Income Taxes

12 Months Ended

Dec. 31, 2024

Income Tax Disclosure [Abstract]

Income Taxes

Note K—Income Taxes

The provision for income taxes for the years ended December 31, 2024, 2023, and 2022, consisted of the following (in thousands):

	Year Ended December 31,
	2024		2023		2022
Current:
Federal	$	76,083	$	108,825	$	137,483
State	28,090		38,365		47,032
Foreign	20,400		34,885		40,204
Deferred:
Federal and state	(14,512)		(16,266)		13,542
Foreign	(3,988)		(372)		775
	$	106,073	$	165,437	$	239,036

Income before the provision for income taxes for the years ended December 31, 2024, 2023, and 2022, consisted of the following (in thousands):

	Year Ended December 31,
	2024		2023		2022
U.S.	$	332,547	$	485,291	$	780,624
Foreign	25,124		91,292		116,331
	$	357,671	$	576,583	$	896,955

The income taxes shown above varied from the statutory federal income tax rates for these periods as follows:

	Year Ended December 31,
	2024		2023		2022
Federal U.S. income tax rate	21.0	%	21.0	%	21.0	%
State income taxes, net of federal tax benefit	5.1		4.7		4.7
Permanent book/tax differences	0.7		0.4		0.3
Compensation book/tax differences	1.8		1.3		0.7
Non-U.S. income taxed at different rates, net of foreign tax credits	2.0		2.5		1.7
Federal tax credits	(1.0)		(0.8)		(1.0)
Tax impact of uncertain tax positions	(0.7)		(0.1)		0.1
Other, net	0.8		(0.3)		(0.9)
Effective tax rate	29.7	%	28.7	%	26.6	%

The deferred portion of the tax provision (benefit) consisted of the following (in thousands):

	Year Ended December 31,
	2024		2023		2022
Accrued expenses, deducted for tax when paid	$	(23,871)	$	(23,456)	$	41,953
Internal-use software and capitalized costs	(6,677)		(11,054)		(7,930)
Depreciation	(1,343)		(330)		4,608
Unrealized gains (losses) from investments held in employee deferred compensation trusts	16,578		19,139		(26,009)
Other, net	(3,187)		(937)		1,695
	$	(18,500)	$	(16,638)	$	14,317

The components of the deferred income tax amounts at December 31, 2024, and 2023, were as follows (in thousands):

	December 31,
	2024		2023
Deferred income tax assets
Employee deferred compensation and other benefit obligations	$	189,407	$	162,803
Deferred revenues, foreign royalties and management fees	72		375
Credits and net operating loss carryforwards	31,337		28,137
Stock-based compensation	7,440		6,318
Allowance for credit losses	5,909		6,825
Workers’ compensation	2,467		3,052
Operating lease liabilities	43,230		48,358
Other	17,010		17,698
Total deferred income tax assets	296,872		273,566
Deferred income tax liabilities
Amortization of intangible assets	(20,816)		(20,162)
Property and equipment basis differences	(757)		(8,612)
Unrealized gains from investments held in employee deferred compensation trusts	(43,709)		(27,131)
Right-of-use assets	(35,213)		(38,837)
Other	(12,230)		(13,258)
Total deferred income tax liabilities	(112,725)		(108,000)
Valuation allowance	(26,417)		(25,772)
Total deferred income tax assets, net	$	157,730	$	139,794

Credits and net operating loss carryforwards include tax-effected net operating losses in foreign countries of $29.5 million that expire in 2025 and later, and foreign tax credits of $1.8 million that expire in 2029 and later. Valuation allowances of $24.6 million have been maintained against net operating loss carryforwards and other deferred items in foreign countries. In addition, a valuation allowance of $1.8 million has been maintained against the foreign tax credits.

As of December 31, 2024, the Company’s consolidated financial statements provide for any related U.S. tax liability on earnings of international subsidiaries that may be repatriated.

The following table reconciles the total amounts of gross unrecognized tax benefits from January 1, 2022, through December 31, 2024 (in thousands): 

	2024		2023		2022
Balance at beginning of period	$	11,133	$	12,260	$	11,264
Gross increases—tax positions in prior years	1,085		27		1,528
Gross decreases—tax positions in prior years	0		0		(7)
Gross increases—tax positions in current year	902		769		1,533
Lapse of statute of limitations	(4,501)		(1,923)		(2,058)
Balance at end of period	$	8,619	$	11,133	$	12,260

The total amount of unrecognized tax benefits that, if recognized, would impact the effective tax rate is $8.4 million, $11.1 million and $12.3 million for 2024, 2023, and 2022, respectively.

The Company’s continuing practice is to recognize interest and penalties related to income tax matters in income tax expense. The total amount of interest and penalties accrued as of December 31, 2024, is $1.4 million, including a $0.3 million increase recorded in income tax expense during the year. The total amount of interest and penalties accrued as of December 31, 2023, was $1.0 million, including a $0.4 million increase recorded in income tax expense during the year. The total amount of

interest and penalties accrued as of December 31, 2022, was $0.6 million, including a $0.2 million decrease recorded in income tax expense during the year.

The Company does not believe it is reasonably possible that the settlement of tax uncertainties will occur within the next 12 months.

The Company’s major income tax jurisdictions are the U.S., Australia, Belgium, Brazil, Canada, Germany and the United Kingdom. For U.S. federal income tax, the Company remains subject to examination for 2021 and subsequent years. For major U.S. states, with few exceptions, the Company remains subject to examination for 2020 and subsequent years. Generally, for foreign countries, the Company remains subject to examination for 2017 and subsequent years. The Company is currently under audit by the Internal Revenue Service (IRS) for the fiscal year ended December 31, 2021; no material tax adjustments have been identified.