Annual report pursuant to Section 13 and 15(d)

INCOME TAXES (Tables)

v3.19.3.a.u2
INCOME TAXES (Tables)
12 Months Ended
Dec. 31, 2019
Income Tax Disclosure [Abstract]  
Provision for Federal and Foreign Income Tax Expense for Continuing Operations

The Company’s provision for federal and foreign income tax expense for continuing operations consisted of the following:

 

 

 

Year Ended December 31,

 

 

 

2017

 

 

2018

 

 

2019

 

Income before income taxes:

 

 

 

 

 

 

 

 

 

 

 

 

U.S.

 

$

280,535

 

 

$

289,727

 

 

$

235,571

 

Foreign

 

 

64,842

 

 

 

21,007

 

 

 

38,189

 

Total

 

$

345,377

 

 

$

310,734

 

 

$

273,760

 

Current and Deferred Income Taxes

Current and deferred income taxes were as follows:

 

 

 

Year Ended December 31,

 

 

 

2017

 

 

2018

 

 

2019

 

Current:

 

 

 

 

 

 

 

 

 

 

 

 

Federal

 

$

54,435

 

 

$

46,826

 

 

$

45,247

 

Foreign

 

 

29,306

 

 

 

11,822

 

 

 

24,022

 

State

 

 

10,632

 

 

 

13,594

 

 

 

12,486

 

Total current expense

 

$

94,373

 

 

$

72,242

 

 

$

81,755

 

Deferred:

 

 

 

 

 

 

 

 

 

 

 

 

Federal

 

$

(14,046

)

 

$

27,055

 

 

$

(298

)

Foreign

 

 

(4,270

)

 

 

(6,166

)

 

 

5

 

State

 

 

3,301

 

 

 

2,298

 

 

 

(1,550

)

Total deferred taxes

 

$

(15,015

)

 

$

23,187

 

 

$

(1,843

)

Income taxes

 

$

79,358

 

 

$

95,429

 

 

$

79,912

 

Reconciliation Between Income Tax Expense and Taxes Computed

A reconciliation between income tax expense and taxes computed by applying the applicable statutory federal income tax rate to income before income taxes follows:

 

 

 

Year Ended December 31,

 

 

 

2017

 

 

2018

 

 

2019

 

Computed statutory tax expense

 

$

120,882

 

 

$

65,254

 

 

$

57,490

 

State and local income taxes, net of federal income tax impact

 

 

12,786

 

 

 

12,611

 

 

 

8,479

 

Changes in valuation allowance

 

 

44

 

 

131

 

 

2,532

 

Foreign tax rate differential

 

 

(245

)

 

 

2,235

 

 

 

4,646

 

Foreign dividends

 

 

13,662

 

 

 

 

 

Foreign tax credits

 

 

(21,647

)

 

 

3,927

 

 

 

4,143

 

Impacts related to 2017 Tax Act (1)(2)

 

 

(44,889

)

 

 

19,180

 

 

 

Changes in uncertain tax positions

 

 

983

 

 

 

(6,139

)

 

 

197

 

Other — net

 

 

(2,218

)

 

 

(1,770

)

 

 

2,425

 

Income taxes

 

$

79,358

 

 

$

95,429

 

 

$

79,912

 

 

(1)

The amount for the year ended December 31, 2018 includes a one-time charge to true-up deferred taxes of $1,913 and a reduction in deferred tax assets with regard to foreign tax credit carryforwards of $17,267.

(2)

The amount for the year ended December 31, 2017 includes a one-time benefit due to re-measurement of net deferred tax liabilities using a lower U.S. corporate tax rate and a reassessment of permanently reinvested earnings of ($79,834),  a deemed repatriation tax of $14,512, and a reduction in deferred tax assets with regard to foreign tax credit carryforwards of $20,433.

Tax Effects of Significant Temporary Differences and Tax Loss and Tax Credit Carryforwards

The tax effects of significant temporary differences and tax loss and tax credit carryforwards comprising the net long-term deferred income tax liabilities as of December 31, 2018 and 2019 consisted of the following:

 

 

 

December 31,

 

 

 

2018

 

 

2019

 

Deferred liabilities:

 

 

 

 

 

 

 

 

Theatre properties and equipment

 

$

158,797

 

 

$

138,382

 

Operating lease right-of-use assets

 

 

 

 

 

322,750

 

Intangible  asset — other

 

 

33,561

 

 

 

39,282

 

Intangible  asset — tradenames

 

 

73,261

 

 

 

72,821

 

Investment in partnerships

 

 

63,217

 

 

 

62,914

 

Total deferred liabilities

 

 

328,836

 

 

 

636,149

 

Deferred assets:

 

 

 

 

 

 

 

 

Deferred lease expenses

 

 

13,464

 

 

 

 

Deferred revenue - NCM

 

 

86,035

 

 

 

85,362

 

Deferred revenue - Other

 

 

4,153

 

 

 

9,953

 

Gift Cards

 

 

6,173

 

 

 

7,402

 

Operating lease obligations

 

 

 

 

 

336,034

 

Finance lease obligations

 

 

63,895

 

 

 

34,956

 

Tax impact of items in accumulated other comprehensive income

 

 

2,237

 

 

 

5,131

 

Other tax loss carryforwards

 

 

15,608

 

 

 

17,053

 

Other tax credit carryforwards

 

 

42,989

 

 

 

46,577

 

Other expenses, not currently deductible for tax purposes

 

 

17,755

 

 

 

21,573

 

Total deferred assets

 

 

252,309

 

 

 

564,041

 

Net deferred income tax liability before valuation allowance

 

 

76,527

 

 

 

72,108

 

Valuation allowance against deferred assets – non-current

 

 

54,725

 

 

 

60,359

 

Net deferred income tax liability

 

$

131,252

 

 

$

132,467

 

Net deferred tax (asset) liability — Foreign

 

$

(5,449

)

 

$

(4,539

)

Net deferred tax liability — U.S.

 

 

136,701

 

 

 

137,006

 

Total

 

$

131,252

 

 

$

132,467

 

Reconciliation of Total Amounts of Unrecognized Tax Benefits Excluding Interest and Penalties

The following is a reconciliation of the total amounts of unrecognized tax benefits excluding interest and penalties, for the years ended December 31, 2017, 2018 and 2019:

 

 

 

Year Ended December 31,

 

 

 

2017

 

 

2018

 

 

2019

 

Balance at January 1,

 

$

17,403

 

 

$

18,266

 

 

$

10,561

 

Gross increases - tax positions in prior periods

 

 

92

 

 

 

 

1

 

Gross decreases - tax positions in prior periods

 

 

(12

)

 

 

(143

)

 

 

Gross increases - current period tax positions

 

 

265

 

 

 

424

 

 

 

202

 

Settlements

 

 

(177

)

 

 

(7,191

)

 

 

(522

)

Foreign currency translation adjustments

 

 

695

 

 

 

(795

)

 

 

(7

)

Balance at December 31,

 

$

18,266

 

 

$

10,561

 

 

$

10,235