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Income Taxes | 12 Months Ended
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Dec. 31, 2022
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes Significant components of the Income tax (expense) benefit on earnings from continuing operations were as follows:
For the years ended December 31, | 2022 |  | 2021 |  | 2020
Current: |  |  |  |  |
United States | $ | (33,097) |  |  | $ | (48,523) |  |  | $ | 6,391 |
Foreign | (152,931) |  |  | (148,437) |  |  | (72,660) |
State | (273) |  |  | — |  |  | — |
Total current | (186,301) |  |  | (196,960) |  |  | (66,269) |
Deferred: |  |  |  |  |
United States | 4,663 |  |  | 87,310 |  |  | 124,718 |
Foreign | (3,794) |  |  | (10,347) |  |  | 25,612 |
State | 41 |  |  | (25,576) |  |  | 46,008 |
Total deferred | 910 |  |  | 51,387 |  |  | 196,338 |
Total income tax (expense) benefit | $ | (185,391) |  |  | $ | (145,573) |  |  | $ | 130,069 |
For the years ended December 31, 2022, 2021 and 2020, foreign income (loss) from continuing operations before income taxes was $319,515, $80,864, and $(250,910), respectively. For the years ended December 31, 2022, 2021 and 2020, domestic loss from continuing operations before income taxes was $(73,665), $(218,371), and $(199,928), respectively. Significant components of deferred tax assets and liabilities arising from continuing operations were as follows:
December 31, | 2022 |  | 2021
Deferred tax assets: |  |  |
Net operating loss and tax credits carryforwards | $ | 256,047 |  |  | $ | 246,405 |
Operating leases | 132,648 |  |  | 135,365 |
Depreciation | 50,444 |  |  | 45,702 |
Interest | 26,711 |  |  | 25,029 |
Deferred compensation | 13,767 |  |  | 23,219 |
Deferred revenue | 9,942 |  |  | 11,432 |
Nondeductible reserves | 7,342 |  |  | 9,470 |
Allowance for doubtful accounts | 6,781 |  |  | 8,437 |
Total deferred tax assets | 503,682 |  |  | 505,059 |
Deferred tax liabilities: |  |  |
Operating leases | 123,430 |  |  | 122,728 |
Investment in subsidiaries | 77,055 |  |  | 74,310 |
Amortization of intangible assets | 45,635 |  |  | 41,776 |
Deferred gain on Walden | 452 |  |  | 14,652 |
Unrealized gain | 3,212 |  |  | 2,559 |
Total deferred tax liabilities | 249,784 |  |  | 256,025 |
Net deferred tax assets | 253,898 |  |  | 249,034 |
Valuation allowance for deferred tax assets | (291,722) |  |  | (283,945) |
Net deferred tax liabilities | $ | (37,824) |  |  | $ | (34,911) |
Laureate does not provide deferred taxes on the portion of its unremitted earnings attributable to international companies that have been considered to be reinvested indefinitely. As of December 31, 2022, undistributed earnings from foreign subsidiaries totaled $595,486. If the Company were to remove its assertion and distribute the remaining unremitted earnings, we would record approximately $16,375 in additional deferred tax liabilities. The amount of additional deferred tax liabilities recognized could increase if our expectations change based on future developments. The Company has $69,700 of deferred tax asset for US state net operating loss carryforwards that expire from 2023 to 2042 and $2,900 of deferred tax asset for US state net operating loss carryforwards that do not expire. The Company has $162,800 of foreign net operating loss carryforwards that expire from 2023 to 2031. The Company has $166,000 of tax credit carryforwards that do not expire and $75,100 of interest carryforwards that do not expire. The Company assesses the realizability of deferred tax assets by examining all available evidence, both positive and negative. Accounting guidance restricts the amount of reliance the Company can place on projected taxable income to support the recovery of the deferred tax assets when a company is in a three-year cumulative loss position. A valuation allowance is recorded when the company is not able to identify a source of income to support realization of the deferred tax asset on a more-likely-than-not basis. The reconciliations of the beginning and ending balances of the valuation allowance on deferred tax assets were as follows:
For the years ended December 31, | 2022 |  | 2021 |  | 2020
Balance at beginning of period | $ | 283,945 |  |  | $ | 320,858 |  |  | $ | 324,119 |
Additions (deductions) from tax expense from continuing operations | 7,972 |  |  | 9,115 |  |  | (19,879) |
Charges to other accounts |  |  |  |  |
Additions | — |  |  | — |  |  | 16,618 |
Deductions | (195) |  |  | (46,028) |  |  | — |
Balance at end of period | $ | 291,722 |  |  | $ | 283,945 |  |  | $ | 320,858 |
The reconciliations of the reported Income tax (expense) benefit to the amount that would result by applying the United States federal statutory tax rate of 21% to income from continuing operations before income taxes were as follows:
For the years ended December 31, | 2022 |  | 2021 |  | 2020
Tax (expense) benefit at the United States statutory rate | $ | (51,628) |  |  | $ | 28,877 |  |  | $ | 94,676 |
Permanent differences | (38,228) |  |  | (8,217) |  |  | (24,184) |
Global intangible low taxed income | — |  |  | (30,616) |  |  | 70,965 |
Netherlands intellectual property restructuring | — |  |  | (53,643) |  |  | (32,425) |
State income tax benefit (expense), net of federal tax effect | 669 |  |  | (36,782) |  |  | 36,343 |
Tax effect of foreign income taxed at higher rate | (40,579) |  |  | (16,665) |  |  | (5,534) |
Change in valuation allowance | (11,241) |  |  | 17,642 |  |  | 3,241 |
Effect of tax contingencies | (37,151) |  |  | (12,573) |  |  | 2,706 |
Tax credits | 9,211 |  |  | 10,458 |  |  | (2,302) |
Withholding taxes | (16,275) |  |  | (43,578) |  |  | (13,254) |
Other | (169) |  |  | (476) |  |  | (163) |
Total income tax (expense) benefit | $ | (185,391) |  |  | $ | (145,573) |  |  | $ | 130,069 |
Included within permanent differences in the 2022 rate reconciliation was approximately $7,700 of tax expense from stock option shortfalls, $13,700 of non-deductible scholarship expenses, and $4,200 of taxable income related to intercompany dividends, as well as $11,200 of expense for a change in estimate related to unrealized foreign currency exchange that is fully offset by a corresponding increase in the valuation allowance. The reconciliations of the beginning and ending amount of unrecognized tax benefits were as follows:
For the years ended December 31, | 2022 |  | 2021 |  | 2020
Beginning of the period | $ | 257,587 |  |  | $ | 385,283 |  |  | $ | 56,395 |
Additions for tax positions related to prior years | 38,029 |  |  | 80,885 |  |  | 3,582 |
Decreases for tax positions related to prior years | (8,856) |  |  | (227,051) |  |  | — |
Additions for tax positions related to current year | 498 |  |  | 21,993 |  |  | 327,142 |
Decreases for unrecognized tax benefits as a result of a lapse in the statute of limitations | (2,329) |  |  | (3,523) |  |  | (1,836) |
End of the period | $ | 284,929 |  |  | $ | 257,587 |  |  | $ | 385,283 |
Laureate records interest and penalties related to uncertain tax positions as a component of Income tax expense. During the years ended December 31, 2022, 2021 and 2020, Laureate recognized net interest and penalties related to income taxes of $6,828, $(6,479), and $(3,056), respectively. L aureate had $21,355 and $14,527 of accrued interest and penalties at December 31, 2022 and 2021, respectively. During the year ended December 31, 2022, the Company recognized approximately $32,500 of income tax reserves related to the application of the high-tax exception to global intangible low-taxed income. Approximately $143,665 of unrecognized tax benefits, if recognized, will affect the effective income tax rate. It is reasonably possible that Laureate’s unrecognized tax benefits may decrease within the next 12 months by up to approximately $4,448 as a result of the lapse of statutes of limitations and as a result of the final settlement and resolution of outstanding tax matters in various jurisdictions. Laureate and various subsidiaries file income tax returns in the United States federal jurisdiction, and in various states and foreign jurisdictions. With few exceptions, Laureate is no longer subject to United States federal, state and local, or foreign income tax examinations by tax authorities for years before 2010. United States federal and state statutes are generally open back to 2018; however, the Internal Revenue Service (the IRS) has the ability to challenge 2005 through 2017 net operating loss carryforwards. Statutes of other major jurisdictions are open back to 2011 for Mexico, 2009 for Peru and 2016 for the Netherlands.. Other Matters Inflation Reduction Act of 2022 On August 16, 2022, the U.S. enacted the Inflation Reduction Act of 2022, which implemented a 15% minimum tax on book income of certain large corporations, a 1% excise tax on stock repurchases and tax incentives to promote clean energy, among other provisions. The Company does not believe that this legislation will have a material impact on the financial statements and will continue to monitor regulatory developments to assess potential impacts to the Company. OECD Proposals The Organization for Economic Co-operation and Development (OECD) has proposed changes to numerous long-standing tax principles. These proposals, if finalized and adopted by the associated countries, will likely increase tax uncertainty, and may adversely affect our provision for income taxes. The Company will continue to monitor regulatory developments to assess potential impacts to the Company.

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