S. federal and state NOL carryforwards is limited on an annual basis due to change of ownership in 2014, 2017, and 2019, as defined by Section 382 of the Internal Revenue Code of 1986, as amended. All $1.7 million of the U.S. federal NOLs are limited by Section 382 and expire between 2024 - 2037. As of December 31, 2023, U.S subsidiaries also had disallowed interest carryforwards of $204 million that can be carried forward indefinitely. These carryforwards are available for offset against future taxable income in the event that the U.S subsidiaries have excess capacity for interest deductions in future years.

    The expected expiry dates of the US NOLs are as follows: 
Federal
NOL's		State
NOL's
 
(in thousands)   
2024-2037$1,744 $271,434 
2038-2042— 50,685 
Indefinite— 9,251 
 $1,744 $331,370 
    
In addition, we also have general business tax credit carryforwards of approximately $0.8 million that are available to reduce future U.S. federal and state income taxes. The general business tax credits are non-refundable and are due to expire between the years 2026-2038.

At December 31, 2023 other than those in the U.S. and Ireland, we had operating loss carryforwards for income tax purposes that may be carried forward indefinitely, available to offset against future taxable income, if any, of approximately $42.9 million. At December 31, 2023 those subsidiaries also had additional operating loss carryforwards of $12.9 million which are due to expire between 2024 and 2030. In addition, at December 31, 2023 those subsidiaries had tax credit carryforwards for income tax purposes that may be carried forward indefinitely, available to offset against future tax liabilities, if any, of $4.3 million.

The valuation allowance at December 31, 2023 was approximately $43.0 million. The valuation allowance for deferred tax assets as of December 31, 2022 and December 31, 2021 was $43.4 million and $45.5 million respectively. The net change in the total valuation allowance was a decrease of $0.4 million during 2023 and a decrease of $2.1 million during 2022. Of the total decrease of $0.4 million in 2023, $1.1 million was recognized within income tax expense and a increase of $0.7 million was recognized in Other Comprehensive Income. Of the total decrease of $2.1 million in 2022, $0.8 million was recognized within income tax expenses and $1.3 million was recognized in Other Comprehensive Income.

The valuation allowances at December 31, 2023 and December 31, 2022 were primarily related to operating losses and tax credits carried forward that, in the judgment of management, are not more likely than not to be realized. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, loss utilization, projected future taxable income and tax planning strategies in making this assessment. In respect of deferred tax assets not subject to a valuation allowance, management considers that it is more likely than not that these deferred tax assets will be realized on the basis that there will be sufficient reversals of deferred tax liabilities and taxable income in future periods.

The Company has recognized a deferred tax liability of $52.4 million (2022: $1.6 million) for investments in foreign subsidiaries where the Company does not consider the earnings to be indefinitely reinvested. Given changes in various tax laws during 2023, the group has taken the decision to repatriate certain excess earnings which will not be permanently reinvested and consequently have provided for the relevant tax in the current year. For the deferred tax liability not recognized in respect of temporary differences related to investments in foreign subsidiaries which are considered to be indefinitely reinvested, it is not practicable to calculate the exact unrecognized deferred tax liability, however it is not expected to be material as Ireland allows a tax credit in respect of distributions from foreign subsidiaries at the statutory tax rate in the jurisdiction of the subsidiary so that no material tax liability would be expected to arise in Ireland in the event these earnings were ever remitted. In addition, withholding taxes applicable to remittances from foreign subsidiaries would not be expected to be material given Ireland’s tax treaty network and the EU parent subsidiary directive.
A reconciliation of the beginning and ending amount of total unrecognized tax benefits is as follows:
December 31, 2023December 31, 2022December 31, 2021
 (in thousands)
Unrecognized tax benefits at start of year$217,584 $202,065 $19,078 
Increase related to acquired tax positions— — 170,047 
Increase related to prior year tax positions1,161 16,098 204 
Decrease related to prior year tax positions(918)(5,442)(1,695)
Increase related to current year tax positions4,552 5,701 18,613 
Settlements— — (844)
Lapse of statute of limitations(62,363)(838)(3,338)
Unrecognized tax benefits at end of year$160,016 $217,584 $202,065 

The relevant statute of limitations for unrecognized tax benefits totaling $65.0 million could potentially expire during 2024.

Included in the balance of total unrecognized tax benefits at December 31, 2023 were potential benefits of $160.0 million, which if recognized, would affect the effective rate on income from continuing operations. The balance of total unrecognized tax benefits at December 31, 2022 and December 31, 2021 included potential benefits which, if recognized, would affect the effective rate of income tax from continuing operations of $217.6 million and $202.1 million respectively.

Interest and penalties recognized during the year ended December 31, 2023 amounted to a net charge of $4.2 million (2022: $7.1 million, 2021: $1.9 million) and are included within the income tax expense. Total accrued interest and penalties as of December 31, 2023 and December 31, 2022 were $27.1 million and $22.6 million respectively and are included in closing income taxes payable at those dates.

Our major tax jurisdictions are Ireland and the United States. We may potentially be subjected to tax audits in both our major jurisdictions. In Ireland, tax periods open to audit include the years ended December 31, 2019, December 31, 2020, December 31, 2021, December 31, 2022 and December 31, 2023. In the United States, tax periods open to audit include the years ended December 31, 2019, December 31, 2020, December 31, 2021, December 31, 2022 and December 31, 2023. During such audits, local tax authorities may challenge the positions taken by us in our tax returns.