XML 41 R20.htm IDEA: XBRL DOCUMENT
v3.22.4

Income Taxes Level 1 (Notes) | 12 Months Ended
--- | ---
Dec. 31, 2022
Income Tax Disclosure [Abstract] |
Income Tax Disclosure [Text Block] | Income Taxes The provision or benefit for income taxes includes U.S. federal income taxes (determined on a consolidated return basis), foreign income taxes, and state income taxes. On August 16, 2022, the Inflation Reduction Act was enacted into U.S. law. We do not currently expect that the Inflation Reduction Act will have a material impact on our income taxes. Income before income taxes was composed of the following components:
| Years Ended December 31,
| 2022 |  | 2021 |  | 2020
| (In thousands)
United States | $ | 703,131 |  |  | $ | 994,632 |  |  | $ | 633,608 |
Foreign | $ | 52,497 |  |  | 50,868 |  |  | 28,452 |
Total income before income taxes | $ | 755,628 |  |  | $ | 1,045,500 |  |  | $ | 662,060 |
Income tax provision consisted of the following:
| Years Ended December 31,
| 2022 |  | 2021 |  | 2020
| (In thousands)
Current: |  |  |  |  |
United States | $ | 139,132 |  |  | $ | 194,545 |  |  | $ | 106,632 |
Foreign | 14,486 |  |  | 14,088 |  |  | 7,968 |
State | 32,505 |  |  | 39,452 |  |  | 23,439 |
Total current income taxes | 186,123 |  |  | 248,085 |  |  | 138,039 |
Deferred: |  |  |  |  |
United States | $ | (59) |  |  | $ | (3,543) |  |  | $ | 6,339 |
Foreign | 780 |  |  | (5,492) |  |  | (64) |
State | 2,750 |  |  | 3,198 |  |  | 1,609 |
Total deferred income taxes | 3,471 |  |  | (5,837) |  |  | 7,884 |
Total income taxes | $ | 189,594 |  |  | $ | 242,248 |  |  | $ | 145,923 |
We made income tax payments of $183.7 million, $270.2 million, and $138.0 million in 2022, 2021, and 2020, respectively, and received refunds of $4.2 million, $4.7 million, and $5.2 million, respectively. The differences between the U.S. federal statutory income tax rate and our effective tax rate were as follows:
| Years Ended December 31, |  |
| 2022 |  | 2021 |  | 2020 |  |
| (In thousands) |  |
Computed tax provision at the applicable federal statutory income tax rate | $ | 158,682 |  |  | $ | 219,555 |  |  | $ | 139,031 |  |  |
State and local taxes, net of federal income tax benefits | 28,817 |  |  | 35,045 |  |  | 20,711 |  |  |
Foreign jurisdiction differences | 3,976 |  |  | 3,041 |  |  | 2,496 |  |  |
Permanent differences associated with divestitures | 200 |  |  | 400 |  |  | 73 |  |  |
Changes in uncertain tax positions and audit settlements | 53 |  |  | 51 |  |  | 100 |  |  |
Foreign valuation allowance, net of federal income tax benefits | — |  |  | (4,155) |  |  | (566) |  |  |
Excess tax benefit from share-based compensation | (8,918) |  |  | (12,476) |  |  | (9,093) |  |  |
Other | 6,784 |  |  | 787 |  |  | (6,829) |  |  |
Provision for income taxes | $ | 189,594 |  |  | $ | 242,248 |  |  | $ | 145,923 |  |  |
Total consolidated effective tax rate | 25.1 | % |  | 23.2 | % |  | 22.0 | % |  |
The 2022 consolidated effective tax rate was 25.1%, compared to 23.2% in 2021. The lower effective tax rate in 2021 was primarily due to non-taxable gains on the cash surrender value of certain life insurance policies and the release of a Puerto Rican valuation allowance. Deferred taxes are determined based on differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates. The tax effects of temporary differences and carryforwards that give rise to significant portions of deferred tax assets and liabilities consisted of the following:
| Years Ended December 31,
| 2022 |  | 2021
| (In thousands)
Inventories and cemetery property | $ | (201,795) |  |  | $ | (205,660) |
Deferred incremental direct selling costs | (99,377) |  |  | (90,691) |
Property and equipment | (181,029) |  |  | (170,198) |
Intangibles | (204,010) |  |  | (203,229) |
Other | (5,313) |  |  | (3,728) |
Deferred tax liabilities | (691,524) |  |  | (673,506) |
Loss and tax credit carryforwards | 137,785 |  |  | 148,069 |
Deferred revenue on preneed funeral and cemetery contracts | 153,479 |  |  | 135,112 |
Accrued liabilities | 80,069 |  |  | 79,333 |
Deferred tax assets | 371,333 |  |  | 362,514 |
Less: valuation allowance | (118,939) |  |  | (120,739) |
Net deferred income tax liability | $ | (439,130) |  |  | $ | (431,731) |
Deferred tax assets and deferred income tax liabilities are recognized in our Consolidated Balance Sheet as follows:
| Years Ended December 31,
| 2022 |  | 2021
| (In thousands)
Non-current deferred tax assets - included in Deferred charges and other assets, net | $ | 5,910 |  |  | $ | 6,171 |
Non-current deferred tax liabilities - included in Deferred tax liability | (445,040) |  |  | (437,902) |
Net deferred income tax liability | $ | (439,130) |  |  | $ | (431,731) |
As of December 31, 2022, foreign withholding taxes have not been provided on the estimated $212.6 million of undistributed earnings and profits (E&P) of our foreign subsidiaries as we intend to permanently reinvest these foreign E&P in those businesses outside the U.S. However, if we were to repatriate such foreign E&P, the foreign withholding tax liability is estimated to be $11.0 million. Additionally, if we were to repatriate E&P in excess of our previously taxed income under the Tax Cuts and Jobs Act of 2017, such excess repatriation may cause us to incur an additional U.S. federal income tax of approximately $7.7 million related to the Company’s hybrid debt accounting between Canada and the United States. The following table summarizes the activity related to our gross unrecognized tax benefits from January 1, 2020 to December 31, 2022 (in thousands):
| Federal, State, and Foreign Tax
| (In thousands)
Balance at December 31, 2019 | $ | 1,348 |
Reduction to tax positions related to prior years | — |
Balance at December 31, 2020 | $ | 1,348 |
Reductions to tax positions related to prior years | — |
Balance at December 31, 2021 | $ | 1,348 |
Reductions to tax positions related to prior years | — |
Balance at December 31, 2022 | $ | 1,348 |
Our total unrecognized tax benefits that, if recognized, would affect our effective tax rates were $1.3 million as of December 31, 2022, 2021 and 2020. We include potential accrued interest and penalties related to unrecognized tax benefits within our income tax provision account. We have accrued $0.9 million, $0.8 million, and $0.7 million for the payment of interest, net of tax benefits, and penalties as of December 31, 2022, 2021 and 2020, respectively. We recorded an increase of interest and penalties of $0.1 million for each of the years ended December 31, 2022, 2021 and 2020, respectively. To the extent interest and penalties are not assessed with respect to uncertain tax positions or the uncertainty of deductions in the future, amounts accrued will be reduced and reflected as a reduction of the overall income tax provision. We file income tax returns, including tax returns for our subsidiaries, with federal, state, local, and foreign jurisdictions. We consider the United States to be our most significant jurisdiction; however, all tax returns are subject to routine compliance review by the taxing authorities in the jurisdictions in which we file tax returns in the ordinary course of business. The federal statutes of limitations have expired for all tax years prior to 2019, and we are not currently under audit by the IRS. However, pursuant to the 2017 Tax Cuts and Jobs Act, the statute of limitations on the transition tax for the 2017 tax year does not expire until 2024. Various state jurisdictions are auditing years 2013 through 2020. There are currently no federal or provincial audits in Canada; however, years subsequent to 2016 remain open and could be subject to examination. We believe that it is reasonably possible that the recorded amount of gross unrecognized tax benefits may decrease by $1.3 million within the next twelve months as a result of concluding various state tax matters. Various subsidiaries have federal, state, and foreign loss carryforwards in the aggregate of $2.6 billion with expiration dates through 2040. Such loss carryforwards will expire as follows:
| Federal |  | State |  | Foreign |  | Total
| (In thousands)
2023 | $ | — |  |  | $ | 218,295 |  |  | $ | — |  |  | $ | 218,295 |
2024 | — |  |  | 160,423 |  |  | 346 |  |  | 160,769 |
2025 | — |  |  | 330,389 |  |  | 1,434 |  |  | 331,823 |
2026 | — |  |  | 368,207 |  |  | 957 |  |  | 369,164 |
Thereafter | — |  |  | 1,495,467 |  |  | 6,598 |  |  | 1,502,065 |
Total loss carryforwards | $ | — |  |  | $ | 2,572,781 |  |  | $ | 9,335 |  |  | $ | 2,582,116 |
I n addition to the above loss carryforwards, we have $2.5 million of foreign alternative minimum tax credits that can be carried forward indefinitely. In assessing the usefulness of deferred tax assets, we consider whether it is more likely than not that some portion or all of the net deferred tax assets will not be realized. The future realization of net deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. During 2022, we recorded a net $1.8 million decrease in our valuation allowance primarily due to state legislative changes. The valuation allowances can be affected in future periods by changes to tax laws, changes to statutory tax rates, and changes in estimates of future taxable income. At December 31, 2022, our loss and tax credit carryforward deferred tax assets and related valuation allowances by jurisdiction are as follows (presented net of federal benefit).
| Federal |  | State |  | Foreign |  | Total
|  |  | (In thousands) |  |
Loss and tax credit carryforwards | $ | — |  |  | $ | 131,805 |  |  | $ | 5,980 |  |  | $ | 137,785 |
Valuation allowance | $ | — |  |  | $ | 104,019 |  |  | $ | 14,920 |  |  | $ | 118,939 |

X
- References No definition available. + Details
Name: | us-gaap_IncomeTaxDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- 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
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration