Income Taxes

12 Months Ended

Dec. 31, 2023

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

As discussed in Note 2-Summary of Significant Accounting Policies, the Company operates in compliance with REIT requirements for federal income tax purposes. It is management’s intention to adhere to these requirements and maintain the Company’s REIT status. Most states where we operate conform to the federal rules recognizing REITs. The Operating Partnership is a regarded partnership under federal tax law, and the Operating Partnership’s accompanying consolidated financial statements include the related provision balances for federal income taxes. A provision for taxes of the TRSs and of foreign branches of the REIT is included in our consolidated financial statements.

The unremitted earnings and basis of certain foreign subsidiaries are indefinitely reinvested, except principally in Canada. Determination of that liability is not practicable. If our plans change in the future or if we elect to repatriate the unremitted earnings of our foreign subsidiaries, we would be subject to additional income taxes which could result in a higher effective tax rate. With respect to the foreign subsidiaries owned directly or indirectly by the REIT or Operating Partnership, any unremitted earnings would not be subject to additional U.S. income tax because the REIT would distribute 100% of such earnings or would receive a participation exemption.

The GILTI provisions of the TCJA impose a tax on the income of certain foreign subsidiaries in excess of a specified return on tangible assets used by the foreign companies. The Company continues to account for the GILTI inclusion as a period cost and thus has not recorded any deferred tax liability associated with GILTI. There was no material taxable deemed dividend estimated or recorded for the Company for 2023, 2022 and 2021.

Following is a summary of the income from continuing operations before income taxes in the U.S. and foreign operations:

	2023		2022		2021
Income/(loss) from continuing operations before income taxes	(In thousands)
U.S.	$	(35,662)	$	37,040	$	(8,046)
Foreign	(292,427)		(66,968)		(22,551)
Total Pre-tax book income/(loss) from continuing operations before income taxes	$	(328,089)	$	(29,928)	$	(30,597)

The benefit (expense) for income taxes from continuing operations for the years ended December 31, 2023, 2022 and 2021 is as follows:

	2023		2022		2021
	(In thousands)
Current
U.S. federal	$	(9)	$	290	$	38
State	(3,318)		(620)		(236)
Foreign	(5,181)		(3,395)		(7,380)
Total current portion	(8,508)		(3,725)		(7,578)
Deferred
U.S. federal	(1,264)		(3,895)		5,884
State	347		360		1,220
Foreign	11,698		26,096		2,043
Total deferred portion	10,781		22,561		9,147
Total income tax benefit from continuing operations	$	2,273	$	18,836	$	1,569

Income tax benefit attributable to income from continuing operations before income taxes differs from the

amounts computed by applying the U.S. statutory federal income tax rate of 21% to income from continuing operations before income taxes. The reconciliation between the statutory rate and reported amount is as follows:

	2023		2022		2021
	(In thousands)
Income tax benefit (expense) from continuing operations at statutory rates	$	68,899	$	6,285	$	6,425
Earnings from REIT - not subject to tax	(6,612)		7,742		(3,599)
State income taxes, net of federal income tax benefit	(2,616)		(524)		(836)
Foreign income taxed at different rates	11,432		1,296		(983)
Change in valuation allowance	(10,619)		1,307		6,198
Goodwill Impairment	(57,436)
Non-deductible expenses	(1,243)		(4,379)		4,398
Change in status of investment	—		6,503		—
Change in enacted tax rate	—		—		(11,802)
Other	468		606		1,768
Total	$	2,273	$	18,836	$	1,569

The tax effects of temporary differences that give rise to deferred tax assets and deferred tax liabilities as of December 31, 2023 and 2022 are as follows:

	2023		2022
	(In thousands)
Deferred tax assets:
Net operating loss and credits carryforwards	$	74,439	$	54,372
Accrued expenses	34,125		33,404
Share-based compensation	2,890		3,192
Lease obligations	15,155		21,552
Other assets	3,909		1,680
Total gross deferred tax assets	130,518		114,200
Less: valuation allowance	(10,895)		(84)
Total net deferred tax assets	119,623		114,116
Deferred tax liabilities:
Intangible assets and goodwill	(76,860)		(74,541)
Property, buildings and equipment	(157,659)		(145,936)
Lease right-of-use assets	(15,646)		(21,811)
Other liabilities	(4,789)		(5,889)
Total gross deferred tax liabilities	(254,954)		(248,177)
Net deferred tax liability	$	(135,331)	$	(134,061)

As of December 31, 2023, the U.S. TRS has gross U.S. federal net operating loss carryforwards of approximately $57.7 million, of which $11.5 million was generated prior to 2018 and will expire between 2033 and 2036. The remaining $46.2 million in losses have no expiration, but can only be used to offset up to 80% of future taxable income annually. These losses are subject to an annual limitation under IRC section 382 as a result of our IPO and a subsequent ownership change that occurred in March of 2019; however, the limitation should not impair the Company’s ability to utilize the losses. The Company has $79.5 million in REIT U.S. federal net operating loss carryforwards which were obtained through acquisitions. These losses are also subject to an annual limitation under IRC section 382; no deferred tax value has been recorded as they can only be used to reduce required distributions to stockholders, of which none has been used for this purpose.

The Company has gross state net operating loss carryforwards of approximately $43.3 million from its TRSs, of which $33.7 million will expire at various times between 2024 and 2043. The remaining $9.6 million was generated after 2017 and have no expiration.

The Company has gross foreign net operating loss carryforwards of approximately $127.9 million, of which $37.7 million will expire at various times between 2023 and 2041. The remaining $90.2 million can be carried forward indefinitely.

Annually we consider whether it is more-likely-than-not that the deferred tax assets will be realized. In making this assessment, we consider recent operating results, the expected scheduled reversal of deferred tax liabilities, projected future taxable benefits and tax planning strategies.

The Company’s policy is to accrue for interest and penalties related to unrecognized tax benefits as a component of income tax expense.

As of December 31, 2023, the Company is generally no longer subject to U.S. federal, state, local, or foreign examinations by tax authorities for years before 2018. However, for U.S. income tax purposes, the 2012, 2013, and 2016 remain open, to the extent that net operating losses were generated in those years and continue to be subject to adjustments from taxing authorities in the tax year they are utilized.