Income Taxes (Tables)

12 Months Ended

Dec. 31, 2020

Income before provision for income taxes consisted of the following (in thousands):


	Year Ended December 31,
	2020		2019		2018
US	$	259,132	$	144,495	$	61,972
Foreign	23,766		56,747		94,516
Total income before provision for income taxes	$	282,898	$	201,242	$	156,488

Components of Provision for Income Taxes

The provision for income tax on earnings from continuing operations consisted of the following (in thousands):


	Year Ended December 31,
	2020		2019		2018
Current expense (benefit):
Federal	$	43,185	$	(2,917)	$	23,254
State	8,528		(6,464)		2,983
Foreign	10,112		21,008		29,532
	61,825		11,627		55,769
Deferred expense (benefit):
Federal	15,851		27,640		(10,447)
State	2,192		5,535		(2,169)
Foreign	(9,494)		(12,469)		3,599
	8,549		20,706		(9,017)
Provision for income taxes	$	70,374	$	32,333	$	46,752

Schedule of Effective Tax Rates

The reconciliation of federal statutory income tax rate to our effective tax rate was as follows:


	Year Ended December 31,
	2020		2019		2018
Federal provision	21.0	%	21.0	%	21.0	%
State provision	3.2	%	0.2	%	0.1	%
Foreign rate differential(1)	(0.5)	%	(2.2)	%	(11.7)	%

Change in valuation allowance(2)	0.9	%	(0.5)	%	17.7	%
IRS settlement(3)	—	%	(2.4)	%	—	%
Tax effect of CFPB settlement fees(4)	1.1	%	—	%	—	%
Other	(0.8)	%	—	%	2.8	%
Effective rate	24.9	%	16.1	%	29.9	%

________________________

(1)Relates primarily to lower tax rates on income or loss attributable to international operations.

(2)In 2018, valuation allowance net increase recorded as a result of certain foreign subsidiaries' cumulative operating losses for tax purposes.

(3)In 2019, relates to tax benefit resulting from tax accounting method change.

(4)Non-deductible expense for tax purposes. Refer to “Note 12: Commitments and Contingencies” for details of the CFPB settlement.

Components of Deferred Tax Assets and Liabilities

Significant components of the Company's deferred tax assets and liabilities were as follows (in thousands):


	December 31, 2020		December 31, 2019
Deferred tax assets:
Net operating losses	$	43,307	$	36,236
Operating lease liabilities	12,583		18,023
Accrued expenses	12,862		10,050
Difference in basis of bond and loan costs	1,267		4,194
Stock-based compensation	2,787		2,882
Other	5,596		1,822
Total deferred tax assets	78,402		73,207
Valuation allowance	(38,463)		(36,422)
Total deferred tax assets net of valuation allowance	39,939		36,785
Deferred tax liabilities:
Deferred court cost	—		(23,682)
Difference in basis of receivable portfolio	(20,806)		(57)
Right-of-use asset	(8,525)		(14,422)
Difference in basis of depreciable and amortizable assets	(13,863)		(3,680)
Prepaid expenses	(793)		(628)
Other	(1,682)		(4,559)
Total deferred tax liabilities	(45,669)		(47,028)
Net deferred tax liability(1)	$	(5,730)	$	(10,243)

________________________

(1)The Company operates in multiple jurisdictions. Deferred tax assets and liabilities are netted for each tax-paying component of the Company within a particular tax jurisdiction and presented as a single amount in the statement of financial condition.

Unrecognized Tax Benefit

A reconciliation of the beginning and ending amounts of unrecognized tax benefit is as follows (in thousands):


	Amount









Balance as of December 31, 2017	$	20,020

Increases related to prior year tax positions	256
Increases related to current year tax positions	1,958
Decrease related to expiration of statute of limitations	(3,221)
Decreases related to settlements with taxing authorities	(461)
Balance as of December 31, 2018	18,552
Decreases related to prior year tax positions	(10,673)
Increases related to current year tax positions	4,442
Decrease related to expiration of statute of limitations	(2,493)
Decreases related to settlements with taxing authorities	(1,920)
Balance as of December 31, 2019	7,908
Decrease related to prior year tax positions	(608)
Increases related to prior year tax positions	6
Increases related to current year tax positions	574
Decrease related to expiration of statute of limitations	(827)
Decreases related to settlements with taxing authorities	(272)
Balance as of December 31, 2020	$	6,781