XML 44 R21.htm IDEA: XBRL DOCUMENT
v3.22.4

Income Taxes | 12 Months Ended
--- | ---
Dec. 31, 2022
Income Tax Disclosure [Abstract] |
Income Taxes | INCOME TAXES Components of the provision for income taxes and the income to which it relates for the years ended December 31, 2022, 2021 and 2020 consist of the following (in thousands):
| Year Ended December 31,
| 2022 |  | 2021 |  | 2020
Income before income taxes (1): |  |  |  |  |
Domestic | $ | 253,560 |  |  | $ | 110,535 |  |  | $ | 98,111 |
Foreign | 70,073 |  |  | 55,967 |  |  | 45,588 |
Income before income taxes | $ | 323,633 |  |  | $ | 166,502 |  |  | $ | 143,699 |
Current income taxes: |  |  |  |  |
U.S. Federal | $ | 23,034 |  |  | $ | 14,031 |  |  | $ | 14,951 |
Foreign | 15,444 |  |  | 15,242 |  |  | 9,909 |
U.S. state and local | 3,421 |  |  | 2,045 |  |  | 2,158 |
Current provision for income taxes | 41,899 |  |  | 31,318 |  |  | 27,018 |
Deferred provision (benefit) for income taxes: |  |  |  |  |
U.S. Federal | 26,732 |  |  | 11,008 |  |  | 4,485 |
Foreign | (458) |  |  | (1,542) |  |  | 5,287 |
U.S. state and local | 1,965 |  |  | 809 |  |  | 330 |
Total deferred provision for income taxes | 28,239 |  |  | 10,275 |  |  | 10,102 |
Provision for income taxes | $ | 70,138 |  |  | $ | 41,593 |  |  | $ | 37,120 |
(1)Includes the allocation of certain administrative expenses and intercompany payments, such as royalties and interest, between domestic and foreign subsidiaries. At December 31, 2022, the cumulative amount of undistributed earnings of foreign subsidiaries was $246.1 million. The Tax Cuts and Jobs Act imposed a mandatory transition tax on accumulated foreign earnings and generally eliminated U.S. federal income taxes on dividends from foreign subsidiaries with the exception of foreign withholding taxes and other foreign local tax. During 2022 and 2021, the Company repatriated $47.5 million and $10.0 million, respectively, from certain foreign subsidiaries, which was not subject to withholding or federal income tax. It is the Company’s intent to indefinitely reinvest the remaining undistributed earnings and future earnings of these subsidiaries outside the U.S. and, therefore, deferred taxes are not currently recorded on cumulative foreign currency translation adjustments. The principal deferred tax assets and liabilities consist of the following (in thousands):
| As of December 31,
| 2022 |  | 2021
Deferred tax assets: |  |  |
Property and equipment in foreign jurisdictions | $ | 14,585 |  |  | $ | 11,452 |
Finance receivables | 19,125 |  |  | 7,421 |
Accrued fees on forfeited pawn loans | 8,168 |  |  | 6,645 |
Deferred cost of goods sold deduction | 2,800 |  |  | 1,989 |
Accrued compensation, payroll taxes and employee benefits | 3,699 |  |  | 4,294 |
U.S. state and certain foreign net operating losses | 6,504 |  |  | 6,429 |
Other | 5,167 |  |  | 3,811 |
Total deferred tax assets | 60,048 |  |  | 42,041 |
Deferred tax liabilities: |  |  |
Intangible assets | 150,397 |  |  | 126,283 |
Leased merchandise and property and equipment in domestic jurisdictions | 40,950 |  |  | 24,035 |
Net operating lease asset | 2,646 |  |  | 3,726 |
Other | 3,929 |  |  | 2,052 |
Total deferred tax liabilities | 197,922 |  |  | 156,096 |
Net deferred tax liabilities before valuation allowance | (137,874) |  |  | (114,055) |
Valuation allowance | (6,504) |  |  | (6,429) |
Net deferred tax liabilities | $ | (144,378) |  |  | $ | (120,484) |
Reported as: |  |  |
Deferred tax assets | $ | 7,381 |  |  | $ | 5,614 |
Deferred tax liabilities | (151,759) |  |  | (126,098) |
Net deferred tax liabilities | $ | (144,378) |  |  | $ | (120,484) |
The Company has a valuation allowance of $6.5 million and $6.4 million as of December 31, 2022 and 2021, respectively, related to the deferred tax assets associated with its U.S. state and certain foreign net operating losses. The Company has evaluated the nature and timing of its other deferred tax assets and concluded that no additional valuation allowance is necessary. The following is a reconciliation of income taxes calculated at the U.S. federal statutory rate to the provision for income taxes (dollars in thousands):
| Year Ended December 31,
| 2022 |  | 2021 |  | 2020
U.S. federal statutory rate | 21 | % |  | 21 | % |  | 21 | %
Tax at the U.S. federal statutory rate | $ | 67,963 |  |  | $ | 35,149 |  |  | $ | 30,177 |
U.S. state income tax, net of federal tax benefit of $1,131, $599 and $522, respectively | 4,255 |  |  | 2,255 |  |  | 1,965 |
Benefit from gain on revaluation of contingent acquisition consideration | (4,580) |  |  | — |  |  | — |
Net incremental income tax expense from foreign earnings (1) | 272 |  |  | 2,007 |  |  | 5,732 |
Non-deductible compensation expense | 3,297 |  |  | 1,943 |  |  | 1,050 |
Global intangible low-taxed income tax | — |  |  | — |  |  | (1,863) |
Other taxes and adjustments, net | (1,069) |  |  | 239 |  |  | 59 |
Provision for income taxes | $ | 70,138 |  |  | $ | 41,593 |  |  | $ | 37,120 |
Effective tax rate | 21.7 | % |  | 25.0 | % |  | 25.8 | %
(1)Includes an $8.0 million, $6.3 million and $2.0 million foreign permanent tax benefit related to an inflation index adjustment allowed under Mexico tax law for the years ended December 31, 2022, 2021 and 2020, respectively. The Company’s foreign pawn operating subsidiaries are owned by a wholly-owned subsidiary located in the Netherlands. The foreign pawn operating subsidiaries are subject to their respective foreign statutory rates, which differ from the U.S. federal statutory rate. The statutory tax rates in Mexico, Guatemala, Colombia and El Salvador are 30%, 25%, 35% and 30%, respectively. The statutory tax rate in the Netherlands is 0% on eligible dividends received from its foreign subsidiaries. The Company reviews the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. The Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. Interest and penalties related to income tax liabilities that could arise would be classified as interest expense in the Company’s consolidated statements of income. As of December 31, 2022 and 2021, the Company had no unrecognized tax benefits and, therefore, the Company did not have a liability for accrued interest and penalties and no such interest or penalties were incurred for the years ended December 31, 2022, 2021 and 2020. The Company files federal income tax returns in the U.S., Mexico, Guatemala, Colombia, El Salvador, Jamaica, Puerto Rico and the Netherlands, as well as multiple state and local income tax returns in the U.S. The Company’s U.S. federal returns are not subject to examination for tax years prior to 2019. The majority of the Company’s U.S. state income tax returns are not subject to examination for the tax years prior to 2019. With respect to federal tax returns in Mexico, Guatemala, Colombia, El Salvador, Jamaica, Puerto Rico and the Netherlands, the tax years prior to 2017 are closed to examination. There are no state income taxes in Mexico, Guatemala, Colombia, El Salvador, Jamaica, Puerto Rico or the Netherlands.

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 https://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 https://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 https://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 https://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 https://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 https://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 https://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 https://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 https://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