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Income Taxes | 12 Months Ended
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Dec. 31, 2021
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes The following table sets forth the components of the Company's income before income tax (expense) benefit:
| Years Ended December 31,
(in thousands) | 2021 |  | 2020 |  | 2019
United States | $ | 168,965 |  |  | $ | 41,238 |  |  | $ | 53,566 |
Foreign | (34,651) |  |  | — |  |  | — |
Total income before income tax (expense) benefit | $ | 134,314 |  |  | $ | 41,238 |  |  | $ | 53,566 |
The following table sets forth the components of the Company's income tax (expense) benefit:
| Years Ended December 31,
(in thousands) | 2021 |  | 2020 |  | 2019
Current tax (expense): |  |  |  |  |
Federal | $ | (31,690) |  |  | $ | (30,277) |  |  | $ | (37,319) |
State and local | (5,852) |  |  | (7,213) |  |  | (5,861) |
Foreign | (14,494) |  |  | — |  |  | — |
Total current tax (expense) | (52,036) |  |  | (37,490) |  |  | (43,180) |
Deferred tax (expense) benefit: |  |  |  |  |
Federal | (4,378) |  |  | 101,613 |  |  | 32,327 |
State and local | 2,560 |  |  | 43,860 |  |  | (7,209) |
Foreign | 21,117 |  |  | — |  |  | — |
Total deferred tax benefit | 19,299 |  |  | 145,473 |  |  | 25,118 |
Total income tax (expense) benefit | $ | (32,737) |  |  | $ | 107,983 |  |  | $ | (18,062) |
The following table sets forth the principal reasons for the differences between the effective income tax rate and the statutory federal income tax rate for the Company:
| Years Ended December 31,
| 2021 |  | 2020 |  | 2019
Statutory federal tax rate | 21.0 | % |  | 21.0 | % |  | 21.0 | %
Foreign rate differential | (3.6) | % |  | — | % |  | — | %
Impact of non-US taxing jurisdictions, net | 0.8 | % |  | — | % |  | — | %
State and local taxes, net of federal tax benefit | 4.3 | % |  | 7.4 | % |  | 2.7 | %
Change in value of indemnification asset | — | % |  | 2.8 | % |  | 1.6 | %
Non-deductible executive compensation | 1.0 | % |  | 3.5 | % |  | — | %
Stock compensation | (0.5) | % |  | 4.4 | % |  | — | %
Non-deductible transaction costs | 4.2 | % |  | 4.9 | % |  | 0.8 | %
Change in federal and state valuation allowance | (2.3) | % |  | (256.0) | % |  | 1.9 | %
Change in unrecognized tax benefits (including FBOS) | (1.4) | % |  | (48.7) | % |  | 5.3 | %
Other, net | 0.9 | % |  | (1.2) | % |  | 0.4 | %
Effective tax rate | 24.4 | % |  | (261.9) | % |  | 33.7 | %
Deferred Taxes Deferred taxes arise because of differences in the book and tax basis of certain assets and liabilities. A valuation allowance is recognized to reduce gross deferred tax assets to the amount that will more likely than not be realized. The following table sets forth the significant components of the Company's deferred income tax assets and liabilities:
| Years Ended December 31,
(in thousands) | 2021 |  | 2020
Deferred tax assets |  |  |
Allowance for doubtful accounts | $ | 5,099 |  |  | $ | 9,979 |
Deferred and other compensation | 13,956 |  |  | 10,636 |
Capital investments | 3,795 |  |  | 3,790 |
Debt, capitalized fees, and other interest | 329 |  |  | 2,291 |
Pension and other post-employment benefits | 37,569 |  |  | 51,231 |
Operating lease liability | 9,726 |  |  | 7,539 |
Reserve for facility exit costs | 5,070 |  |  | 7,053 |
Net operating loss and credit carryforwards (1) | 26,522 |  |  | 28,611 |
Fixed assets and capitalized software | — |  |  | 420 |
Non-compete and other agreements | 40,335 |  |  | 46,213 |
Goodwill and other intangible assets | — |  |  | 8,335 |
Other, net | 6,435 |  |  | 8,566 |
Total deferred tax assets | $ | 148,836 |  |  | $ | 184,664 |
Valuation allowance | (21,338) |  |  | (24,307) |
Net deferred tax assets | $ | 127,498 |  |  | $ | 160,357 |
Deferred tax liabilities |  |  |
Deferred revenue | $ | (21,033) |  |  | $ | (46,501) |
Goodwill and other intangible assets | (6,764) |  |  | — |
Deferred costs | (2,254) |  |  | (3,003) |
Investment in subsidiaries | (4,828) |  |  | (5,466) |
Operating lease right-of-use assets | (7,572) |  |  | (9,362) |
Fixed assets and capitalized software | (2,466) |  |  | — |
Other, net | (2,814) |  |  | (3,434) |
Total deferred tax (liabilities) | $ | (47,731) |  |  | $ | (67,766) |
Net deferred tax asset | $ | 79,767 |  |  | $ | 92,591 |
(1) At December 31, 2021 and 2020, the Company had net operating loss and credit carryforwards of $26.5 million and $28.6 million, respectively, for state income tax purposes, which will begin to expire in 2023. The Company establishes a valuation allowance to reduce the deferred tax assets when it is more likely than not that some portion or all of the deferred tax assets will not be realized. In evaluating the ability to realize deferred tax assets, the Company considers all available positive and negative evidence, in determining whether, based on the weight of that evidence, a valuation allowance is needed for some or all of the Company's deferred tax assets. In determining the need for a valuation allowance on the Company's deferred tax assets, the Company places greater weight on recent and objectively verifiable current information. The Company has considered taxable income in prior carryback years, future reversals of existing taxable temporary differences, tax planning strategies, and future taxable income in assessing the need for the valuation allowance. If the Company was to determine that it would be able to realize the deferred tax assets in the future in excess of their net recorded amount, the Company would make an adjustment to the valuation allowance, which would reduce the provision for income taxes. As of December 31, 2021, management has determined that it is more likely than not that its deferred taxes will be realized, with the exception of certain indefinite lived deferred tax assets and certain state net operating loss carryforwards of $21.3 million. For the year ended December 31, 2021, the Company recorded a net valuation allowance release of $3.0 million on the basis of management’s reassessment of the amount of its deferred tax assets that are more likely than not to be realized. The following table sets forth changes in the Company’s valuation allowance:
(in thousands) | 2021 |  | 2020
Balance at beginning of period | $ | 24,307 |  |  | $ | 126,321 |
Net change in valuation allowance | (2,969) |  |  | (102,014) |
Balance at end of period | $ | 21,338 |  |  | $ | 24,307 |
Unrecognized Tax Benefits The Company records unrecognized tax benefits for the estimated risk associated with tax positions taken on tax returns. The Company is subject to taxation in the United States and various other state and foreign jurisdictions. The material jurisdictions in which the Company is subject to potential examination include the United States and Australia. Generally, tax years 2018 through 2020 are subject to examination by the Internal Revenue Service and tax years 2017 through 2020 are subject to examination by the Australian Tax Authority. State tax returns are open for examination for an average of three years; however, certain jurisdictions remain open to examination longer than three years due to the existence of net operating loss carryforwards. The Company received IRS FPAA notification letters (Form 1830-C) dated August 29, 2018 for IRS adjustments related to the tax years 2012-2015, for which the Company has previously adequately reserved. See Note 16, Contingent Liabilities. The Company is also currently under California Franchise Tax Board tax examination for tax years 2013 and 2014, Colorado state tax examination for tax years 2017 through 2020, Idaho state tax examination for tax years 2011 through 2018, Kansas state tax examination for tax years 2016 through 2019. The Company does not have any other significant state or local examinations in process. The following table reflects changes to and balances of the Company's unrecognized tax benefits:
(in thousands) | 2021 |  | 2020 |  | 2019
Balance at beginning of period | $ | 23,703 |  |  | $ | 48,305 |  |  | $ | 48,469 |
Gross reductions for tax positions related to prior years | — |  |  | (22,186) |  |  | — |
Gross reductions for tax positions related to the lapse of applicable statute of limitations | (2,869) |  |  | (2,416) |  |  | (164) |
Balance at end of period | $ | 20,834 |  |  | $ | 23,703 |  |  | $ | 48,305 |
For the year ended December 31, 2021, the Company's unrecognized tax benefit decreased by $2.9 million, while for the year ended December 31, 2020, the Company's unrecognized tax benefit decreased by $24.6 million, and for the year ended December 31, 2019, the Company's unrecognized tax benefit decreased by $0.2 million. The decrease for the year ended December 31, 2021 was primarily attributable to the reduction for tax positions related to the lapse of applicable statute of limitations. The decrease for the year ended December 31, 2020 was primarily attributable to a partial release of uncertain tax positions due to favorable developments with ongoing U.S. federal tax examinations. The decrease for the year ended December 31, 2019 was due to the reduction for tax positions related to the lapse of applicable statute of limitations. For the years ended December 31, 2021, 2020 and 2019, the Company had $20.8 million, $23.7 million, and $48.3 million, respectively, of unrecognized tax benefits, excluding interest and penalties, that if recognized, would impact the effective tax rate. The Company recorded adjustments to interest and penalties related to unrecognized tax benefits as part of the provision/(benefit) for income taxes in the Company's consolidated statements of operations and comprehensive income of $1.2 million, $(2.3) million, and $3.7 million for the years ended December 31, 2021, 2020 and 2019, respectively. Unrecognized tax benefits include $9.6 million, $8.4 million, and $10.7 million of accrued interest as of December 31, 2021, 2020, and 2019, respectively. It is reasonably possible that the $20.8 million unrecognized tax benefit liability presented above for the year ended December 31, 2021, could decrease by $20.7 million within the next twelve months, due to an anticipated settlement with the tax authorities and the expiration of the statute of limitations in certain jurisdictions.

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- 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
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