XML 30 R17.htm IDEA: XBRL DOCUMENT
v3.22.0.1

Income Taxes | 12 Months Ended
--- | ---
Dec. 31, 2021
Income Tax Disclosure [Abstract] |
Income Taxes | 10 Income Taxes Income tax data for the years ended December 31, 2021, 2020 and 2019 is as follows (in thousands):
|  | Year Ended December 31, |
|  | 2021 |  |  | 2020 |  |  | 2019 |
The components of income before income taxes are as follows: |  |  |  |  |  |  |  |  |  |  |  |
Domestic |  | $ | 144,410 |  |  | $ | 75,193 |  |  | $ | 97,325 |
Foreign |  |  | 661,783 |  |  |  | 535,721 |  |  |  | 580,914 |
Total |  | $ | 806,193 |  |  | $ | 610,914 |  |  | $ | 678,239 |
|  | Year Ended December 31, |
|  | 2021 |  |  | 2020 |  |  | 2019 |
The components of the income tax provision were as follows: |  |  |  |  |  |  |  |  |  |  |  |
Federal |  | $ | 16,302 |  |  | $ | 28,385 |  |  | $ | 7,009 |
State |  |  | 3,691 |  |  |  | 4,243 |  |  |  | 3,329 |
Foreign |  |  | 76,724 |  |  |  | 59,408 |  |  |  | 66,083 |
Total current tax provision |  | $ | 96,717 |  |  | $ | 92,036 |  |  | $ | 76,421 |
Federal |  | $ | 10,491 |  |  | $ | (8,244 | ) |  | $ | 6,913 |
State |  |  | 345 |  |  |  | (506 | ) |  |  | 1,253 |
Foreign |  |  | 5,797 |  |  |  | 6,057 |  |  |  | 1,454 |
Total deferred tax provision |  |  | 16,633 |  |  |  | (2,693 | ) |  |  | 9,620 |
Total provision |  | $ | 113,350 |  |  | $ | 89,343 |  |  | $ | 86,041 |
The differences between income taxes computed at the United States statutory rate and the provision for income taxes are summarized as follows for the years ended December 31, 2021, 2020 and 2019 (in thousands):
|  | Year Ended December 31, |
|  | 2021 |  |  | 2020 |  |  | 2019 |
Federal tax computed at U.S. statutory income tax rate |  | $ | 169,300 |  |  | $ | 128,292 |  |  | $ | 142,430 |
Foreign currency exchange impact on distributed earnings |  |  | — |  |  |  | — |  |  |  | (3,229 | )
GILTI, net of foreign tax credits |  |  | 10,476 |  |  |  | 13,319 |  |  |  | 10,523 |
State income tax, net of federal income tax benefit |  |  | 4,036 |  |  |  | 2,415 |  |  |  | 3,459 |
Net effect of foreign operations |  |  | (54,566 | ) |  |  | (48,962 | ) |  |  | (52,727 | )
Effect of stock-based compensation |  |  | (6,682 | ) |  |  | (6,798 | ) |  |  | (9,211 | )
Other, net |  |  | (9,214 | ) |  |  | 1,077 |  |  |  | (5,204 | )
Provision for income taxes |  | $ | 113,350 |  |  | $ | 89,343 |  |  | $ | 86,041 |
The Company’s effective tax rates were 14.1%, 14.6% and 12.7% for the years ended December 31, 2021, 2020 and 2019, respectively. The Company’s effective income tax rate differs from the U.S. federal statutory rate each year due to differences in the proportionate amounts of pre-tax income recognized in jurisdictions with different effective tax rates and the items discussed below. The four principal jurisdictions in which the Company manufactures are the U.S., Ireland, the U.K. and Singapore, where the statutory tax rates were 21%, 12.5%, 19% and 17%, respectively, as of December 31, 2021. The Company has a new Development and Expansion Incentive in Singapore that provides a concessionary income tax rate of 5% on certain types of income for the period April 1, 2021 through March 31, 2026. Prior to April 1, 2021, the Company had a tax exemption on income arising from qualifying activities in Singapore, based upon the achievement of certain contractual milestones, which the Company met as of December 31, 2020 and maintained through March 2021. The effect of applying these concessionary income tax rates rather than the statutory tax rate to income arising from qualifying activities in Singapore increased the Company’s net income during the years ended December 31, 2021, 2020 and 2019 by $20 million, $21 million and $24 million, respectively, and increased the Company’s net income per diluted share by $0.32, $0.33 and $0.35, respectively. During 2021, the Company’s effective tax rate differed from the 21% U.S. statutory tax rate primarily due to the jurisdictional mix of earnings, a $10 million provision related to the GILTI tax and a tax benefit of $7 million on stock-based compensation. The 2020 the Company’s effective tax rate differed from the 21% U.S. statutory tax rate primarily due to the jurisdictional mix of earnings, a $13 million provision related to the GILTI tax and a tax benefit of $7 million on stock-based compensation. The 2019 effective tax rate differed from the U.S. federal statutory tax rate primarily due to the jurisdictional mix of earnings, an $11 million provision related to the GILTI tax and a tax benefit of $9 million on stock-based compensation. At the end of 2018, and as a result of the enactment of the 2017 Act, we reevaluated our historic assertion and no longer considered undistributed earnings from foreign subsidiaries to be indefinitely reinvested. The Company recorded a tax provision of $4 million, $3 million and $3 million for 2021, 2020 and 2019, respectively, for future withholding taxes and U.S. state taxes on the repatriation of 2021, 2020 and 2019 undistributed earnings. The tax effects of temporary differences and carryforwards which give rise to deferred tax assets and deferred tax liabilities are summarized as follows (in thousands):
|  | December 31, |
|  | 2021 |  |  | 2020 |
Deferred tax assets: |  |  |  |  |  |  |  |
Net operating losses and credits |  | $ | 55,813 |  |  | $ | 61,962 |
Depreciation |  |  | — |  |  |  | 5,701 |
Operating leases |  |  | 19,288 |  |  |  | 24,317 |
Amortization |  |  | 2,316 |  |  |  | 2,377 |
Stock-based compensation |  |  | 8,074 |  |  |  | 7,773 |
Deferred compensation |  |  | 30,105 |  |  |  | 27,754 |
Deferred revenue |  |  | 10,997 |  |  |  | 11,341 |
Revaluation of equity investments and licenses |  |  | 3,083 |  |  |  | 4,492 |
Inventory |  |  | 5,405 |  |  |  | 5,060 |
Accrued liabilities and reserves |  |  | 6,675 |  |  |  | 10,639 |
Unrealized foreign currency gain/loss |  |  | 2,266 |  |  |  | — |
Other |  |  | 6,713 |  |  |  | 3,483 |
Total deferred tax assets |  |  | 150,735 |  |  |  | 164,899 |
Valuation allowance |  |  | (58,834 | ) |  |  | (60,101 | )
Deferred tax assets, net of valuation allowance |  |  | 91,901 |  |  |  | 104,798 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
Capitalized software |  |  | (24,357 | ) |  |  | (23,748 | )
Operating leases |  |  | (19,251 | ) |  |  | (24,314 | )
Indefinite-lived intangibles |  |  | (15,534 | ) |  |  | (14,973 | )
Unrealized foreign currency gain/loss |  |  | — |  |  |  | (10,819 | )
Depreciation |  |  | (3,481 | ) |  |  | — |
Deferred tax liability on foreign earnings |  |  | (17,283 | ) |  |  | (17,277 | )
Total deferred tax liabilities |  |  | (79,906 | ) |  |  | (91,131 | )
Net deferred tax assets |  | $ | 11,995 |  |  | $ | 13,667 |
The Company has gross foreign net operating losses of $229 million, of which $202 million do not expire under current laws and $27 million start expiring in 2022. As of December 31, 2021, the Company has provided a deferred tax valuation allowance of $59 million, of which $53 million relates to certain foreign net operating losses. The Company’s net deferred tax assets associated with net operating losses and tax credit carryforwards are approximately $3 million as of December 31, 2021, which represent the future tax benefit of foreign net operating loss carryforwards that do not expire under current law. The Company accounts for its uncertain tax return positions in accordance with the accounting standards for income taxes, which require financial statement reporting of the expected future tax consequences of uncertain tax reporting positions on the presumption that all concerned tax authorities possess full knowledge of those tax reporting positions, as well as all of the pertinent facts and circumstances, but prohibit any discounting of unrecognized tax benefits associated with those reporting positions for the time value of money. The Company continues to classify interest and penalties related to unrecognized tax benefits as a component of the provision for income taxes. The following is a summary of the activity of the Company’s gross unrecognized tax benefits, excluding interest and penalties, for the year ended December 31, 2021, 2020 and 2019 (in thousands):
|  | 2021 |  |  | 2020 |  |  | 2019 |
Balance at the beginning of the period |  | $ | 28,666 |  |  | $ | 27,790 |  |  | $ | 26,108 |
Net reductions for settlement of tax audits |  |  | (1,300 | ) |  |  | (399 | ) |  |  | — |
Net reductions for lapse of statutes taken during the period |  |  | (433 | ) |  |  | (684 | ) |  |  | (261 | )
Net additions for tax positions taken during the current period |  |  | 1,759 |  |  |  | 1,959 |  |  |  | 1,943 |
Balance at the end of the period |  | $ | 28,692 |  |  | $ | 28,666 |  |  | $ | 27,790 |
As of 2021, the total amount of gross unrecognized tax benefits was $29 million, all of which, if recognized, would impact the Company’s effective tax rate. With limited exceptions, the Company is no longer subject to tax audit examinations in significant jurisdictions for the years ended on or before December 31, 2016. The Company continuously monitors the lapsing of statutes of limitations on potential tax assessments for related changes in the measurement of unrecognized tax benefits, related net interest and penalties and deferred tax assets and liabilities. As of December 31, 2021, the Company expects to record additional reductions in the measurement of its unrecognized tax benefits and related net interest and penalties of approximately $18 million within the next twelve months due to potential tax audit settlements and the lapsing of statutes of limitations on potential tax assessments. The Company does not expect to record any other material reductions in the measurement of its unrecognized tax benefits within the next twelve months. As of December 31, 2021, the Company is currently under an income tax audit in the U.S. for its 2017 and 2018 tax years. The Company is also subject to various foreign audits and inquiries and we currently do not expect any material adjustments. The following i s a summary of the activity of the Company’s valuation allowance for the years ended December 31, 2021, 2020 and 2019 (in thousands):
|  | Balance at Beginning of Period |  |  | Charged to Provision for Income Taxes* |  |  | Other** |  |  | Balance at End of Period |
Valuation allowance for deferred tax assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
2021 |  | $ | 60,101 |  |  | $ | 2,919 |  |  | $ | (4,186 | ) |  | $ | 58,834 |
2020 |  | $ | 51,221 |  |  | $ | 1,137 |  |  | $ | 7,743 |  |  | $ | 60,101 |
2019 |  | $ | 53,893 |  |  | $ | (1,242 | ) |  | $ | (1,430 | ) |  | $ | 51,221 |
* | These amounts have been recorded as part of the income statement provision for income taxes. The income statement effects of these amounts have largely been offset by amounts related to changes in other deferred tax balance sheet accounts.
** | The change in the valuation allowance during the year ended December 31, 2021 is primarily due to the effect of foreign currency translation on a valuation allowance related to a net operating loss carryforward. The change in the valuation allowance during the year ended December 31, 2020 was primarily due to the effect of foreign currency translation on a valuation allowance related to a net operating loss carryforward and acquired historical net operating losses. The change in the valuation allowance during the year ended December 31, 2019 was primarily due to the effect of foreign currency translation on a valuation allowance related to a net operating loss carryforward.
In March 2020, the U.S. federal government enacted the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”). The CARES Act is an emergency economic stimulus package in response to the COVID-19 outbreak which, among other things, contains numerous income tax provisions. The CARES Act does not have a material impact on the Company’s consolidated financial statements or related disclosures.

X
- References No definition available. + Details
Name: | us-gaap_IncomeTaxDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration