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Income Taxes (Tables) | 12 Months Ended
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Dec. 31, 2021
Income Tax Disclosure [Abstract] |
Income Before Income Tax Provision (Benefit) | The Company’s income before income tax provision was subject to taxes in the following jurisdictions for the following periods (in thousands):
| Years Ended December 31,
| 2021 |  | 2020 |  | 2019
United States | $ | 295,322 |  |  | $ | 68,916 |  |  | $ | 55,352 |
Foreign | 55,320 |  |  | (196,394) |  |  | 40,417 |
| $ | 350,642 |  |  | $ | (127,478) |  |  | $ | 95,769 |
Expense (Benefit) for Income Taxes | The expense (benefit) for income taxes is comprised of (in thousands):
| Years Ended December 31,
| 2021 |  | 2020 |  | 2019
Current tax provision: |  |  |  |  |
Federal | $ | 2,916 |  |  | $ | 1,665 |  |  | $ | 1,022 |
State | 2,267 |  |  | 1,467 |  |  | 1,403 |
Foreign | 14,643 |  |  | 5,385 |  |  | 9,933 |
| 19,826 |  |  | 8,517 |  |  | 12,358 |
Deferred tax expense (benefit): |  |  |  |  |
Federal | 11,032 |  |  | 8,579 |  |  | 10,185 |
State | 7,146 |  |  | 5,166 |  |  | 335 |
Foreign | (9,350) |  |  | (22,806) |  |  | (6,338) |
| 8,828 |  |  | (9,061) |  |  | 4,182 |
Income tax provision (benefit) | $ | 28,654 |  |  | $ | (544) |  |  | $ | 16,540 |
Components of Deferred Tax Assets and Liabilities | Significant components of the Company’s deferred tax assets and liabilities as of December 31, 2021 and 2020 are as follows (in thousands):
| December 31,
| 2021 |  | 2020
Deferred tax assets: |  |  |
Operating loss carryforwards | $ | 149,895 |  |  | $ | 26,919 |
Tax credit carryforwards | 64,250 |  |  | 49,525 |
ASC Topic 842 lease liability | 396,378 |  |  | 52,785 |
Deemed landlord financing | 115,060 |  |  | — |
Other | 72,768 |  |  | 53,163 |
Total deferred tax assets | 798,351 |  |  | 182,392 |
Valuation allowance for deferred tax assets | (120,499) |  |  | (21,032) |
Deferred tax assets, net of valuation allowance | 677,852 |  |  | 161,360 |
Deferred tax liabilities: |  |  |
Basis difference related to fixed assets | (105,532) |  |  | — |
Basis difference related to intangible assets with an indefinite life | (331,130) |  |  | (100,062) |
ASC Topic 842 ROU assets | (375,697) |  |  | (49,910) |
Other | (7,920) |  |  | (10,281) |
Total deferred tax liabilities | (820,279) |  |  | (160,253) |
Net deferred tax assets (liabilities) are shown on the accompanying consolidated balance sheets as follows: |  |  |
Non-current deferred tax assets | 21,164 |  |  | 59,735 |
Non-current deferred tax liabilities | (163,591) |  |  | (58,628) |
Net deferred tax (liabilities)/ assets | $ | (142,427) |  |  | $ | 1,107 |
Credit Carryforward Expiry | As of December 31, 2021, the Company had federal and state income tax credit carryforwards of $56,134,000 and $25,786,000, respectively, which will expire if unused at various dates beginning on December 31, 2027. Such credit carryforwards expire as follows (in thousands):
U.S. foreign tax credit | $ | 3,165 |  |  | 2027 - 2031
U.S. research tax credit | 26,568 |  |  | 2031 - 2041
U.S. business tax credits | 26,401 |  |  | 2031 - 2041
State investment tax credits | 2,028 |  |  | Do not expire
State research tax credits - definite lived | 1,563 |  |  | 2030 - 2034
State research tax credits - indefinite lived | $ | 22,195 |  |  | Do not expire
Net Operating Losses Expiry | The Company has recorded a deferred tax asset, before consideration of reflecting the benefit of NOL and interest expense carryforwards. The NOLs and interest expense carryforwards expire as follows (in thousands):
U.S. loss carryforwards - definite lived | $ | 181,549 |  |  | 2028 - 2037
U.S. interest expense carryforwards - indefinite lived | 12,910 |  |  | Do not expire
U.S. loss carryforwards - indefinite lived | 213,743 |  |  | Do not expire
State loss carryforwards | $ | 269,930 |  |  | 2022 - 2041
Reconciliation of Effective Tax Rate on Income or Loss and Statutory Tax Rate | A reconciliation of the effective tax rate on income or loss and the statutory tax rate is as follows:
| Years Ended December 31,
| 2021 |  | 2020 |  | 2019
Statutory U.S. tax rate | 21.0 | % |  | 21.0 | % |  | 21.0 | %
State income taxes, net of U.S. tax benefit | 2.1 | % |  | (4.1) | % |  | 1.6 | %
Foreign income taxed at other than U.S. statutory rate | (3.3) | % |  | 7.0 | % |  | (5.0) | %
Federal tax credits | (2) | % |  | 2.8 | % |  | (3.5) | %
Goodwill impairment | — | % |  | (24.5) | % |  | — | %
Revaluation of Callaway stock attributable to Topgolf merger | (15.1) | % |  | — | % |  | — | %
Other non-deductible expenses | 0.7 | % |  | (1.7) | % |  | 1.2 | %
Non-deductible compensation | 1.4 | % |  | (0.7) | % |  | 1.5 | %
Stock compensation excess tax benefits | (1.6) | % |  | 1.4 | % |  | (1.5) | %
Foreign derived intangible income deduction | (2.1) | % |  | 1.1 | % |  | (3.2) | %
Impact of uncertain tax positions | (2.2) | % |  | (1.6) | % |  | 3.7 | %
Change in deferred tax valuation allowance | 7.8 | % |  | (0.7) | % |  | 0.2 | %
Other | 1.5 | % |  | 0.4 | % |  | 1.3 | %
Effective tax rate | 8.2 | % |  | 0.4 | % |  | 17.3 | %
Reconciliation of Unrecognized Tax Benefits | A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands):
| 2021 |  | 2020 |  | 2019
Balance at January 1 | $ | 28,302 |  |  | $ | 25,993 |  |  | $ | 11,832 |
Additions based on tax positions related to the current year | 1,727 |  |  | 3,119 |  |  | 3,224 |
Additions for tax positions of prior years | 526 |  |  | 474 |  |  | 593 |
Reductions for tax positions of prior years | (936) |  |  | (186) |  |  | (174) |
Settlement of tax audits | (2,665) |  |  | — |  |  | (7) |
Current year acquisitions | 6,740 |  |  | — |  |  | 11,006 |
Reductions due to lapsed statute of limitations | (7,046) |  |  | (1,098) |  |  | (481) |
Balance at December 31 | $ | 26,648 |  |  | $ | 28,302 |  |  | $ | 25,993 |
Major Jurisdictions No Longer Subject to Income Tax Examinations by Tax Authorities | The Company or one of its subsidiaries files income tax returns in the U.S. federal jurisdiction and various states and foreign jurisdictions. The Company is generally no longer subject to income tax examinations by tax authorities in its major jurisdictions as follows:
Major Tax Jurisdiction |  | Years No Longer Subject to Audit
U.S. Federal |  | 2010 and prior
California (U.S.) |  | 2008 and prior
Germany |  | 2013 and prior
Japan |  | 2015 and prior
South Korea |  | 2015 and prior
United Kingdom |  | 2017 and prior

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