Income Taxes (Tables)
|
12 Months Ended |
Dec. 31, 2024 |
|---|
| 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) |
|
2024 |
|
|
2023 |
|
|
2022 |
|
U.S. operations |
|
$ |
27,136 |
|
|
$ |
16,740 |
|
|
$ |
(48,311 |
) |
Foreign operations |
|
|
850,613 |
|
|
|
784,132 |
|
|
|
570,568 |
|
Earnings before income taxes |
|
$ |
877,749 |
|
|
$ |
800,872 |
|
|
$ |
522,257 |
|
|
| Summary of Income Tax |
Income tax consists of the following:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, |
|
(in thousands) |
|
2024 |
|
|
2023 |
|
|
2022 |
|
Current |
|
|
|
|
|
|
|
|
|
Federal |
|
$ |
17,868 |
|
|
$ |
16,839 |
|
|
$ |
256 |
|
State |
|
|
10,062 |
|
|
|
7,986 |
|
|
|
9,564 |
|
Foreign |
|
|
115,125 |
|
|
|
130,655 |
|
|
|
84,904 |
|
Total current |
|
|
143,055 |
|
|
|
155,480 |
|
|
|
94,724 |
|
Deferred |
|
|
|
|
|
|
|
|
|
Federal |
|
|
(8,601 |
) |
|
|
(2,079 |
) |
|
|
7,043 |
|
State |
|
|
89 |
|
|
|
(4,598 |
) |
|
|
(1,287 |
) |
Foreign |
|
|
13,593 |
|
|
|
2,146 |
|
|
|
(7,385 |
) |
Total deferred |
|
|
5,081 |
|
|
|
(4,531 |
) |
|
|
(1,629 |
) |
Income tax expense |
|
$ |
148,136 |
|
|
$ |
150,949 |
|
|
$ |
93,095 |
|
|
| 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) |
|
2024 |
|
|
2023 |
|
|
2022 |
|
Expected income tax expense |
|
$ |
184,327 |
|
|
$ |
168,183 |
|
|
$ |
109,674 |
|
State income tax, net of federal benefit |
|
|
2,334 |
|
|
|
(832 |
) |
|
|
(1,597 |
) |
Rate differential on foreign income |
|
|
(48,495 |
) |
|
|
(27,931 |
) |
|
|
(49,175 |
) |
Change in unrecognized tax benefits |
|
|
4,075 |
|
|
|
3,841 |
|
|
|
12,310 |
|
Intra-entity intellectual property transfer |
|
|
— |
|
|
|
— |
|
|
|
(3,232 |
) |
Non-deductible compensation |
|
|
12,235 |
|
|
|
14,397 |
|
|
|
13,668 |
|
Tax credits |
|
|
(6,489 |
) |
|
|
(6,813 |
) |
|
|
(7,544 |
) |
Excess tax (benefit) expense on stock compensation |
|
|
(4,701 |
) |
|
|
(854 |
) |
|
|
1,305 |
|
U.S. tax on foreign earnings |
|
|
8,986 |
|
|
|
8,180 |
|
|
|
7,611 |
|
Other |
|
|
(3,978 |
) |
|
|
(5,235 |
) |
|
|
217 |
|
Change in valuation allowance |
|
|
(158 |
) |
|
|
(1,987 |
) |
|
|
9,858 |
|
Income tax expense |
|
$ |
148,136 |
|
|
$ |
150,949 |
|
|
$ |
93,095 |
|
Effective tax rate |
|
|
16.9 |
% |
|
|
18.8 |
% |
|
|
17.8 |
% |
|
| 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) |
|
2024 |
|
|
2023 |
|
Deferred tax assets |
|
|
|
|
|
|
Inventory adjustments |
|
$ |
13,047 |
|
|
$ |
9,413 |
|
Accrued expenses |
|
|
128,396 |
|
|
|
109,510 |
|
Allowances for credit losses and chargebacks |
|
|
8,635 |
|
|
|
5,648 |
|
Intra-entity IP transfer |
|
|
314,626 |
|
|
|
330,545 |
|
Section 174 Capitalized Costs |
|
|
40,320 |
|
|
|
43,130 |
|
Loss carryforwards |
|
|
36,007 |
|
|
|
46,021 |
|
Business credit carryforward |
|
|
19,309 |
|
|
|
22,571 |
|
Share-based compensation |
|
|
14,264 |
|
|
|
10,486 |
|
Operating lease liabilities |
|
|
363,052 |
|
|
|
338,389 |
|
Total deferred tax assets |
|
|
937,656 |
|
|
|
915,713 |
|
Valuation allowance |
|
|
(56,176 |
) |
|
|
(56,334 |
) |
Total deferred tax assets, net |
|
|
881,480 |
|
|
|
859,379 |
|
Deferred tax liabilities |
|
|
|
|
|
|
Prepaid expenses |
|
|
2,448 |
|
|
|
3,873 |
|
Right-of-use assets |
|
|
363,052 |
|
|
|
338,389 |
|
Foreign intangibles |
|
|
23,068 |
|
|
|
16,116 |
|
Depreciation on property, plant and equipment |
|
|
63,702 |
|
|
|
63,021 |
|
Total deferred tax liabilities |
|
|
452,270 |
|
|
|
421,399 |
|
Net deferred tax assets |
|
$ |
429,210 |
|
|
$ |
437,980 |
|
|
| 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) |
|
2024 |
|
|
2023 |
|
Beginning balance |
|
$ |
43,216 |
|
|
$ |
41,247 |
|
Additions for current year tax positions |
|
|
6,168 |
|
|
|
4,530 |
|
Additions for prior year tax positions |
|
|
— |
|
|
|
1,379 |
|
Reductions for prior year tax positions |
|
|
(7,040 |
) |
|
|
— |
|
Settlement of uncertain tax positions |
|
|
— |
|
|
|
(1,722 |
) |
Reductions related to lapse of statute of limitations |
|
|
(1,936 |
) |
|
|
(2,218 |
) |
Ending balance |
|
$ |
40,408 |
|
|
$ |
43,216 |
|
|