Income Taxes

12 Months Ended

Dec. 31, 2020

Income Tax Disclosure [Abstract]

Income Taxes

Income taxes

The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the consolidated financial statements. Under this method, deferred tax assets and liabilities are determined on the basis of the differences between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse.

Income before income taxes from continuing operations consisted of the following: 

	Year ended December 31,
	2020		2019		2018
Domestic	$	1,287,976	$	1,307,299	$	1,083,578
International	30,286		(111,860)		(35,100)
	$	1,318,262	$	1,195,439	$	1,048,478

 Income tax expense for continuing operations consisted of the following:

	Year ended December 31,
	2020		2019		2018
Current:
Federal	$	47,171	$	208,339	$	140,064
State	21,442		58,026		32,990
International	17,481		15,545		7,557
Total current income tax	86,094		281,910		180,611
Deferred:
Federal	198,623		44,263		52,034
State	27,206		(25,836)		21,096
International	2,009		(20,709)		4,659
Total deferred income tax	227,838		(2,282)		77,789
	$	313,932	$	279,628	$	258,400

Income taxes are allocated between continuing and discontinued operations as follows:

	Year ended December 31,
	2020		2019		2018
Continuing operations	$	313,932	$	279,628	$	258,400
Discontinued operations	1,657		40,689		99,768
	$	315,589	$	320,317	$	358,168

The reconciliation between the Company’s effective tax rate from continuing operations and the U.S. federal income tax rate is as follows:

	Year ended December 31,
	2020		2019		2018
Federal income tax rate	21.0	%	21.0	%	21.0	%
State income taxes, net of federal benefit	3.4		2.3		4.1
Change in International valuation allowance	1.5		1.3		0.9
Political advocacy costs	1.7		0.2		2.3
Nondeductible executive compensation	1.2		0.8		0.7
Unrecognized tax benefits	0.4		2.4		0.2
Other	(0.6)		0.3		—
Impact of noncontrolling interests primarily attributable to non-tax paying entities	(4.8)		(4.9)		(4.6)
Effective tax rate	23.8	%	23.4	%	24.6	%

Deferred tax assets and liabilities arising from temporary differences for continuing operations were as follows:

	December 31,
	2020		2019
Receivables	$	9,324	$	19,095
Accrued liabilities	64,982		64,458
Operating lease liabilities	584,656		580,110
Net operating loss carryforwards	167,398		139,690
Other	62,110		55,108
Deferred tax assets	888,470		858,461
Valuation allowance	(114,824)		(91,925)
Net deferred tax assets	773,646		766,536
Intangible assets	(634,736)		(563,914)
Property and equipment	(274,742)		(162,628)
Operating lease assets	(532,082)		(527,056)
Investments in partnerships	(101,996)		(64,960)
Other	(39,690)		(25,521)
Deferred tax liabilities	(1,583,246)		(1,344,079)
Net deferred tax liabilities	$	(809,600)	$	(577,543)

 At December 31, 2020, the Company had federal net operating loss carryforwards of approximately $99,657 that expire through 2036, although a substantial amount expire by 2029. The Company also had state net operating loss carryforwards of $488,070, some of which have an indefinite life, although a substantial amount expire by 2040 and international net operating loss carryforwards of $296,451, some of which will begin to expire in 2021 though the majority have an indefinite life. The Company has a state capital loss carryover of $297,748, the majority of which expires in 2024. The utilization of a portion of these losses may be limited in future years based on the profitability of certain entities. A valuation allowance is recorded to account for the unrealizable balances in the table above. The net increase of $22,899 in the valuation allowance is primarily due to newly created net operating loss carryforwards in state and foreign jurisdictions that the Company does not anticipate being able to utilize.

The Company's foreign earnings continue to be indefinitely reinvested as of December 31, 2020. As a result of the passage of the Tax Cuts and Jobs Act (2017 Tax Act), the Company does not expect such earnings to be taxable if remitted.

Unrecognized tax benefits

A reconciliation of the beginning and ending liability for unrecognized tax benefits that do not meet the more-likely-than-not threshold is as follows:

	Year ended December 31,
	2020		2019
Beginning balance	$	68,214	$	40,382
Additions for tax positions related to current year	2,293		3,378
Additions for tax positions related to prior years	258		24,722
Reductions related to lapse of applicable statute	(133)		(268)
Reductions related to settlements with taxing authorities	(430)		—
Ending balance	$	70,202	$	68,214

As of December 31, 2020, the Company’s total liability for unrecognized tax benefits relating to tax positions that do not meet the more-likely-than-not threshold is $70,202, of which $66,607 would impact the Company’s effective tax rate if recognized. This balance represents an increase of $1,988 from the December 31, 2019 balance of $68,214.

The Company recognizes accrued interest and penalties related to unrecognized tax benefits in income tax expense. At December 31, 2020 and 2019, the Company had approximately $17,864 and $14,428, respectively, accrued for interest and penalties related to unrecognized tax benefits, net of federal tax benefit.

The Company and its subsidiaries file U.S. federal and state income tax returns and various foreign income tax returns. The Company is no longer subject to U.S. federal and state examinations by tax authorities for years before 2014 and 2009, respectively. In addition to being under audit in various state and local tax jurisdictions, the Company’s federal tax returns are under audit by the Internal Revenue Service for the years 2014-2017.