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INCOME TAXES | 12 Months Ended
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Dec. 31, 2023
Income Tax Disclosure [Abstract] |
INCOME TAXES | 20. INCOME TAXES Holdings The provision for federal and foreign income tax expense for continuing operations of Holdings consisted of the following:
|  | Year Ended December 31, |
|  | 2021 |  |  | 2022 |  |  | 2023 |
(Loss) income before income taxes: |  |  |  |  |  |  |  |  |
U.S. |  | $ | (389.2 | ) |  | $ | (286.9 | ) |  | $ | 151.4 |
Foreign |  |  | (49.8 | ) |  |  | 21.9 |  |  |  | 70.0 |
Total |  | $ | (439.0 | ) |  | $ | (265.0 | ) |  | $ | 221.4 |
Current and deferred income taxes for Holdings were as follows:
|  | Year Ended December 31, |
|  | 2021 |  |  | 2022 |  |  | 2023 |
Current: |  |  |  |  |  |  |  |  |
Federal |  | $ | 4.0 |  |  | $ | 1.9 |  |  | $ | 2.2 |
Foreign |  |  | 0.8 |  |  |  | 9.2 |  |  |  | 14.2 |
State |  |  | 1.0 |  |  |  | 1.2 |  |  |  | 2.9 |
Total current expense |  |  | 5.8 |  |  |  | 12.3 |  |  |  | 19.3 |
Deferred: |  |  |  |  |  |  |  |  |
Federal |  | $ | (20.2 | ) |  | $ | (2.7 | ) |  | $ | 15.8 |
Foreign |  |  | 0.4 |  |  |  | (2.4 | ) |  |  | (5.7 | )
State |  |  | (2.8 | ) |  |  | (4.2 | ) |  |  | 0.5 |
Total deferred taxes |  |  | (22.6 | ) |  |  | (9.3 | ) |  |  | 10.6 |
Income taxes |  | $ | (16.8 | ) |  | $ | 3.0 |  |  | $ | 29.9 |
A reconciliation between Holdings’ income tax expense and taxes computed by applying the applicable statutory federal income tax rate to income before income taxes is as follows:
|  | Year Ended December 31, |
|  | 2021 |  |  | 2022 |  |  | 2023 |
Computed statutory tax expense |  | $ | (92.2 | ) |  | $ | (55.7 | ) |  | $ | 46.5 |
State and local income taxes, net of federal income tax impact |  |  | (1.4 | ) |  |  | (2.2 | ) |  |  | 5.4 |
Changes in valuation allowance |  |  | 76.3 |  |  |  | 60.6 |  |  |  | (63.9 | )
Foreign tax rate differential |  |  | (4.5 | ) |  |  | 1.3 |  |  |  | 1.4 |
Foreign tax credits |  |  | — |  |  |  | (4.0 | ) |  |  | (13.0 | )
Changes in uncertain tax positions |  |  | 7.5 |  |  |  | 1.6 |  |  |  | (0.9 | )
U.S. tax impact of foreign operations |  |  | 0.8 |  |  |  | (1.6 | ) |  |  | 10.3 |
Return to provision |  |  | (5.1 | ) |  |  | 1.4 |  |  |  | (3.3 | )
Expiration of attribute carryforwards |  |  | 0.6 |  |  |  | — |  |  |  | 37.1 |
Permanent differences |  |  | 5.4 |  |  |  | 4.6 |  |  |  | 8.6 |
Other, net |  |  | (4.2 | ) |  |  | (3.0 | ) |  |  | 1.7 |
Income taxes |  | $ | (16.8 | ) |  | $ | 3.0 |  |  | $ | 29.9 |
CUSA The provision for federal and foreign income tax expense for continuing operations of CUSA consisted of the following:
|  | Year Ended December 31, |
|  | 2021 |  |  | 2022 |  |  | 2023 |
(Loss) income before income taxes: |  |  |  |  |  |  |  |  |
U.S. |  | $ | (362.6 | ) |  | $ | (263.7 | ) |  | $ | 167.0 |
Foreign |  |  | (49.8 | ) |  |  | 21.9 |  |  |  | 70.0 |
Total |  | $ | (412.4 | ) |  | $ | (241.8 | ) |  | $ | 237.0 |
Current and deferred income taxes for CUSA were as follows:
|  | Year Ended December 31, |
|  | 2021 |  |  | 2022 |  |  | 2023 |
Current: |  |  |  |  |  |  |  |  |
Federal |  | $ | 4.0 |  |  | $ | 1.9 |  |  | $ | 2.8 |
Foreign |  |  | 0.8 |  |  |  | 9.2 |  |  |  | 14.2 |
State |  |  | 1.0 |  |  |  | 1.2 |  |  |  | 2.9 |
Total current expense |  |  | 5.8 |  |  |  | 12.3 |  |  |  | 19.9 |
Deferred: |  |  |  |  |  |  |  |  |
Federal |  | $ | (36.7 | ) |  | $ | (16.2 | ) |  | $ | 13.8 |
Foreign |  |  | 0.4 |  |  |  | (2.4 | ) |  |  | (5.7 | )
State |  |  | (1.8 | ) |  |  | (6.8 | ) |  |  | 0.4 |
Total deferred taxes |  |  | (38.1 | ) |  |  | (25.4 | ) |  |  | 8.5 |
Income taxes |  | $ | (32.3 | ) |  | $ | (13.1 | ) |  | $ | 28.4 |
A reconciliation between CUSA’s income tax expense and taxes computed by applying the applicable statutory federal income tax rate to income before income taxes is as follows:
|  | Year Ended December 31, |
|  | 2021 |  |  | 2022 |  |  | 2023 |
Computed statutory tax expense |  | $ | (86.6 | ) |  | $ | (50.8 | ) |  | $ | 49.8 |
State and local income taxes, net of federal income tax impact |  |  | (0.7 | ) |  |  | (4.2 | ) |  |  | 5.9 |
Changes in valuation allowance |  |  | 54.3 |  |  |  | 41.8 |  |  |  | (68.6 | )
Foreign tax rate differential |  |  | (4.5 | ) |  |  | 1.3 |  |  |  | 1.4 |
Foreign tax credits |  |  | — |  |  |  | (4.0 | ) |  |  | (12.9 | )
Changes in uncertain tax positions |  |  | 5.7 |  |  |  | 1.6 |  |  |  | (0.9 | )
U.S. tax impact of foreign operations |  |  | 0.8 |  |  |  | (1.6 | ) |  |  | 10.4 |
Return to provision |  |  | (3.2 | ) |  |  | 1.2 |  |  |  | (3.3 | )
Expiration of attribute carryforwards |  |  | 0.6 |  |  |  | — |  |  |  | 36.4 |
Permanent differences |  |  | 5.5 |  |  |  | 4.5 |  |  |  | 8.6 |
Other, net |  |  | (4.2 | ) |  |  | (2.9 | ) |  |  | 1.6 |
Income taxes |  | $ | (32.3 | ) |  | $ | (13.1 | ) |  | $ | 28.4 |
. As of December 31, 2023, the Company will not indefinitely reinvest $2.0 of accumulated undistributed losses of its Curacao subsidiary. As of December 31, 2023, the Company had approximately $157.6 of accumulated undistributed earnings and profits which it considers to be indefinitely reinvested. Of this indefinitely reinvested amount, approximately $159.3 was subject to the one-time transition tax pursuant to the 2017 Tax Cuts and Jobs Act. Additional tax due on the repatriation of these previously-taxed earnings would generally be foreign withholding and U.S. state income taxes. The Company does not intend to repatriate these offshore earnings and profits, and therefore has not recorded any deferred taxes on such earnings. The Company considers any excess of the amount for financial reporting over the tax basis of its investment in these foreign subsidiaries to be indefinitely reinvested. At this time, the determination of deferred tax liabilities on this amount is not practicable. Deferred Income Taxes Holdings The tax effects of significant temporary differences and tax loss and tax credit carryforwards comprising the net long-term deferred income tax liabilities for Holdings as of the periods presented consisted of the following:
|  | December 31, |
|  | 2022 |  |  | 2023 |
Deferred liabilities: |  |  |  |  |  |
Theatre properties and equipment |  | $ | 76.9 |  |  | $ | 68.4 |
Finance lease assets |  |  | 16.0 |  |  |  | 13.3 |
Operating lease right-of-use assets |  |  | 274.3 |  |  |  | 248.8 |
Intangible asset – other |  |  | 49.6 |  |  |  | 55.8 |
Intangible asset – tradenames |  |  | 68.9 |  |  |  | 69.5 |
Total deferred liabilities |  |  | 485.7 |  |  |  | 455.8 |
Deferred assets: |  |  |  |  |  |
Deferred revenue – NCM and Other |  |  | 82.6 |  |  |  | 82.2 |
Prepaid rent |  |  | 4.1 |  |  |  | 2.7 |
Gift cards |  |  | 8.8 |  |  |  | 9.7 |
Investment in partnerships |  |  | 5.2 |  |  |  | 1.4 |
Operating lease obligations |  |  | 296.1 |  |  |  | 269.0 |
Finance lease obligations |  |  | 21.6 |  |  |  | 18.6 |
Tax impact of items in accumulated other comprehensive income and additional paid-in-capital |  |  | 16.4 |  |  |  | 13.4 |
Restricted stock |  |  | 5.1 |  |  |  | 4.5 |
Accrued expenses |  |  | 3.7 |  |  |  | 2.9 |
Other tax loss carryforwards |  |  | 126.1 |  |  |  | 82.7 |
Other tax credit and attribute carryforwards |  |  | 193.5 |  |  |  | 179.3 |
Other expenses, not currently deductible for tax purposes |  |  | 14.9 |  |  |  | 11.7 |
Total deferred assets |  |  | 778.1 |  |  |  | 678.1 |
Net deferred income tax (asset) liability before valuation allowance |  |  | (292.4 | ) |  |  | (222.3 | )
Valuation allowance against deferred assets – non-current |  |  | 326.1 |  |  |  | 266.3 |
Net deferred income tax liability |  | $ | 33.7 |  |  | $ | 44.0 |
Net deferred tax (asset) liability – Foreign |  | $ | 4.7 |  |  | $ | (0.1 | )
Net deferred tax liability – U.S. |  |  | 29.0 |  |  |  | 44.1 |
Total |  | $ | 33.7 |  |  | $ | 44.0 |
CUSA The tax effects of significant temporary differences and tax loss and tax credit carryforwards comprising the net long-term deferred income tax liabilities for CUSA as of the periods presented consisted of the following:
|  | December 31, |
|  | 2022 |  |  | 2023 |
Deferred liabilities: |  |  |  |  |  |
Theatre properties and equipment |  | $ | 76.7 |  |  | $ | 68.2 |
Finance lease assets |  |  | 15.9 |  |  |  | 13.2 |
Operating lease right-of-use assets |  |  | 273.9 |  |  |  | 248.1 |
Intangible asset – other |  |  | 49.5 |  |  |  | 55.7 |
Intangible asset – tradenames |  |  | 68.8 |  |  |  | 69.3 |
Tax impact of items in accumulated other comprehensive income and additional paid-in-capital |  |  | 5.3 |  |  |  | 1.4 |
Total deferred liabilities |  |  | 490.1 |  |  |  | 455.9 |
Deferred assets: |  |  |  |  |  |
Deferred revenue – NCM and Other |  |  | 82.4 |  |  |  | 82.0 |
Prepaid rent |  |  | 4.1 |  |  |  | 2.7 |
Gift Cards |  |  | 8.8 |  |  |  | 9.7 |
Investment in partnerships |  |  | 5.2 |  |  |  | 1.4 |
Operating lease obligations |  |  | 295.6 |  |  |  | 268.3 |
Finance lease obligations |  |  | 21.6 |  |  |  | 18.6 |
Restricted stock |  |  | 4.9 |  |  |  | 4.3 |
Accrued expenses |  |  | 3.7 |  |  |  | 2.9 |
Other tax loss carryforwards |  |  | 122.0 |  |  |  | 80.0 |
Other tax credit and attribute carryforwards |  |  | 174.1 |  |  |  | 149.0 |
Other expenses, not currently deductible for tax purposes |  |  | 14.8 |  |  |  | 11.5 |
Total deferred assets |  |  | 737.2 |  |  |  | 630.4 |
Net deferred income tax (asset) liability before valuation allowance |  |  | (247.1 | ) |  |  | (174.5 | )
Valuation allowance against deferred assets – non-current |  |  | 283.2 |  |  |  | 218.5 |
Net deferred income tax liability |  | $ | 36.1 |  |  | $ | 44.0 |
Net deferred tax (asset) liability – Foreign |  | $ | 4.7 |  |  | $ | (0.1 | )
Net deferred tax liability – U.S. |  |  | 31.4 |  |  |  | 44.1 |
Total |  | $ | 36.1 |  |  | $ | 44.0 |
Federal net operating losses and interest expense limitation carryforwards have an indefinite carryforward period. Foreign net operating losses have varying carryforward periods with some being indefinite. Similarly, state net operating losses have varying carryforward periods with some being indefinite. Foreign tax credits have a 10 year carryforward period. A majority of the Company’s foreign tax credit carryforwards expire in 2026 and 2027, with the remainder expiring in future periods. The Company assesses the likelihood that it will be able to recover its deferred tax assets against future sources of taxable income and reduces the carrying amounts of deferred tax assets by recording a valuation allowance, if, based on all available evidence, the Company believes it is more likely than not that all or a portion of such assets will not be realized. As of the year ended December 31, 2023, the Company remained in a three-year cumulative pre-tax loss domestically and in certain foreign jurisdictions. This is heavily weighted as objectively verifiable negative evidence and, as a result, the Company is unable to include future projected earnings in assessing the recoverability of its deferred tax assets in these jurisdictions. The Company has established a valuation allowance against certain deferred tax assets for which the ultimate realization of future benefits is uncertain. Expiring carryforwards and the required valuation allowances are adjusted annually. After application of the valuation allowances described above, the Company anticipates that no limitations will apply with respect to utilization of any of the other deferred tax assets described above. The Company’s valuation allowance changed from $326.1 as of December 31, 2022 to $266.3 as of December 31, 2023. CUSA’s valuation allowance changed from $283.2 as of December 31, 2022 to $218.5 as of December 31, 2023. The decrease primarily relates to a release of valuation allowances previously recorded against certain expiring foreign tax credits and foreign loss carryforwards, as well as net deferred tax assets in certain foreign jurisdictions. The remaining valuation allowance associated with these deferred tax assets is primarily a result of not having sufficient income from deferred tax liability reversals in future periods to support the realization of the deferred tax assets. When the Company begins to generate taxable income at a normal level, the Company expects to reverse the valuation allowances with an offsetting increase to reported earnings. There is a possibility that within the next 12 months, sufficient positive evidence may become available to reach a conclusion that a portion of the valuation allowance in certain foreign jurisdictions will no longer be required. Holdings’ valuation allowance for deferred tax assets, which includes CUSA’s valuation allowance for deferred tax assets, and CUSA’s valuation for deferred tax assets, for the periods presented were as follows:
|  | Valuation Allowance for Deferred Taxes |
|  | Holdings |  | CUSA |
Balance at January 1, 2021 |  | $ | 203.6 |  | $ | 203.6 |
Additions |  |  | 69.1 |  |  | 52.5 |
Deductions |  |  | (4.3 | ) |  | (10.9 | )
Currency translation |  |  | (4.3 | ) |  | (4.3 | )
Balance at December 31, 2021 |  | $ | 264.1 |  | $ | 240.9 |
Additions |  |  | 67.0 |  |  | 47.0 |
Deductions |  |  | (5.3 | ) |  | (4.9 | )
Currency translation |  |  | 0.3 |  |  | 0.2 |
Balance at December 31, 2022 |  | $ | 326.1 |  | $ | 283.2 |
Additions |  |  | 16.6 |  |  | 5.9 |
Deductions |  |  | (83.0 | ) |  | (77.2 | )
Currency translation |  |  | 6.6 |  |  | 6.6 |
Balance at December 31, 2023 |  | $ | 266.3 |  | $ | 218.5 |
Uncertain Tax Positions The following is a reconciliation of the total amounts of unrecognized tax benefits excluding interest and penalties for Holdings for the periods presented:
|  | Year Ended December 31, |
|  | 2021 |  |  | 2022 |  |  | 2023 |
Balance at January 1, |  | $ | 46.5 |  |  | $ | 55.9 |  |  | $ | 55.8 |
Gross increases - tax positions in prior periods |  |  | 7.7 |  |  |  | — |  |  |  | 2.2 |
Gross decreases - tax positions in prior periods |  |  | (1.6 | ) |  |  | (0.2 | ) |  |  | (5.1 | )
Gross increases - current period tax positions |  |  | 3.4 |  |  |  | 0.1 |  |  |  | 0.2 |
Statute of limitations expiration |  |  | (0.1 | ) |  |  | — |  |  |  | (0.2 | )
Balance at December 31, |  | $ | 55.9 |  |  | $ | 55.8 |  |  | $ | 52.9 |
The following is a reconciliation of the total amounts of unrecognized tax benefits excluding interest and penalties for CUSA for the periods presented:
|  | Year Ended December 31, |
|  | 2021 |  |  | 2022 |  |  | 2023 |
Balance at January 1, |  | $ | 46.5 |  |  | $ | 54.0 |  |  | $ | 53.9 |
Gross increases - tax positions in prior periods |  |  | 5.8 |  |  |  | — |  |  |  | 2.2 |
Gross decreases - tax positions in prior periods |  |  | (1.6 | ) |  |  | (0.2 | ) |  |  | (5.1 | )
Gross increases - current period tax positions |  |  | 3.4 |  |  |  | 0.1 |  |  |  | 0.2 |
Statute of limitations expiration |  |  | (0.1 | ) |  |  | — |  |  |  | (0.2 | )
Balance at December 31, |  | $ | 54.0 |  |  | $ | 53.9 |  |  | $ | 51.0 |
Holdings had $64.3 and $64.1 of unrecognized tax benefits, including interest and penalties, as of December 31, 2022 and 2023, respectively. Of these amounts, $64.3 and $64.1 represent the amount of unrecognized tax benefits that, if recognized, would impact the effective income tax rate for the years ended December 31, 2022 and 2023, respectively. CUSA had $62.5 and $62.2 of unrecognized tax benefits, including interest and penalties, as of December 31, 2022 and 2023, respectively. Of these amounts, $62.5 and $62.2 represent the amount of unrecognized tax benefits that, if recognized, would impact the effective income tax rate for the years ended December 31, 2022 and 2023, respectively. Holdings and CUSA had $8.5 and $11.1 accrued for interest and penalties as of December 31, 2022 and 2023, respectively. The Company believes it is reasonably possible that its existing unrecognized tax benefits may be reduced by an amount up to $35.9 within the next 12 months as a result of resolution of examination with taxing authorities. The Company prepares and files income tax returns based upon its interpretation of tax laws and regulations and record estimates based upon these judgments and interpretations. In the normal course of business, the Company’s income tax returns are subject to examination by various taxing authorities. Such examinations may result in future tax and interest assessments by these taxing authorities. Inherent uncertainties exist in estimates of tax contingencies due to changes in tax law resulting from legislation, regulation, and/or as concluded through the various jurisdictions' tax court systems. Significant judgment is exercised in applying complex tax laws and regulations across multiple global jurisdictions where we conduct our operations. The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained upon examination by the taxing authorities, including resolutions of any related appeals or litigation processes, based upon the technical merits of the position. The Company is no longer subject to income tax audits from the Internal Revenue Service for years before 2018. The Company is no longer subject to state income tax examinations by tax authorities in its major state jurisdictions for years before 2019. The Company is no longer subject to non-U.S. income tax examinations by tax authorities in its major non-U.S. tax jurisdictions for years before 2008. The Company is currently under IRS audit for tax years 2019 and 2020 and is under audit in the non-U.S. tax jurisdiction of Brazil.

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- 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 -Topic 946 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 13 -Publisher FASB -URI https://asc.fasb.org//1943274/2147480990/946-20-50-13 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 235 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//740/tableOfContent Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 14 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-14 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-21 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 270 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482526/740-270-50-1 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 17 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-17 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479360/740-10-S99-1 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479360/740-10-S99-2 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 30 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482603/740-30-50-2 + Details
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