Income Taxes (Tables)

12 Months Ended

Dec. 31, 2019

Operating Loss Carryforwards [Line Items]

Schedule of Income Tax Expense and Effective Tax Rate

The following table shows our income tax expense and our effective tax rate for the years ended December 31, 2019, 2018, and 2017:

(in millions)	2019			2018			2017
Income before income taxes and equity in net loss of unconsolidated entities	$	198.5		$	232.9		$	181.1
Equity in net loss of unconsolidated entities	(0.9		)	(2.1		)	(1.3		)
Total	$	197.6		$	230.8		$	179.8
Income tax expense	$	45.6		$	47.8		$	42.9
Effective tax rate	23.1		%	20.7		%	23.9		%

Schedule of Effective Income Tax Rate Reconciliation

The following table reconciles our income tax expense at the U.S. federal income tax rate to income tax expense as recorded:

	2019					2018					2017
(in millions, except percentages)	Amount			%		Amount			%		Amount			%
Income tax expense at U.S. federal rate	$	41.5		21.0	%	$	48.5		21.0	%	$	63.0		35.0	%
State income taxes, net of federal income tax benefit	7.5			3.8		7.4			3.2		3.0			1.7
Impacts of Tax Reform Act (1)	—			—		(2.3		)	(1.0	)	(10.6		)	(5.9	)
Stock-based compensation activity	(2.2		)	(1.1	)	(2.6		)	(1.1	)	0.3			0.2
Equity in net income of unconsolidated subsidiaries (including holding gains upon acquisition)	0.3			0.2		1.0			0.4		1.2			0.7
Book gain over tax gain on sale of HelloWallet	—			—		—			—		(6.8		)	(3.8	)
Net change in valuation allowance related to non-U.S. deferred tax assets, primarily net operating losses	(2.1		)	(1.1	)	(0.2		)	(0.1	)	0.1			0.1
Difference between U.S. federal statutory and foreign tax rates	1.1			0.6		0.2			0.1		(5.2		)	(2.9	)
Change in unrecognized tax benefits	(0.9		)	(0.5	)	1.0			0.4		1.2			0.7
Credits and incentives	(2.2		)	(1.1	)	(3.6		)	(1.6	)	(3.7		)	(2.1	)
Foreign tax provisions (GILTI, FDII, and BEAT)(2)	(1.4		)	(0.7	)	(3.7		)	(1.6	)	—			—
Non-deductible expenses and other, net	4.0			2.0		2.1			0.9		0.4			0.2
Total income tax expense	$	45.6		23.1	%	$	47.8		20.7	%	$	42.9		23.9	%

Schedule of Components of Income Tax Expense

ncome tax expense consists of the following:

	Year ended December 31
(in millions)	2019			2018			2017
Current tax expense:
U.S.
Federal	$	28.3		$	31.0		$	40.3
State	9.4			11.1			6.6
Non-U.S.	14.0			12.3			9.9
Current tax expense	51.7			54.4			56.8
Deferred tax expense (benefit):
U.S.
Federal	0.2			(3.0		)	(10.9		)
State	—			(1.7		)	(1.9		)
Non-U.S.	(6.3		)	(1.9		)	(1.1		)
Deferred tax expense, net	(6.1		)	(6.6		)	(13.9		)
Income tax expense	$	45.6		$	47.8		$	42.9

Schedule of Income before Income Tax

The following table provides our income before income taxes and equity in net income (loss) of unconsolidated entities, generated by our U.S. and non-U.S. operations:

	Year ended December 31
(in millions)	2019		2018		2017
U.S.	$	159.7	$	188.2	$	143.5
Non-U.S.	38.8		44.7		37.6
Income before income taxes and equity in net loss of unconsolidated entities	$	198.5	$	232.9	$	181.1

Schedule of Deferred Tax Assets and Liabilities

The tax effects of the temporary differences that give rise to the deferred income tax assets and liabilities are as follows:

	As of December 31
(in millions)	2019			2018
Deferred tax assets:
Stock-based compensation expense	$	7.6		$	4.7
Accrued liabilities	18.0			17.0
Deferred revenue	5.5			3.7
Net operating loss carryforwards - U.S.	0.2			0.2
Net operating loss carryforwards - Non-U.S.	4.5			2.4
Deferred royalty revenue	0.2			0.3
Allowance for doubtful accounts	1.4			1.4
Deferred rent	8.0			7.4
Unrealized exchange losses, net	—			0.2
Other	0.6			0.6
Total deferred tax assets	46.0			37.9
Deferred tax liabilities:
Acquired intangible assets	(82.7		)	(16.5		)
Property, equipment, and capitalized software	(25.8		)	(26.7		)
Unrealized exchange gains, net	(1.1		)	—
Prepaid expenses	(9.1		)	(7.1		)
Investments in unconsolidated entities	(6.3		)	(4.8		)
Withholding tax - foreign dividends	(3.0		)	(3.0		)
Total deferred tax liabilities	(128.0		)	(58.1		)
Net deferred tax liability before valuation allowance	(82.0		)	(20.2		)
Valuation allowance	(2.3		)	(2.0		)
Deferred tax liability, net	$	(84.3	)	$	(22.2	)

Schedule of Deferred Tax Assets and Liabilities Included in Consolidated Balance Sheets

The deferred tax assets and liabilities are presented in our Consolidated Balance Sheets as follows:

	As of December 31
(in millions)	2019			2018
Deferred tax asset, net	$	10.7		$	—
Deferred tax liability, net	(95.0		)	(22.2		)
Deferred tax liability, net	$	(84.3	)	$	(22.2	)

Schedule of Gross Unrecognized Tax Benefits

The table below reconciles the beginning and ending amount of the gross unrecognized tax benefits as follows:

(in millions)	2019			2018
Gross unrecognized tax benefits - beginning of the year	$	13.1		$	18.7
Increases as a result of tax positions taken during a prior-year period	3.0			0.8
Decreases as a result of tax positions taken during a prior-year period	(0.2		)	(0.3		)
Increases as a result of tax positions taken during the current period	1.2			1.6
Decreases relating to settlements with tax authorities	(3.8		)	(2.5		)
Reductions as a result of lapse of the applicable statute of limitations	(0.7		)	(5.2		)
Gross unrecognized tax benefits - end of the year	$	12.6		$	13.1

Summary of Income Tax Examinations

The following table summarizes our gross liability for interest and penalties:

	As of December 31
(in millions)	2019		2018
Liabilities for interest and penalties	$	1.6	$	1.3

U.S [Member]

Operating Loss Carryforwards [Line Items]

Summary of Operating Loss Carryforwards

The following table summarizes our U.S. net operating loss (NOL) carryforwards:

	As of December 31
(in millions)			2019			2018
			Expiration Dates			Expiration Dates
U.S. federal NOLs subject to expiration dates	$	0.8	2023	$	1.0	2023

Non-U.S. [Member]

Operating Loss Carryforwards [Line Items]

Summary of Operating Loss Carryforwards

The following table summarizes our NOL carryforwards for our non-U.S. operations:

	As of December 31
(in millions)	2019		2018
Non-U.S. NOLs subject to expiration dates from 2021 through 2039	$	6.8	$	5.5
Non-U.S. NOLs with no expiration date	14.6		5.1
Total	$	21.4	$	10.6
Non-U.S. NOLs not subject to valuation allowances	$	11.7	$	2.0