XML 91 R20.htm IDEA: XBRL DOCUMENT
v3.19.3.a.u2

Income Taxes | 12 Months Ended
--- | ---
Dec. 31, 2019
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes The federal and state and foreign income tax provision is summarized as follows:
Year Ended December 31, |  | 2019 |  | 2018 |  | 2017
Current |  |  |  |  |  |
Federal |  | $ | 100,986 |  |  | $ | 82,493 |  |  | $ | 154,776 |
State |  | 19,902 |  |  | 13,709 |  |  | 11,645 |
Foreign |  | 11,722 |  |  | 8,405 |  |  | 8,002 |
|  | 132,610 |  |  | 104,607 |  |  | 174,423 |
Deferred |  |  |  |  |  |
Federal |  | (1,635 | ) |  | 2,550 |  |  | (26,350 | )
State |  | (960 | ) |  | 1,166 |  |  | 1,378 |
Foreign |  | — |  |  | 15 |  |  | 3,199 |
|  | (2,595 | ) |  | 3,731 |  |  | (21,773 | )
Total income taxes |  | $ | 130,015 |  |  | $ | 108,338 |  |  | $ | 152,650 |
Annual tax provisions include amounts considered sufficient to pay assessments that may result from examination of prior year tax returns; however, the amount ultimately paid upon resolution of issues raised may differ materially from the amount accrued. The examination and the resolution process may last longer than one year. The components of Income before income taxes are summarized as follows:
Year Ended December 31, |  | 2019 |  | 2018 |  | 2017
Domestic |  | $ | 565,842 |  |  | $ | 579,622 |  |  | $ | 523,044 |
Foreign |  | 65,599 |  |  | 34,584 |  |  | 33,995 |
|  | $ | 631,441 |  |  | $ | 614,206 |  |  | $ | 557,039 |
The Company's foreign income is primarily earned in Canada, the Republic of Ireland and the United Kingdom. The increase in the Company's foreign income during 2019 is primarily due to the increase of income from certain foreign subsidiaries subject to tax in non-U.S. jurisdictions. The effective income tax rate differs from the federal income tax statutory rate due to the following:
Year Ended December 31, | 2019 |  | 2018 |  | 2017
Statutory rate | 21.0 | % |  | 21.0 | % |  | 35.0 | %
State taxes, net of federal tax benefit | 2.4 |  |  | 1.9 |  |  | 1.3 |
Foreign tax expense and tax rate differential | — |  |  | (0.1 | ) |  | (1.1 | )
Tax benefit from stock option exercises | (1.9 | ) |  | (3.8 | ) |  | (3.9 | )
Enactment of the Tax Cuts and Jobs Act: |  |  |  |  |
Re-measurement of deferred taxes | — |  |  | — |  |  | (4.9 | )
One-time transition tax on repatriation of foreign earnings and withholding tax | — |  |  | (0.1 | ) |  | 2.6 |
Research and development tax credit | (1.1 | ) |  | (0.8 | ) |  | (0.9 | )
Domestic Production Activities Deduction | — |  |  | — |  |  | (0.5 | )
Foreign-Derived Intangible Income Deduction (FDII) | (0.2 | ) |  | (0.2 | ) |  | — |
Other, net | 0.4 |  |  | (0.3 | ) |  | (0.2 | )
| 20.6 | % |  | 17.6 | % |  | 27.4 | %
The increase in the Company's effective tax rate in 2019 was primarily due to reduced tax benefits related to the lower volume of stock option exercises as compared to 2018 and an increase in the Company's state effective tax rate. The Company's effective income tax rate in 2018 included the 21.0 percent corporate tax rate under the Tax Cut and Jobs Act (the Tax Act). The Tax Act also provided for a Foreign-Derived Intangible Income (FDII) deduction. For 2019 and 2018, the Company estimated a federal FDII deduction benefit of $1,315 and $1,206, respectively. The Tax Act also repealed the Section 199 deduction for businesses that perform domestic manufacturing and certain other production activities which had an favorable impact on the Company's tax rate in 2017. The impact to the Company's effective tax rate in 2017 from the Tax Act was a combination of a $27,153 tax benefit from the re-measurement of the Company's estimated net deferred tax liability as of December 31, 2017 based upon the 21.0 percent corporate tax rate offset by expense of $14,743 from the preliminary estimate of the one-time transition tax relating to the impact of the deemed repatriation and withholding tax of the Company's previously undistributed foreign earnings. The net impact to the Company's tax rate in 2017 from the Tax Act was a net tax benefit of $12,410, or $0.08 diluted earnings per share. The favorable impact to the Company's effective income tax rate in 2018 from the Tax Act related to the finalization of the estimated one-time transition tax. The Tax Act also imposed a territorial rather than worldwide system which requires a one-time transition tax on the repatriation of previously deferred foreign earnings. As of December 31, 2019, the remaining amount payable related to the transition tax of $803 is included in Long-term income taxes payable on the accompanying Consolidated Balance Sheet. Deferred income taxes for 2019 and 2018 reflect the impact of temporary differences between the amount of assets and liabilities for financial reporting purposes and such amounts as measured by tax laws and regulations. Significant components of our deferred tax assets and liabilities at December 31, 2019 and 2018 are as follows:
|  | 2019 |  | 2018
Deferred Tax Assets: |  |  |  |
Stock-based compensation expense |  | $ | 24,686 |  |  | $ | 24,125 |
State net operating loss carryforward |  | 67,472 |  |  | 67,825 |
Foreign net operating loss carryforward and other |  | 6,081 |  |  | 6,533 |
Basis differences in investments |  | 4,436 |  |  | 4,118 |
Federal benefit of state tax deduction for uncertain tax positions |  | 2,124 |  |  | 1,882 |
Revenue and expense recognized in different periods for financial reporting and income tax purposes |  | 1,960 |  |  | 1,657 |
Other assets |  | 1,271 |  |  | 1,049 |
Total deferred income tax assets |  | 108,030 |  |  | 107,189 |
Less: State net operating loss valuation allowance |  | (64,737 | ) |  | (65,870 | )
Less: Foreign net operating loss valuation allowance |  | (5,994 | ) |  | (6,446 | )
Net deferred income tax assets |  | $ | 37,299 |  |  | $ | 34,873 |
Deferred Tax Liabilities: |  |  |  |
Capitalized software currently deductible for tax purposes, net of amortization |  | $ | (68,265 | ) |  | $ | (71,067 | )
Difference in financial reporting and income tax depreciation methods |  | (6,032 | ) |  | (6,545 | )
Difference between book and tax basis of other assets |  | (4,593 | ) |  | (4,429 | )
Goodwill and other intangibles |  | (2,170 | ) |  | (1,823 | )
Foreign dividend withholding tax |  | (312 | ) |  | (312 | )
Capitalized contract costs |  | (7,072 | ) |  | (5,490 | )
Other liabilities |  | (1,755 | ) |  | (960 | )
Total deferred income tax liabilities |  | $ | (90,199 | ) |  | $ | (90,626 | )
Net deferred income tax liabilities |  | $ | (52,900 | ) |  | $ | (55,753 | )
The valuation allowances against deferred tax assets at December 31, 2019 and 2018 are related to state net operating losses from certain domestic subsidiaries, foreign net operating losses from certain foreign subsidiaries and the restriction of the use of the foreign tax credit placed by the Tax Act. Certain state and foreign tax statutes significantly limit the utilization of net operating losses for domestic and foreign subsidiaries. Furthermore, these net operating losses cannot be used to offset the net income of other subsidiaries. The Company recognizes uncertain tax positions in accordance with the applicable accounting guidance and adjusts these liabilities when management’s judgment changes as a result of the evaluation of new information not previously available. Due to the complexity of some of these uncertainties, the ultimate resolution may result in a payment that is materially different from the Company's current estimate of the tax liabilities. The Company’s total unrecognized tax benefit, including interest and penalties, as of December 31, 2019 was $17,318, of which $15,194 would affect the effective tax rate if the Company were to recognize the tax benefit. The gross amount of uncertain tax liability of $4,896 is expected to be paid within one year is netted against the current payable account while the remaining amount of $12,422 is included in Other long-term liabilities on the accompanying Consolidated Balance Sheet. During the year ended December 31, 2019, the Company recognized $3,435 of previously unrecognized tax benefits relating to the lapse of the statute of limitation. The Company files a consolidated federal income tax return and separate income tax returns with various states. Certain subsidiaries of the Company file tax returns in foreign jurisdictions. The Company is no longer subject to U.S. federal income tax examination for years before 2016 and is no longer subject to state, local or foreign income tax examinations by authorities for years before 2015. A reconciliation of the beginning and ending amount of unrecognized tax benefit is as follows:
|  | 2019 |  | 2018 |  | 2017
Balance as of January 1 |  | $ | 14,367 |  |  | $ | 14,480 |  |  | $ | 17,287 |
Tax positions related to current year: |  |  |  |  |  |
Gross additions |  | 3,054 |  |  | 2,446 |  |  | 3,180 |
Tax positions related to prior years: |  |  |  |  |  |
Gross additions |  | 1,465 |  |  | 340 |  |  | 211 |
Settlements |  | (145 | ) |  | (278 | ) |  | (352 | )
Lapses on statute of limitations |  | (3,385 | ) |  | (2,621 | ) |  | (5,846 | )
Balance as of December 31 |  | $ | 15,356 |  |  | $ | 14,367 |  |  | $ | 14,480 |
The above reconciliation of the gross unrecognized tax benefit will differ from the amount which would affect the effective tax rate because of the recognition of the federal and state tax benefits and interest and penalties. The Company classifies all interest and penalties as income tax expense. The Company has recorded $1,962, $1,289 and $1,175 in liabilities for tax-related interest and penalties in 2019, 2018 and 2017, respectively. The Company estimates it will recognize $4,896 of unrecognized tax benefits within the next twelve months due to lapses on the statute of limitation. The Company includes its direct and indirect subsidiaries in its U.S. consolidated federal income tax return. The Company’s tax sharing allocation agreement provides that any subsidiary having taxable income will pay a tax liability equivalent to what that subsidiary would have paid if it filed a separate income tax return. If the separately calculated federal income tax provision for any subsidiary results in a tax loss, the current benefit resulting from such loss, to the extent utilizable on a separate return basis, is accrued and paid to that subsidiary.

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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration