Annual report pursuant to Section 13 and 15(d)

INCOME TAXES (Tables)

v3.20.4
INCOME TAXES (Tables)
12 Months Ended
Dec. 31, 2020
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,

 

 

 

2018

 

 

2019

 

 

2020

 

Income (loss) before income taxes:

 

 

 

 

 

 

 

 

 

 

 

 

U.S.

 

$

289,727

 

 

$

235,571

 

 

$

(784,167

)

Foreign

 

 

21,007

 

 

 

38,189

 

 

 

(143,157

)

Total

 

$

310,734

 

 

$

273,760

 

 

$

(927,324

)

Current and Deferred Income Taxes

Current and deferred income taxes were as follows:

 

 

 

Year Ended December 31,

 

 

 

2018

 

 

2019

 

 

2020

 

Current:

 

 

 

 

 

 

 

 

 

 

 

 

Federal

 

$

46,826

 

 

$

45,247

 

 

$

(271,162

)

Foreign

 

 

11,822

 

 

 

24,022

 

 

 

397

 

State

 

 

13,594

 

 

 

12,486

 

 

 

289

 

Total current expense

 

$

72,242

 

 

$

81,755

 

 

$

(270,476

)

Deferred:

 

 

 

 

 

 

 

 

 

 

 

 

Federal

 

$

27,055

 

 

$

(298

)

 

$

(50,445

)

Foreign

 

 

(6,166

)

 

 

5

 

 

 

13,266

 

State

 

 

2,298

 

 

 

(1,550

)

 

 

(1,721

)

Total deferred taxes

 

$

23,187

 

 

$

(1,843

)

 

$

(38,900

)

Income taxes

 

$

95,429

 

 

$

79,912

 

 

$

(309,376

)

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,

 

 

 

2018

 

 

2019

 

 

2020

 

Computed statutory tax expense

 

$

65,254

 

 

$

57,490

 

 

$

(194,739

)

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

 

 

12,611

 

 

 

8,479

 

 

 

(1,153

)

Changes in valuation allowance

 

131

 

 

 

2,532

 

 

 

46,731

 

Foreign tax rate differential

 

 

2,235

 

 

 

4,646

 

 

 

(6,633

)

Foreign dividends

 

 

 

 

 

 

Foreign tax credits

 

 

3,927

 

 

 

4,143

 

 

 

Impacts related to 2017 Tax Act (1)

 

 

19,180

 

 

 

 

 

Impacts related to COVID-19 pandemic (2)

 

 

 

 

 

 

(187,515

)

Changes in uncertain tax positions

 

 

(6,139

)

 

 

197

 

 

 

24,879

 

Other, net

 

 

(1,770

)

 

 

2,425

 

 

 

9,054

 

Income taxes

 

$

95,429

 

 

$

79,912

 

 

$

(309,376

)

 

(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, 2020 includes benefits of a rate differential on earnings of $122,975, tax losses with respect to investments in foreign subsidiaries and a write down of certain intercompany receivables associated with the Company’s foreign subsidiaries of $135,599, offset by a tax charge for the remeasurement of deferred taxes and tax attributes of  $49,866 and dislodged foreign tax credits not benefited of $21,193.

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 the periods presented consisted of the following:

 

 

 

December 31,

 

 

 

2019

 

 

2020

 

Deferred liabilities:

 

 

 

 

 

 

 

 

Theatre properties and equipment

 

$

138,382

 

 

$

142,253

 

Operating lease right-of-use assets

 

 

322,750

 

 

 

297,452

 

Intangible  asset — other

 

 

39,282

 

 

 

41,297

 

Intangible  asset — tradenames

 

 

72,821

 

 

 

72,268

 

Investment in partnerships

 

 

62,914

 

 

 

20,402

 

Total deferred liabilities

 

 

636,149

 

 

 

573,672

 

Deferred assets:

 

 

 

 

 

 

 

 

Deferred revenue - NCM

 

 

85,362

 

 

 

83,998

 

Deferred revenue - Other

 

 

9,953

 

 

 

6,208

 

Prepaid rent

 

 

5,672

 

 

 

5,255

 

Gift Cards

 

 

7,402

 

 

 

9,265

 

Operating lease obligations

 

 

336,034

 

 

 

313,552

 

Finance lease obligations

 

 

34,956

 

 

 

31,284

 

Tax impact of items in accumulated other comprehensive income and additional paid-in-capital

 

 

5,131

 

 

 

19,475

 

Other tax loss carryforwards

 

 

17,053

 

 

 

89,320

 

Other tax credit and attribute carryforwards

 

 

46,577

 

 

 

121,698

 

Other expenses, not currently deductible for tax purposes

 

 

15,901

 

 

 

17,698

 

Total deferred assets

 

 

564,041

 

 

 

697,753

 

Net deferred income tax (asset) liability before valuation allowance

 

 

72,108

 

 

 

(124,081

)

Valuation allowance against deferred assets – non-current

 

 

60,359

 

 

 

203,606

 

Net deferred income tax liability

 

$

132,467

 

 

$

79,525

 

Net deferred tax (asset) liability — Foreign

 

$

(4,539

)

 

$

7,280

 

Net deferred tax liability — U.S.

 

 

137,006

 

 

 

72,245

 

Total

 

$

132,467

 

 

$

79,525

 

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 periods presented:

 

 

 

Year Ended December 31,

 

 

 

2018

 

 

2019

 

 

2020

 

Balance at January 1,

 

$

18,266

 

 

$

10,561

 

 

$

10,235

 

Gross increases - tax positions in prior periods

 

 

 

 

1

 

 

 

32,417

 

Gross decreases - tax positions in prior periods

 

 

(143

)

 

 

 

 

 

(88

)

Gross increases - current period tax positions

 

 

424

 

 

 

202

 

 

 

4,010

 

Settlements

 

 

(7,191

)

 

 

(522

)

 

 

 

Foreign currency translation adjustments

 

 

(795

)

 

 

(7

)

 

 

(46

)

Balance at December 31,

 

$

10,561

 

 

$

10,235

 

 

$

46,528