Income Taxes

3 Months Ended

Mar. 31, 2023

Accrued Income Taxes [Abstract]

Income Taxes

Income Taxes

Income tax expense attributable to our earnings (loss) from continuing operations before income taxes differs from the amounts computed using the applicable income tax rate as a result of the following factors:

	Three months ended March 31,
	2023		2022
	in millions
Computed “expected” tax benefit (expense) (a)	$	164.7	$	(219.8)
Non-deductible or non-taxable foreign currency exchange results	(88.2)		128.2
Basis and other differences in the treatment of items associated with investments in subsidiaries and affiliates (b)	(76.6)		62.2
Non-deductible or non-taxable interest and other expenses	(26.1)		(32.2)
Valuation allowance	19.7		13.9
International rate differences (c)	(4.4)		(40.9)
Other, net	(1.6)		7.4
Total income tax expense	$	(12.5)	$	(81.2)

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(a)The statutory or “expected” tax rates are the U.K. rates of 23.5% for the 2023 period and 19.0% for the 2022 period. The statutory rate for the 2023 period represents the blended rate in effect for the year ended December 31, 2023 based on the 19.0% statutory rate that was in effect for the first quarter of 2023 and the 25.0% statutory rate that is in effect from April 1, 2023.

(b)Amounts reflect the net impact of differences in the treatment of income and loss items between financial reporting and tax accounting related to investments in subsidiaries and affiliates, including the effects of foreign earnings.

(c)Amounts reflect adjustments (either a benefit or expense) to the “expected” tax benefit (expense) for statutory rates in jurisdictions in which we operate outside of the U.K.

On August 16, 2022, the Inflation Reduction Act was signed into law in the U.S. Although this legislation does not increase the U.S. corporate income tax rate, it includes, among other provisions, a new corporate alternative minimum tax (CAMT) on “adjusted financial statement income” that is effective for tax years beginning after December 31, 2022. We do not currently anticipate the CAMT will have a material impact on our consolidated financial statements although we will continue to monitor additional guidance as it is issued to assess the impact to our tax position. We will disregard our CAMT status when evaluating our deferred tax assets under the regular U.S. tax system.

As of March 31, 2023, our unrecognized tax benefits were $442.7 million, of which $345.4 million would have a favorable impact on our effective income tax rate if ultimately recognized, after considering amounts that we would expect to be offset by valuation allowances and other factors. During the next 12 months, we do not expect any material reductions to our unrecognized tax benefits related to tax positions taken as of March 31, 2023. No assurance can be given as to the nature or impact of any changes in our unrecognized tax positions during the next 12 months.    

Certain of our subsidiaries are currently involved in income tax examinations in various jurisdictions in which we operate, including Belgium, Ireland, Luxembourg and the U.S. While we do not expect adjustments from the foregoing examinations to have a material impact on our consolidated financial position, results of operations or cash flows, no assurance can be given that this will be the case given the amounts involved and the complex nature of the related issues.

On October 7, 2022, the U.S. Department of Justice filed suit against Liberty Global, Inc. (LGI), a wholly-owned U.S. subsidiary of Liberty Global, in the U.S. District Court of Colorado for unpaid federal income taxes and penalties for the 2018 tax year of approximately $284 million. This action by the U.S. Department of Justice is related to the November 2020 complaint filed by LGI in the District Court of Colorado seeking a refund of approximately $110 million of taxes, penalties and interest associated with the application of certain temporary Treasury regulations issued in June 2019. No amounts have been accrued by LGI with respect to this matter. We will vigorously defend this matter and continue to actively pursue our claim for refund.