Income Taxes

12 Months Ended

Dec. 31, 2021

Income Tax Disclosure [Abstract]

Income Taxes

9. Income Taxes

The provision for income taxes consists of the following:

	Year Ended December 31,
	2021		2020		2019
	(In thousands)
Current:
Federal	$	36,661	$	30,215	$	28,928
State and local		17,238		19,130		7,686
Foreign		19,018		15,538		13,234
Total current provision		72,917		64,883		49,848
Deferred:
Federal		2,249		7,474		2,579
State and local		778		1,439		403
Foreign		91		1,186		(308	)
Total deferred provision		3,118		10,099		2,674
Provision for income taxes	$	76,035	$	74,982	$	52,522

Pre-tax income from U.S. operations was $234.6 million, $288.3 million and $190.4 million for the years ended December 31, 2021, 2020 and 2019, respectively. Pre-tax income from foreign operations was $99.3 million, $86.1 million and $67.0 million for the years ended December 31, 2021, 2020 and 2019, respectively.

The difference between the Company’s reported provision for income taxes and the U.S. federal statutory rate of 21% is as follows:

	Year Ended December 31,
	2021				2020				2019
U.S. federal tax at statutory rate		21.0		%		21.0		%		21.0		%
State and local taxes - net of federal benefit		4.4				4.4				2.5
Credits and deductions related to research activities		(0.4	)			(0.3	)			(0.3	)
Foreign rate differential benefit		(0.2	)			(0.4	)			(0.5	)
Excess tax benefit from stock-based compensation		(2.9	)			(5.4	)			(3.5	)
Other, net		0.9				0.7				1.2
Provision for income taxes		22.8		%		20.0		%		20.4		%

The following is a summary of the Company’s net deferred tax assets:

	As of December 31,
	2021			2020
	(In thousands)
Deferred tax assets:
Stock compensation expense	$	2,683		$	3,682
Operating lease liabilities		18,688			19,339
Other		3,004			1,968
Total deferred tax assets		24,375			24,989
Valuation allowance		—			—
Net deferred tax assets		24,375			24,989
Deferred tax liabilities:
Depreciation and amortization		(9,847	)		(9,729	)
Capitalized software development costs		(9,417	)		(7,828	)
Goodwill and intangible assets		(4,311	)		(2,852	)
Operating lease right-of-use assets		(14,940	)		(15,600	)
Deferred tax (liability) asset, net	$	(14,140	)	$	(11,020	)

The Company or one of its subsidiaries files U.S. federal, state and foreign income tax returns. The Company is currently under a New York State income tax examination for tax years 2010 through 2017 and a New York City income tax examination for the tax years 2016 through 2018. At this time, the Company cannot estimate when the examinations will conclude or the impact such examinations will have on the Company’s Consolidated Financial Statements, if any. Generally, other than New York City and State, the Company is no longer subject to tax examinations by tax authorities for years prior to 2018.

A reconciliation of the unrecognized tax benefits is as follows:

	Year Ended December 31,
	2021			2020		2019
	(In thousands)
Balance at beginning of year	$	16,317		$	6,831	$	4,718
(Decrease) increase attributable to state and local tax apportionment		(1,228	)		9,486		2,113
Balance at end of year	$	15,089		$	16,317	$	6,831

As of December 31, 2021, the Company recorded $15.1 million of unrecognized tax benefits which, if recognized, would affect the Company’s effective tax rate. Due to the uncertainty related to the timing and potential outcome of the audits, the Company cannot reasonably estimate the amount of the unrecognized tax benefit that could be adjusted in the next 12 months. During the years ended December 31, 2021, 2020 and 2019, the Company recognized $3.3 million, $3.7 million and $0.6 million, respectively, in penalties and interest. The Company had $8.3 million, $4.9 million and $1.2 million accrued for the payment of interest and penalties at December 31, 2021, 2020 and 2019 respectively.