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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2022

Income Before Income Tax Provision (Benefit)

The Company’s income (loss) before income taxes was subject to taxes in the following jurisdictions for the following periods (in millions):


	Years Ended December 31,
	2022		2021		2020
United States	$	97.8	$	295.3	$	68.9
Foreign	44.1		55.3		(196.4)
	$	141.9	$	350.6	$	(127.5)

Expense (Benefit) for Income Taxes

The expense (benefit) for income taxes is comprised of (in millions):


	Years Ended December 31,
	2022		2021		2020
Current tax provision:
Federal	$	9.8	$	2.9	$	1.7
State	5.7		2.3		1.5
Foreign	6.4		14.6		5.3
	21.9		19.8		8.5
Deferred tax expense (benefit):
Federal	(42.6)		11.0		8.6
State	7.9		7.2		5.2
Foreign	(3.2)		(9.4)		(22.9)
	(37.9)		8.8		(9.1)
Income tax (benefit) provision	$	(16.0)	$	28.6	$	(0.6)

Components of Deferred Tax Assets and Liabilities

Significant components of the Company’s deferred tax assets and liabilities as of December 31, 2022 and 2021 are as follows (in millions):


	December 31,
	2022		2021
Deferred tax assets:
Operating loss carryforwards	$	135.9	$	149.9
Tax credit carryforwards	57.3		64.3
ASC Topic 842 lease liability	441.6		396.4
Deemed landlord financing	167.5		115.1
Other	90.3		72.7
Total deferred tax assets	892.6		798.4
Valuation allowance for deferred tax assets	(100.2)		(120.5)
Deferred tax assets, net of valuation allowance	792.4		677.9

Deferred tax liabilities:
Basis difference related to fixed assets	(146.6)		(105.5)
Basis difference related to intangible assets with an indefinite life	(332.4)		(331.2)
ASC Topic 842 ROU assets	(414.7)		(375.7)
Other	(0.1)		(7.9)
Total deferred tax liabilities	(893.8)		(820.3)
Net deferred tax assets (liabilities) are shown on the accompanying consolidated balance sheets as follows:
Non-current deferred tax assets	16.1		21.2
Non-current deferred tax liabilities	(117.5)		(163.6)
Net deferred tax (liabilities)/ assets	$	(101.4)	$	(142.4)

Credit Carryforward Expiry

As of December 31, 2022, the Company had federal and state income tax credit carryforwards of $46.6 million and $29.0 million, respectively, which will expire if unused at various dates beginning on December 31, 2026. Such carryforwards expire as follows (in millions):


U.S. foreign tax credit	$	2.0	2027-2032
U.S. research tax credit	$	8.4	2026-2042
U.S. business tax credits	$	36.2	2035-2042
State investment tax credits	$	2.3	Do not expire
State research tax credits - definite lived	$	1.4	2031-2034
State research tax credits - indefinite lived	$	25.3	Do not expire

Net Operating Losses Expiry

As of December 31, 2022, the Company had federal and state net operating loss (“NOLs”) and interest expense carryforwards of $544.1 million and $17.3 million, respectively. Such carryforwards expire as follows (in millions):


U.S. loss carryforwards - definite lived	$	96.8	2028-2037
U.S. interest expense carryforwards - indefinite lived	$	17.3	Do not expire
U.S. loss carryforwards - indefinite lived	$	215.9	Do not expire
State loss carryforwards	$	231.4	2023-2040

Reconciliation of Effective Tax Rate on Income or Loss and Statutory Tax Rate

A reconciliation of the effective tax rate on income or loss and the statutory tax rate is as follows:


	Years Ended December 31,
	2022		2021		2020
Statutory U.S. tax rate	21.0	%	21.0	%	21.0	%
State income taxes, net of U.S. tax benefit	7.1	%	2.1	%	(4.1)	%
Foreign income taxed at other than U.S. statutory rate	(8.9)	%	(3.3)	%	7.0	%
Federal tax credits	(8.7)	%	(2.0)	%	2.8	%
Goodwill impairment	—	%	—	%	(24.5)	%
Revaluation of Company stock attributable to Topgolf merger	—	%	(15.1)	%	—	%
Other non-deductible expenses	1.0	%	0.7	%	(1.7)	%
Non-deductible compensation	4.5	%	1.4	%	(0.7)	%
U.S. Foreign tax inclusion	1.0	%	0.5	%	(0.4)	%
Foreign derived intangible income deduction	(3.0)	%	(2.1)	%	1.1	%
Stock compensation excess tax benefits	—	%	(1.6)	%	1.4	%
Impact of uncertain tax positions	(0.8)	%	(2.2)	%	(1.6)	%
Change in deferred tax valuation allowance	(23.0)	%	7.8	%	(0.7)	%
Other	(1.5)	%	1.0	%	0.8	%
Effective tax rate	(11.3)	%	8.2	%	0.4	%

Reconciliation of Unrecognized Tax Benefits

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in millions):


	2022		2021		2020
Balance at January 1	$	26.6	$	28.3	$	26.0
Additions based on tax positions related to the current year	1.7		1.7		3.1
Additions for tax positions of prior years	1.2		0.5		0.5
Reductions for tax positions of prior years	(1.5)		(0.9)		(0.2)
Settlement of tax audits	—		(2.7)		—
Current year acquisitions	—		6.7		—
Reductions due to lapsed statute of limitations	(1.8)		(7.0)		(1.1)
Balance at December 31	$	26.2	$	26.6	$	28.3

Major Jurisdictions No Longer Subject to Income Tax Examinations by Tax Authorities

The Company or one of its subsidiaries files income tax returns in the U.S. federal jurisdiction and various states and foreign jurisdictions. The Company is generally no longer subject to income tax examinations by tax authorities in its major jurisdictions as follows:


Major Tax Jurisdiction						Years No Longer Subject to Audit
U.S. Federal						2010 and prior
California (U.S.)						2008 and prior
Germany						2013 and prior
Japan						2016 and prior
South Korea						2016 and prior
United Kingdom						2018 and prior