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Income Taxes
 12 Months Ended
Dec. 31, 2024
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
 
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, 2024, 2023, and 2022:
(in millions)202420232022
Income before income taxes and equity in investments of unconsolidated entities$491.3 $181.5 $130.6 
Equity in investments of unconsolidated entities(17.4)(7.4)(3.6)
Income before income taxes$473.9 $174.1 $127.0 
Income tax expense$104.0 $33.0 $56.5 
Effective tax rate21.9 %19.0 %44.5 %

Our effective tax rate in 2024 was 21.9%, an increase of 2.9 percentage points, compared with 19.0% in the prior year. The company's effective tax rate was favorably impacted by the book gain in excess of taxable gain on the sale of its Commodity and Energy Data business and was offset by deferred taxes that we recorded with respect to unremitted foreign earnings. Further, our 2023 effective tax rate was lower primarily due to the recognition of tax benefits related to a retroactive tax election.

Our effective tax rate for the year ended December 31, 2023 was 19.0%, a decrease of 25.5 percentage points, compared with 44.5% in 2022. The decrease is primarily attributable to the recognition of $13.7 million of tax benefits related to a retroactive tax election with respect to our 2021 and 2022 tax periods that was made in 2022 but not approved until 2023. We received confirmation of the approval of the tax election in the second quarter of 2023, which allowed us to recognize the tax benefits in that period.
In October 2021, the Organization for Economic Co-operation and Development (OECD) agreed to a two-pillar approach to global taxation focusing on global profit allocation (Pillar One) and a global minimum tax rate (Pillar Two). In December 2022, the EU member states agreed to implement the OECD’s global corporate minimum tax rate of 15% under Pillar Two to be effective in January 2024. Other countries are also considering changes to their tax laws to adopt certain parts of the OECD’s proposals. This legislation represents a significant change in the international tax regime and could result in increases to our effective tax rate as a result of the imposition of minimum taxes. The Pillar Two minimum tax is treated as a period cost beginning in 2024 and did not have a material impact on our 2024 effective tax rate. We continue to monitor developments and administrative guidance in addition to evaluating the potential impact on our consolidated financial statements for future periods.

The amount of accumulated undistributed earnings of our foreign subsidiaries was $304.0 million as of December 31, 2024. We generally consider most of our US directly-owned foreign subsidiary earnings to be permanently reinvested. During the fourth quarter of 2024, we determined $142.0 million in earnings of certain of our foreign subsidiaries to be no longer permanently reinvested. We anticipate a one-time repatriation of these earnings back the US via distribution later in 2025. We have recorded a deferred tax liability of $7.1 million that reflects the income tax effects of the repatriation of these earnings, mostly due to non-US withholding taxes, that would be due at the time of remittance. We have not recorded deferred income taxes on the remaining balance of accumulated undistributed earnings of our foreign subsidiaries because we consider those earnings to be permanently reinvested, and we do not anticipate dividends in the foreseeable future.

The following table reconciles our income tax expense at the US federal income tax rate to income tax expense as recorded:
202420232022
(in millions, except percentages)Amount%Amount%Amount%
Income tax expense at US federal rate$99.5 21.0 %$36.6 21.0 %$26.7 21.0 %
State income taxes, net of federal income tax benefit18.4 3.9 %7.3 4.2 %6.4 5.0 %
Stock-based compensation activity(2.3)(0.5)%1.6 0.9 %(1.5)(1.2)%
Equity in net income (loss) of unconsolidated subsidiaries (including holding gains upon acquisition) 3.4 0.7 %1.1 0.6 %1.0 0.8 %
Gain on Sale of Business(9.7)(2.0)%— — %— — %
Acquisition earn-out— — %— — %1.8 1.4 %
Net change in valuation allowance related to deferred tax assets, including net operating losses0.5 0.1 %(3.2)(1.8)%7.7 6.1 %
Difference between US federal statutory and foreign tax rates and other impacts of foreign operations0.4 0.1 %1.7 1.0 %(1.9)(1.5)%
Change in unrecognized tax benefits2.9 0.6 %(9.8)(5.6)%14.1 11.1 %
Credits and incentives(5.9)(1.2)%(4.1)(2.4)%(3.8)(3.0)%
Foreign tax provisions (GILTI, FDII, and BEAT)(1)
(16.1)(3.4)%(0.2)(0.1)%(4.6)(3.6)%
Change in deferred taxes with respect to unremitted foreign earnings6.8 1.4 %— — %— — %
Non-deductible expenses and other, net6.1 1.2 %2.0 1.2 %10.6 8.4 %
Total income tax expense$104.0 21.9 %$33.0 19.0 %$56.5 44.5 %
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(1) The Tax Reform Act established the Global Intangible Low-Tax Income (GILTI) provision, which taxes US allocated expenses and certain income from foreign operations; the Foreign-Derived Intangible Income (FDII) provision, which allows a deduction against certain types of US taxable income resulting in a lower effective US tax rate on such income; and the Base Erosion Anti-Abuse Tax (BEAT), which is a minimum tax based on cross-border service payments by US entities.
The following table shows the components of our income tax expense:
Year ended December 31,
(in millions)202420232022
Current tax expense:
US
Federal$74.3 $27.7 $49.1 
State30.0 13.4 14.9 
Non-US34.3 24.3 30.1 
Current tax expense138.6 65.4 94.1 
Deferred tax expense (benefit):
US
Federal(17.6)(15.6)(20.8)
State(6.5)(4.2)(6.8)
Non-US(10.5)(12.6)(10.0)
Deferred tax expense, net(34.6)(32.4)(37.6)
Income tax expense$104.0 $33.0 $56.5 

The following table provides our income before income taxes and equity in investments of unconsolidated entities, generated by our US and non-US operations:
Year ended December 31,
(in millions)202420232022
US$400.8 $101.4 $82.4 
Non-US90.5 80.1 48.2 
Income before income taxes and equity in investments of unconsolidated entities$491.3 $181.5 $130.6 
Deferred Tax Assets and Liabilities

We recognize deferred income taxes for the temporary differences between the carrying amount of assets and liabilities for financial statement purposes and their tax basis. 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)20242023
Deferred tax assets:
Stock-based compensation$7.8 $7.1 
Accrued liabilities33.5 27.5 
Deferred revenue6.7 8.5 
Net operating loss carryforwards - Non-US18.9 18.1 
Capitalized expenses102.7 69.2 
Allowance for doubtful accounts2.4 1.8 
Lease liabilities 35.9 35.0 
Capital loss and other carryforwards12.9 16.7 
Other— 0.1 
Total deferred tax assets220.8 184.0 
Deferred tax liabilities:
Acquired intangible assets(68.5)(73.2)
Property, equipment, and capitalized software(39.6)(39.2)
Lease right-of-use assets(31.4)(30.2)
Unrealized exchange gains, net(1.7)(1.0)
Prepaid expenses(19.3)(19.2)
Investments in unconsolidated entities(11.4)(14.6)
Withholding tax - foreign dividends(7.1)(1.3)
Total deferred tax liabilities(179.0)(178.7)
Net deferred tax asset before valuation allowance41.8 5.3 
Valuation allowance(26.2)(26.3)
Deferred tax asset (liability)$15.6 $(21.0)

The net decrease in our valuation allowance, from $26.3 million at December 31, 2023 to $26.2 million at December 31, 2024, is primarily attributable to current year movements in net operating losses, capital losses and foreign tax credit carryforwards for which amounts are able to realized or for which full realization is uncertain. Included in the valuation allowance of $26.2 million are $9.7 million of foreign tax credits that will expire in 2031 through 2034. In assessing the need for a valuation allowance, many factors are considered, including the specific taxing jurisdiction, the carryforward period, income tax strategies and forecasted earnings for the entities in each jurisdiction. A valuation allowance is recognized if, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized.

The deferred tax assets and liabilities are presented in our Consolidated Balance Sheets as follows:
As of December 31,
(in millions)20242023
Deferred tax asset, net$43.2 $14.6 
Deferred tax liability, net(27.6)(35.6)
Deferred tax asset (liability), net$15.6 $(21.0)
The following table summarizes our NOL carryforwards for our non-US operations:
As of December 31,
(in millions)20242023
Non-US NOLs subject to expiration dates from 2027 through 2044$22.8 $17.8 
Non-US NOLs with no expiration date51.9 54.1 
Total$74.7 $71.9 
Non-US NOLs not subject to valuation allowances$15.3 $12.3 

In assessing the realizability of our deferred tax assets, we consider whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. We recorded a valuation allowance against approximately $59.4 million of the non-US NOLs, reflecting the likelihood that the benefit of these NOLs will not be realized.

Unrecognized Tax Benefits

We conduct business globally and, as a result, we file income tax returns in US federal, state, local, and foreign jurisdictions. In the normal course of business, we are subject to examination by tax authorities throughout the world. The open tax years for our US Federal tax returns and most state tax returns include the years 2020 to the present.

We are currently under audit by state and local tax authorities in the US as well as tax authorities in certain non-US jurisdictions. It is likely that the examination phase of some of these state, local, and non-US audits will conclude in 2025. It is not possible to estimate the effect of current audits on previously recorded unrecognized tax benefits.

As of December 31, 2024, our Consolidated Balance Sheet included a current liability of $0.1 million and a non-current liability of $11.7 million for unrecognized tax benefits. As of December 31, 2023, our Consolidated Balance Sheet included a current liability of $6.2 million and a non-current liability of $8.3 million for unrecognized tax benefits. These amounts include interest and penalties, less any associated tax benefits.

The table below reconciles the beginning and ending amount of the gross unrecognized tax benefits as follows:
(in millions)20242023
Gross unrecognized tax benefits - beginning of the year$13.0 $26.5 
Increases as a result of tax positions taken during a prior-year period0.9 0.6 
Decreases as a result of tax positions taken during a prior-year period(0.1)(14.3)
Increases as a result of tax positions taken during the current period2.1 1.9 
Decreases relating to settlements with tax authorities(4.7)(0.4)
Decreases as a result of lapse of the applicable statute of limitations(0.1)(1.3)
Gross unrecognized tax benefits - end of the year$11.1 $13.0 

In 2024, we recorded a net increase of $2.9 million of gross unrecognized tax benefits before settlements and lapses of statutes of limitations, of which $2.9 million increased our income tax expense by $2.9 million.

In addition, we reduced our gross unrecognized tax benefits by $4.8 million for settlements and lapses of statutes of limitations, of which $0.7 million decreased our income tax expense by $0.7 million.

As of December 31, 2024, we had $11.1 million of gross unrecognized tax benefits, which if recognized, would decrease our income tax expense by $10.9 million and reduce our effective income tax rate.
We record interest and penalties related to uncertain tax positions as part of our income tax expense. The following table summarizes our gross liability for interest and penalties:
As of December 31,
(in millions)20242023
Liabilities for interest and penalties$1.3 $2.3 

We recorded the increase in the liabilities for penalties and interest, net of any tax benefits, to income tax expense in our Consolidated Statements of Income in 2024.