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INCOME TAXES (Tables) | 12 Months Ended
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Dec. 31, 2019
INCOME TAXES [ABSTRACT] |
Sources of Pre-Tax Accounting Income | The sources of pre-tax operating income are as follows (in thousands):
|  | Year Ended December 31, |
|  | 2019 |  | 2018 |  | 2017 |
Domestic |  | $ | 39,864 |  | $ | (13,926) |  | $ | 10,909 |
Foreign |  |  | 70,547 |  |  | 70,164 |  |  | 77,978 |
Total |  | $ | 110,411 |  | $ | 56,238 |  | $ | 88,887 |
Components of Income Tax Expense (Benefit) | The components of the Company’s Provision for (benefit from) income taxes are as follows (in thousands):
|  | Year Ended December 31, |
|  | 2019 |  | 2018 |  | 2017 |
Current provision for (benefit from) |  |  |  |  |  |  |  |  |  |
Federal |  | $ | 5,289 |  | $ | 2,771 |  | $ | 48,556 |
State |  |  | 2,826 |  |  | 2,754 |  |  | 99 |
Foreign |  |  | 18,938 |  |  | 18,933 |  |  | 12,643 |
Total current provision for (benefit from) |  |  | 27,053 |  |  | 24,458 |  |  | 61,298 |
Deferred provision for (benefit from) |  |  |  |  |  |  |  |  |  |
Federal |  |  | 2,515 |  |  | (943) |  |  | 14,441 |
State |  |  | 118 |  |  | (138) |  |  | 707 |
Foreign |  |  | (4,009) |  |  | (6,894) |  |  | 1,629 |
Total deferred provision for (benefit from) |  |  | (1,376) |  |  | (7,975) |  |  | 16,777 |
Total provision for (benefit from) income taxes |  | $ | 25,677 |  | $ | 16,483 |  | $ | 78,075 |
Effective Income Tax Rate Reconciliation Table | The following reconciles the Company’s effective tax rate to the federal statutory rate (in thousands):
|  | Year Ended December 31, |
|  | 2019 |  | 2018 |  | 2017 |
Income tax per U.S. federal statutory rate (21%, 21%, 35%) |  | $ | 23,186 |  | $ | 11,810 |  | $ | 31,110 |
State income taxes, net of federal deduction |  |  | 3,144 |  |  | 2,003 |  |  | 460 |
Change in valuation allowances |  |  | 9,832 |  |  | 2,191 |  |  | (924) |
Foreign income taxes at different rates than the U.S. |  |  | (3,356) |  |  | (3,758) |  |  | (14,417) |
Foreign withholding taxes |  |  | 600 |  |  | 785 |  |  | 323 |
Losses in international markets without tax benefits |  |  | (2,651) |  |  | (68) |  |  | 1,098 |
Nondeductible compensation under Section 162(m) |  |  | 668 |  |  | 615 |  |  | 647 |
Liabilities for uncertain tax positions |  |  | 661 |  |  | 1,105 |  |  | 1,607 |
Permanent difference related to foreign exchange gains |  |  | 36 |  |  | 136 |  |  | 142 |
(Income) losses of foreign branch operations |  |  | 55 |  |  | 475 |  |  | (824) |
Non-taxable earnings of noncontrolling interest |  |  | (1,294) |  |  | (594) |  |  | (1,030) |
Foreign dividend less foreign tax credits |  |  | (1,681) |  |  | (1,748) |  |  | (4,798) |
Decrease (increase) to deferred tax asset - change in tax rate |  |  | (2,848) |  |  | (1,944) |  |  | 1,101 |
State income tax credits |  |  | (1,176) |  |  | 19 |  |  | 207 |
Foreign earnings taxed currently in U.S. |  |  | 2,172 |  |  | 3,976 |  |  | 3,143 |
Taxes related to prior year filings |  |  | (1,643) |  |  | (1,659) |  |  | (865) |
Taxes related to acquisition accounting |  |  | 978 |  |  | 2,110 |  |  | — |
Transition tax |  |  | — |  |  | — |  |  | 61,569 |
Other |  |  | (1,006) |  |  | 1,029 |  |  | (474) |
Income tax per effective tax rate |  | $ | 25,677 |  | $ | 16,483 |  | $ | 78,075 |
Effective tax rate percentage |  |  | 23.30% |  |  | 29.30% |  |  | 87.80% |
Schedule of Deferred Tax Assets and Liabilities | The Company’s deferred income tax assets and liabilities are summarized as follows (in thousands):
|  | Year Ended December 31, |
|  | 2019 |  | 2018 |
Deferred tax assets, gross |  |  |  |  |  |  |
Accrued workers compensation, deferred compensation and employee benefits |  | $ | 7,999 |  | $ | 8,724 |
Allowance for doubtful accounts, insurance and other accruals |  |  | 3,393 |  |  | 3,301 |
Amortization of deferred lease liabilities |  |  | 25,757 |  |  | 2,614 |
Net operating losses |  |  | 19,222 |  |  | 18,475 |
Equity compensation |  |  | 1,442 |  |  | 1,348 |
Customer acquisition and deferred revenue accruals |  |  | 9,047 |  |  | 13,894 |
Federal and state tax credits, net |  |  | 1,263 |  |  | 549 |
Unrealized losses on derivatives |  |  | 1,421 |  |  | 2,035 |
Impairment of equity investment |  |  | 4,142 |  |  | 4,221 |
Partnership Investment |  |  | 2,435 |  |  | — |
Other |  |  | 1,322 |  |  | 1,001 |
Total deferred tax assets, gross |  |  | 77,443 |  |  | 56,162 |
Valuation allowances |  |  | (17,051) |  |  | (10,867) |
Total deferred tax assets, net |  |  | 60,392 |  |  | 45,295 |
Deferred tax liabilities |  |  |  |  |  |  |
Depreciation and amortization |  |  | (6,095) |  |  | (15,547) |
Unrealized gain on derivatives |  |  | (1,491) |  |  | — |
Contract acquisition costs |  |  | (5,740) |  |  | (8,519) |
Intangible assets |  |  | (22,585) |  |  | (15,890) |
Operating lease assets |  |  | (21,413) |  |  | — |
Other |  |  | (407) |  |  | (187) |
Total deferred tax liabilities |  |  | (57,731) |  |  | (40,143) |
Net deferred tax assets |  | $ | 2,661 |  | $ | 5,152 |
Valuation Allowance Rollforward | Activity in the Company’s valuation allowance accounts consists of the following (in thousands):
|  | Year Ended December 31, |
|  | 2019 |  | 2018 |  | 2017 |
Beginning balance |  | $ | 10,867 |  | $ | 9,526 |  | $ | 9,949 |
Additions of deferred income tax expense |  |  | 7,373 |  |  | 2,913 |  |  | 2,044 |
Reductions of deferred income tax expense |  |  | (1,189) |  |  | (1,572) |  |  | (2,467) |
Ending balance |  | $ | 17,051 |  | $ | 10,867 |  | $ | 9,526 |
Expiration of Net Operating Loss Carryforwards | As of December 31, 2019, after consideration of all tax loss and tax credit carry back opportunities, the Company had tax affected tax loss carry forwards worldwide expiring as follows (in thousands):
2020 |  | $ | 1,151
2021 |  |  | 5
2022 |  |  | 3
2023 |  |  | 1,105
After 2023 |  |  | 9,298
No expiration |  |  | 7,660
Total |  | $ | 19,222
Reserve for Uncertain Tax Positions Rollforward | The tabular reconciliation of the reserve for uncertain tax benefits on a gross basis without interest for the three years ended December 31, 2019 is presented below (in thousands):
Balance as of December 31, 2016 |  | $ | 2,382
Additions for current year tax positions |  |  | 916
Reductions in prior year tax positions |  |  | —
Balance as of December 31, 2017 |  |  | 3,298
Additions for current year tax positions |  |  | 3,600
Reductions in prior year tax positions |  |  | (2,114)
Balance as of December 31, 2018 |  |  | 4,784
Additions for current year tax positions |  |  | —
Reductions in prior year tax positions |  |  | —
Balance as of December 31, 2019 |  | $ | 4,784
Jurisdictions Open to Income Tax Examination | The following table presents the major tax jurisdictions and tax years that are open as of December 31, 2019 and subject to examination by the respective tax authorities:
Tax Jurisdiction |  | Tax Year Ended
United States |  | 2016 to present
Australia |  | 2015 to present
Brazil |  | 2014 to present
Canada |  | 2011 to present
Mexico |  | 2014 to present
Philippines |  | 2016 to present

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