XML 60 R30.htm IDEA: XBRL DOCUMENT v3.22.0.1

INCOME TAXES

12 Months Ended

Dec. 31, 2021

INCOME TAXES

INCOME TAXES

21.  INCOME TAXES

Net deferred tax assets and liabilities consist of the following as of December 31, 2021 and 2020 (in millions):

​	​	​	​	​	​	​	​
​		As of December 31,
​	​	2021			2020		​
Deferred tax assets:	​	​	​	​	​	​	​
Accrued compensation and benefits	​	$	14.7	​	$	11.4	​
Property, equipment and technology, net	​		2.8	​		2.4	​
Operating leases	​	​	33.5	​	​	36.2	​
Other	​		54.4	​		39.3	​
Subtotal	​	​	105.4	​	​	89.3	​
Valuation allowance	​	​	(12.2)	​	​	(6.8)	​
Total deferred tax assets	​		93.2	​		82.5	​
Deferred tax liabilities:	​		​	​		​	​
Intangibles	​	​	(372.4)	​		(351.1)	​
Property, equipment and technology, net	​	​	(19.8)	​		(21.8)	​
Investments	​	​	(44.3)	​		(56.6)	​
Prepaid expenses or assets	​	​	(4.7)	​	​	(2.8)	​
Operating leases	​	​	(24.7)	​	​	(27.8)	​
Total deferred tax liabilities	​		(465.9)	​		(460.1)	​
Net deferred tax liabilities	​	$	(372.7)	​	$	(377.6)	​

​

The Company provides a valuation allowance against deferred tax assets if, based on management’s assessment of historical and projected future operating results and other available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. A valuation allowance of $12.2 million and $6.8 million was recorded against gross deferred tax assets for certain investments, net operating and capital losses as of December 31, 2021 and 2020, respectively.

As of December 31, 2021, the Company has capital loss carryforwards of $10.6 million, which, if unused, will expire in 2024.

The Company considers its non-U.S. earnings to be indefinitely reinvested outside of the U.S. to the extent these earnings are not subject to U.S. income tax under an anti-deferral tax regime. As of December 31, 2021, the cumulative amount of undistributed earnings in these subsidiaries is $53.0 million. Given our intent to reinvest these earnings for an indefinite period of time, we have not accrued a deferred tax liability on these earnings. A determination of an unrecognized deferred tax liability related to these earnings is not practicable.

The provision for income taxes for the years ended December 31, 2021, 2020 and 2019 consists of the following (in millions):

​	​	​	​	​	​	​	​	​	​	​
​	​	Year Ended December 31,								​
​		2021			2020			2019
Current tax expense:	​	​	​	​	​	​	​	​	​	​
Federal	​	$	148.4	​	$	143.7	​	$	98.7	​
State	​		83.4	​		70.5	​		61.2	​
Foreign	​		14.2	​		8.9	​		7.9	​
Total current tax expense	​		246.0	​		223.1	​		167.8	​
Deferred income tax expense/(benefit):	​	​	​	​	​	​	​	​	​	​
Federal	​	​	(24.3)	​	​	(25.2)	​	​	(28.7)	​
State	​	​	(7.3)	​	​	(9.1)	​	​	(3.8)	​
Foreign	​		12.7	​		3.4	​		(4.7)	​
Total deferred income tax benefit	​		(18.9)	​		(30.9)	​		(37.2)	​
Total	​	$	227.1	​	$	192.2	​	$	130.6	​

​

For the years ended December 31, 2021, 2020, and 2019, income before taxes consists of the following (in millions):

​	​	​	​	​	​	​	​	​	​	​
​		Year Ended December 31,
​	​	2021			2020			2019		​
U.S. operations	​	$	714.0	​	$	601.9	​	$	480.0	​
Foreign operations	​		42.1	​		58.5	​		21.4	​
Total	​	$	756.1	​	$	660.4	​	$	501.4	​

​

A reconciliation of the statutory federal income tax rate to the effective income tax rate for the years ended December 31, 2021, 2020, and 2019 is as follows:

​	​	​	​	​	​	​	​	​	​	​
​	​	Year Ended December 31,								​
​	​	2021			2020			2019		​
Statutory U.S. federal income tax rate	​	21.0	%	​	21.0	%	​	21.0	%	​
Impact of federal, state and local tax law & rate changes, net	​	1.9	%	​	(0.2)	%	​	—	%	​
State taxes, net of federal benefit	​	4.3	%	​	4.2	%	​	5.0	%	​
Uncertain tax positions	​	3.2	%	​	2.9	%	​	2.6	%	​
Deduction for Foreign-Derived Intangible Income	​	(0.6)	%	​	(1.1)	%	​	(1.2)	%	​
Valuation allowance	​	—	%	​	0.8	%	​	—	%	​
Other, net		0.2	%	​	1.5	%	​	(1.4)	%	​
Effective income tax rate		30.0	%	​	29.1	%	​	26.0	%	​

​

A reconciliation of the beginning and ending uncertain tax positions, excluding interest and penalties, is as follows (in millions):

​	​	​	​	​	​	​	​	​	​	​
​	​	2021			2020			2019		​
Balance as of January 1	​	$	138.6	​	$	116.7	​	$	102.3	​
Gross increases on tax positions in prior period	​	​	3.4	​	​	3.3	​	​	3.1	​
Gross decreases on tax positions in prior period	​	​	(0.2)	​	​	—	​	​	(6.3)	​
Gross increases on tax positions in current period	​	​	26.5	​	​	24.3	​	​	18.5	​
Lapse of statute of limitations	​	​	(6.2)	​	​	(5.7)	​	​	(0.9)	​
Balance as of December 31		$	162.1	​	$	138.6	​	$	116.7	​

​

As of December 31, 2021, 2020 and 2019, the Company had $162.1 million, $137.4 million, and $114.9 million, respectively, of uncertain tax positions, net of federal benefit, which, if recognized in the future, would affect the effective income tax rate. Reductions to uncertain tax positions from the lapse of the applicable statutes of limitations and potential audit settlements during the next twelve months are estimated to be approximately $1.0 million.

Estimated interest costs and penalties are classified as part of the provision for income taxes in the Company's consolidated statements of income and were $9.7 million, $6.9 million, and $6.6 million, for the periods ended December 31, 2021, 2020 and 2019, respectively. Accrued interest and penalties were $35.8 million, $26.1 million and $19.2 million as of December 31, 2021, 2020 and 2019, respectively.

The following table summarizes the tax years that are either currently under audit or remain open and subject to examination by the tax authorities in the most significant jurisdictions in which Cboe operates:

​

​	​	​
U.S. Federal		2008-2016, 2018-2021
California	​	2015-2021
Illinois		2018-2021
New York		2015-2021
New York City	​	2011-2021
United Kingdom		2018-2021
Netherlands		2015-2021

​

The Company petitioned the U.S. Tax Court on January 13, 2017, May 7, 2018 and November 29, 2018 for a redetermination of IRS notices of deficiency for Cboe and certain of its subsidiaries for tax years 2011 through 2015 related to its Section 199 claims. These petitions resulted in the establishment of three cases before the U.S. Tax Court. The Company also filed a complaint on October 5, 2018 with the Court of Federal Claims for a refund of Section 199 claims related to tax years 2008 through 2010. The complaint resulted in the establishment of a single case before the Court of Federal Claims.

The first case that went to trial involved certain subsidiaries related to electronic trading for tax years 2011, 2012 and 2013. The U.S. Tax Court held the trial remotely from May 24, 2021 to June 1, 2021. Post-trial briefing in that case concluded on October 28, 2021. On July 9, 2021, the Company sought a stay in the second U.S. Tax Court case involving certain subsidiaries related to hybrid trading for the same tax years, which was denied on August 8, 2021. As a result, two cases remain pending in U.S. Tax Court, as does the case pending before the Court of Federal Claims. Trial dates in those cases have not been established.

Although there can be no assurances, the Company continues to believe, based on its current assessment of the Section 199 claims, that the reasonably expected aggregate amount of any additional liabilities that may result from these cases, if any, will not have a material adverse effect on the financial position, results of operations, or cash flows of the Company. As of December 31, 2021, the Company has not resolved these matters, and proceedings continue in U.S. Tax Court and the Court of Federal Claims.

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