Income Taxes (Tables)
|
12 Months Ended |
Dec. 31, 2023 |
|---|
| Income Tax Disclosure [Abstract] |
|
| Schedule of Earnings before Income Tax Expense |
The Company’s earnings before income tax expense consists of the following:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, |
|
(in thousands) |
|
2023 |
|
|
2022 |
|
|
2021 |
|
U.S. operations |
|
$ |
16,740 |
|
|
$ |
(48,311 |
) |
|
$ |
71,900 |
|
Foreign operations |
|
|
784,132 |
|
|
|
570,568 |
|
|
|
497,857 |
|
Earnings before income taxes |
|
$ |
800,872 |
|
|
$ |
522,257 |
|
|
$ |
569,757 |
|
|
| Summary of Income Tax |
Income tax consists of the following:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, |
|
(in thousands) |
|
2023 |
|
|
2022 |
|
|
2021 |
|
Current |
|
|
|
|
|
|
|
|
|
Federal |
|
$ |
16,839 |
|
|
$ |
256 |
|
|
$ |
34,288 |
|
State |
|
|
7,986 |
|
|
|
9,564 |
|
|
|
7,268 |
|
Foreign |
|
|
130,655 |
|
|
|
84,904 |
|
|
|
102,062 |
|
|
|
|
155,480 |
|
|
|
94,724 |
|
|
|
143,618 |
|
Deferred |
|
|
|
|
|
|
|
|
|
Federal |
|
|
(2,079 |
) |
|
|
7,043 |
|
|
|
(27,074 |
) |
State |
|
|
(4,598 |
) |
|
|
(1,287 |
) |
|
|
(4,481 |
) |
Foreign |
|
|
2,146 |
|
|
|
(7,385 |
) |
|
|
(357,938 |
) |
|
|
|
(4,531 |
) |
|
|
(1,629 |
) |
|
|
(389,493 |
) |
Income tax expense (benefit) |
|
$ |
150,949 |
|
|
$ |
93,095 |
|
|
$ |
(245,875 |
) |
|
| Summary of Earnings before Income Taxes |
Income taxes differ from the statutory tax rates as applied to earnings before income taxes as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, |
|
(in thousands) |
|
2023 |
|
|
2022 |
|
|
2021 |
|
Expected income tax expense |
|
$ |
168,183 |
|
|
$ |
109,674 |
|
|
$ |
119,649 |
|
State income tax, net of federal benefit |
|
|
(832 |
) |
|
|
(1,597 |
) |
|
|
(172 |
) |
Rate differential on foreign income |
|
|
(27,931 |
) |
|
|
(49,175 |
) |
|
|
(24,615 |
) |
Change in unrecognized tax benefits |
|
|
3,841 |
|
|
|
12,310 |
|
|
|
11,538 |
|
Intra-entity intellectual property transfer |
|
|
— |
|
|
|
(3,232 |
) |
|
|
(346,776 |
) |
FDII deduction |
|
|
— |
|
|
|
— |
|
|
|
(10,695 |
) |
Non-deductible compensation |
|
|
14,397 |
|
|
|
13,668 |
|
|
|
8,693 |
|
Tax credits |
|
|
(6,813 |
) |
|
|
(7,544 |
) |
|
|
(7,547 |
) |
Excess tax expense (benefit) on stock compensation |
|
|
(854 |
) |
|
|
1,305 |
|
|
|
976 |
|
Benefits provided by the Coronavirus Aid, Relief, and Economic Security Act |
|
|
— |
|
|
|
— |
|
|
|
(905 |
) |
U.S. tax on foreign earnings |
|
|
8,180 |
|
|
|
7,611 |
|
|
|
— |
|
Other |
|
|
(5,235 |
) |
|
|
217 |
|
|
|
(927 |
) |
Change in valuation allowance |
|
|
(1,987 |
) |
|
|
9,858 |
|
|
|
4,906 |
|
Income tax expense (benefit) |
|
$ |
150,949 |
|
|
$ |
93,095 |
|
|
$ |
(245,875 |
) |
Effective tax rate |
|
|
18.8 |
% |
|
|
17.8 |
% |
|
|
(43.2 |
)% |
|
| Deferred Tax Assets and Liabilities |
The tax effects of temporary differences giving rise to deferred tax assets and liabilities are presented below:
|
|
|
|
|
|
|
|
|
|
|
As of December 31, |
|
(in thousands) |
|
2023 |
|
|
2022 |
|
Deferred tax assets |
|
|
|
|
|
|
Inventory adjustments |
|
$ |
9,413 |
|
|
$ |
10,810 |
|
Accrued expenses |
|
|
109,510 |
|
|
|
99,185 |
|
Allowances for bad debts and chargebacks |
|
|
5,648 |
|
|
|
4,728 |
|
Advance payment |
|
|
— |
|
|
|
6,339 |
|
Intra-entity IP transfer |
|
|
330,545 |
|
|
|
343,106 |
|
Section 174 Capitalized Costs |
|
|
43,130 |
|
|
|
15,721 |
|
Loss carryforwards |
|
|
46,021 |
|
|
|
50,558 |
|
Business credit carryforward |
|
|
22,571 |
|
|
|
25,289 |
|
Share-based compensation |
|
|
10,486 |
|
|
|
7,725 |
|
Operating lease liabilities |
|
|
338,389 |
|
|
|
317,449 |
|
Valuation allowance |
|
|
(56,334 |
) |
|
|
(58,321 |
) |
Total deferred tax assets |
|
|
859,379 |
|
|
|
822,589 |
|
Deferred tax liabilities |
|
|
|
|
|
|
Prepaid expenses |
|
|
3,873 |
|
|
|
5,073 |
|
Right-of-use assets |
|
|
338,389 |
|
|
|
317,449 |
|
Foreign intangibles |
|
|
16,116 |
|
|
|
6,970 |
|
Depreciation on property, plant and equipment |
|
|
63,021 |
|
|
|
47,563 |
|
Total deferred tax liabilities |
|
|
421,399 |
|
|
|
377,055 |
|
Net deferred tax assets |
|
$ |
437,980 |
|
|
$ |
445,534 |
|
|
| Reconciliation of Unrecognized Tax Benefits |
A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
|
|
|
|
|
|
|
|
|
|
|
As of December 31, |
|
(in thousands) |
|
2023 |
|
|
2022 |
|
Beginning balance |
|
$ |
41,247 |
|
|
$ |
66,951 |
|
Additions for current year tax positions |
|
|
4,530 |
|
|
|
5,345 |
|
Additions for prior year tax positions |
|
|
1,379 |
|
|
|
4,616 |
|
Reductions for prior year tax positions |
|
|
— |
|
|
|
(674 |
) |
Settlement of uncertain tax positions |
|
|
(1,722 |
) |
|
|
(32,954 |
) |
Reductions related to lapse of statute of limitations |
|
|
(2,218 |
) |
|
|
(2,037 |
) |
Ending balance |
|
$ |
43,216 |
|
|
$ |
41,247 |
|
|