Income Taxes

12 Months Ended

Dec. 31, 2022

Income Tax Disclosure [Abstract]

Income Taxes

NOTE 13. INCOME TAXES

Components of Earnings Before Income Taxes

The following table summarizes the components of earnings before income taxes for the years ended December 31 (in thousands):

	2022		2021		2020
Domestic	$	2,423,809	$	2,208,168	$	1,030,609
International		1,267,001		1,114,680		716,479
Earnings before income taxes	$	3,690,810	$	3,322,848	$	1,747,088

Summary of Current and Deferred Income Taxes

The following table summarizes the components of the provision for income taxes for the years ended December 31 (in thousands):

	2022			2021			2020
Current income tax expense (benefit):
U.S. federal	$	(6,645	)	$	58,906		$	48,440
International		112,489			103,488			65,720
State and local		16,930			10,542			15,554
Total current income tax expense		122,774			172,936			129,714
Deferred income tax expense (benefit):
U.S. federal		3,359			2,895			(2,464	)
International		9,279			(1,573	)		3,208
Total deferred income tax expense		12,638			1,322			744
Total income tax expense	$	135,412		$	174,258		$	130,458

Current Income Taxes

We recognize current income tax expense for the federal and state income taxes incurred by our TRSs and taxes incurred in certain states and foreign jurisdictions. Current income tax expense fluctuates from period to period based primarily on the timing of our taxable income. Taxable income incurred over the last three years was principally due to the following: (i) the contribution of real estate properties to our unconsolidated co-investment ventures and sales to third parties; (ii) recurring and transactional strategic capital fees earned; and (iii) taxable earnings from unconsolidated co-investment ventures. For 2021 and 2020, we had higher current tax expense in the U.S. primarily due to the tax incurred on the sale of assets. Included in 2022 is the reversal of a liability for an uncertain tax position, related to a previous acquisition, due to the expiration of the statute of limitations.

During the years ended December 31, 2022, 2021 and 2020, cash paid for income taxes, net of refunds, was $130.0 million, $148.7 million and $100.7 million, respectively.

Deferred Income Taxes

The deferred income tax expense recognized in 2022, 2021 and 2020 was primarily due to changes in temporary differences and utilization of NOLs.

The following table summarizes the deferred income tax assets and liabilities at December 31 (in thousands):

	2022			2021
Gross deferred income tax assets:
NOL carryforwards	$	229,410		$	272,713
Basis difference – real estate properties		94,610			99,984
Basis difference – equity investments		17,042			8,462
Section 163(j) interest limitation		2,218			1,599
Capital loss carryforward		6,903			14,238
Other – temporary differences		9,250			10,027
Total gross deferred income tax assets		359,433			407,023
Valuation allowance		(295,834	)		(337,587	)
Gross deferred income tax assets, net of valuation allowance		63,599			69,436
Gross deferred income tax liabilities:
Basis difference – real estate properties		116,102			104,292
Basis difference – equity investments		40,333			30,276
Other – temporary differences		1,189			949
Total gross deferred income tax liabilities		157,624			135,517
Net deferred income tax liabilities	$	94,025		$	66,081

At December 31, 2022, we had NOL carryforwards as follows (in thousands):

	U.S.		Europe		Mexico		Japan		Other
Gross NOL carryforward	$	68,491	$	564,972	$	161,964	$	62,563	$	36,810
Tax-effected NOL carryforward		17,415		142,330		51,290		9,258		9,117
Valuation allowance		16,811		137,055		51,290		9,258		9,117
Net deferred tax asset – NOL carryforward	$	604	$	5,275	$	-	$	-	$	-
Expiration periods	2023 – 2042		2023 – indefinite		2023 – 2033		2023 – 2032		2023 – indefinite

The deferred tax asset valuation allowance at December 31, 2022, was adequate to reduce the total deferred tax asset to an amount that we estimate will more likely than not be realized.

Liability for Uncertain Tax Positions

During the years ended December 31, 2022, 2021 and 2020, we believe that we had complied with the REIT requirements of the IRC. The statute of limitations for our tax returns is generally three years. As such, our tax returns that remain subject to examination would be primarily from 2019 and thereafter. Liabilities or any related settlements for uncertain tax positions for the years ended December 31, 2022, 2021 and 2020 were not material to our Consolidated Financial Statements.