Income Taxes (Tables)

12 Months Ended

Dec. 31, 2017

Schedule of Components of Income Tax Expense (Benefit)

Components of the provision for income taxes and the income to which it relates for the years ended December 31, 2017, 2016 and 2015 consist of the following (in thousands):



	Year Ended December 31,
	2017			2016			2015
Income before income taxes ⁽¹⁾:
Domestic	$	93,365		$	30,804		$	27,599
Foreign	78,947			62,643			60,082
Income before income taxes	$	172,312		$	93,447		$	87,681

Current income taxes:
Federal⁽²⁾	$	15,995		$	1,419		$	7,933
Foreign	23,340			18,787			18,763
State and local	968			1,139			705
Current provision for income taxes	40,303			21,345			27,401

Deferred provision (benefit) for income taxes:
Federal ⁽³⁾	(11,509		)	11,826			931
Foreign	(1,079		)	(528		)	(1,414		)
State and local	705			677			53
Total deferred provision (benefit) for income taxes	(11,883		)	11,975			(430		)

Provision for income taxes	$	28,420		$	33,320		$	26,971


⁽¹⁾	Includes the allocation of certain administrative expenses and the payment of royalties between domestic and foreign subsidiaries.


⁽²⁾	The year ended December 31, 2017 includes an estimated $1.9 million income tax expense relating to the one-time mandatory tax on previously deferred earnings of the Company’s foreign subsidiaries as a result of the Tax Act.


⁽³⁾	The year ended December 31, 2017 includes an estimated $29.2 million income tax benefit resulting from the remeasurement of the Company’s domestic net deferred tax liabilities based on the new lower corporate income tax rate as a result of the Tax Act.

Schedule of Deferred Tax Assets and Liabilities

The principal deferred tax assets and liabilities consist of the following at December 31, 2017 and 2016 (in thousands):



	December 31,
	2017			2016
Deferred tax assets:
Property and equipment in foreign jurisdictions	$	6,752		$	5,604
Accrued fees on forfeited pawn loans	7,002			8,221
Deferred cost of goods sold deduction	2,058			1,674
Cash America nonqualified savings plan (see Note 15)	—			4,685
Accrued compensation and employee benefits	1,749			3,626
Accrued Merger severance and retention	—			2,718
State net operating losses ⁽¹⁾	6,219			—
Other	5,459			8,024
Total deferred tax assets	29,239			34,552

Deferred tax liabilities:
Intangible assets	55,121			75,998
Property and equipment in domestic jurisdictions	1,054			7,716
Other	2,645			2,406
Total deferred tax liabilities	58,820			86,120

Net deferred tax liabilities before valuation allowance	(29,581		)	(51,568		)
Valuation allowance ⁽¹⁾	(6,219		)	—
Net deferred tax liabilities	$	(35,800	)	$	(51,568	)

Reported as:
Deferred tax assets	$	11,237		$	9,707
Deferred tax liabilities	(47,037		)	(61,275		)
Net deferred tax liabilities	$	(35,800	)	$	(51,568	)

Schedule of Effective Income Tax Rate Reconciliation

The effective rate on net income differs from the U.S. federal statutory rate of 35%. The following is a reconciliation of such differences (dollars in thousands):



	Year Ended December 31,
	2017			2016			2015
Tax at the U.S. federal statutory rate	$	60,309		$	32,706		$	30,688
State income taxes, net of federal tax benefit of $586, $636 and $265, respectively	1,087			1,181			493
Rate benefit from foreign earnings ⁽¹⁾	(5,442		)	(3,642		)	(3,531		)
Net tax benefit resulting from the enactment of the Tax Act	(27,269		)	—			—
Nondeductible transaction related costs	—			2,659			—
Other taxes and adjustments, net	(265		)	416			(679		)
Provision for income taxes	$	28,420		$	33,320		$	26,971
Effective tax rate	16.5		%	35.7		%	30.8		%