XML 67 R41.htm IDEA: XBRL DOCUMENT v3.20.4
Income Taxes (Tables)
 12 Months Ended
Dec. 31, 2020
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, 2020, 2019, and 2018:

(in millions)202020192018
Income before income taxes and equity in net income (loss) of unconsolidated entities$283.0 $198.5 $232.9 
Equity in net income (loss) of unconsolidated entities0.3 (0.9)(2.1)
Total$283.3 $197.6 $230.8 
Income tax expense$59.7 $45.6 $47.8 
Effective tax rate21.1 %23.1 %20.7 %
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:
202020192018
(in millions, except percentages)Amount%Amount%Amount%
Income tax expense at U.S. federal rate$59.5 21.0 %$41.5 21.0 %$48.5 21.0 %
State income taxes, net of federal income tax benefit9.5 3.4 7.5 3.8 7.4 3.2 
Impacts of Tax Reform Act (1)
— — — — (2.3)(1.0)
Stock-based compensation activity(4.9)(1.7)(2.2)(1.1)(2.6)(1.1)
Equity in net income of unconsolidated subsidiaries (including holding gains upon acquisition) (13.8)(4.9)0.3 0.2 1.0 0.4 
Acquisition earn-out7.6 2.7 — — — — 
Net change in valuation allowance related to non-U.S. deferred tax assets, primarily net operating losses2.7 1.0 (2.1)(1.1)(0.2)(0.1)
Difference between U.S. federal statutory and foreign tax rates(0.1)— 1.1 0.6 0.2 0.1 
Change in unrecognized tax benefits1.2 0.4 (0.9)(0.5)1.0 0.4 
Credits and incentives(2.2)(0.8)(2.2)(1.1)(3.6)(1.6)
Foreign tax provisions (GILTI, FDII, and BEAT)(2)
(2.7)(1.0)(1.4)(0.7)(3.7)(1.6)
Non-deductible expenses and other, net2.9 1.0 4.0 2.0 2.1 0.9 
Total income tax expense$59.7 21.1 %$45.6 23.1 %$47.8 20.7 %

(1) Impacts of the Tax Reform Act (change in U.S. tax rate, deemed mandatory repatriation, and deferred taxes).

(2) The Tax Reform Act established the Global Intangible Low-Tax Income (GILTI) provision, which taxes U.S. allocated expenses and certain income from foreign operations; the Foreign-Derived Intangible Income (FDII) provision, which allows a deduction against certain types of U.S. taxable income resulting in a lower effective U.S. tax rate on such income; and the Base Erosion Anti-abuse Tax (BEAT), which is a new minimum tax based on cross-border service payments by U.S. entities.
Schedule of Components of Income Tax Expense
Income tax expense consists of the following:
Year ended December 31
(in millions)202020192018
Current tax expense:
U.S.
Federal$31.5 $28.3 $31.0 
State11.7 9.4 11.1 
Non-U.S.23.0 14.0 12.3 
Current tax expense66.2 51.7 54.4 
Deferred tax expense (benefit):
U.S.
Federal1.2 0.2 (3.0)
State0.4 — (1.7)
Non-U.S.(8.1)(6.3)(1.9)
Deferred tax expense, net(6.5)(6.1)(6.6)
Income tax expense$59.7 $45.6 $47.8 
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)202020192018
U.S.$197.4 $159.7 $188.2 
Non-U.S.85.6 38.8 44.7 
Income before income taxes and equity in net income (loss) of unconsolidated entities$283.0 $198.5 $232.9 
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)20202019
Deferred tax assets:
Stock-based compensation expense$2.9 $7.6 
Accrued liabilities20.6 18.0 
Deferred revenue6.7 5.5 
Net operating loss carryforwards - U.S.0.1 0.2 
Net operating loss carryforwards - Non-U.S.7.9 4.5 
Deferred royalty revenue0.2 0.2 
Allowance for doubtful accounts1.4 1.4 
Lease liabilities 32.8 — 
Deferred rent— 8.0 
Other0.7 0.6 
Total deferred tax assets73.3 46.0 
Deferred tax liabilities:
Acquired intangible assets(93.9)(82.7)
Property, equipment, and capitalized software(25.1)(25.8)
Lease right-of-use assets(25.9)— 
Unrealized exchange gains, net(1.3)(1.1)
Prepaid expenses(12.1)(9.1)
Investments in unconsolidated entities(6.0)(6.3)
Withholding tax - foreign dividends(3.0)(3.0)
Total deferred tax liabilities(167.3)(128.0)
Net deferred tax liability before valuation allowance(94.0)(82.0)
Valuation allowance(2.3)(2.3)
Deferred tax liability, net$(96.3)$(84.3)
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)20202019
Deferred tax asset, net$12.6 $10.7 
Deferred tax liability, net(108.9)(95.0)
Deferred tax liability, net$(96.3)$(84.3)
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)20202019
Gross unrecognized tax benefits - beginning of the year$12.6 $13.1 
Increases as a result of tax positions taken during a prior-year period0.5 3.0 
Decreases as a result of tax positions taken during a prior-year period(2.5)(0.2)
Increases as a result of tax positions taken during the current period1.3 1.2 
Decreases relating to settlements with tax authorities— (3.8)
Reductions as a result of lapse of the applicable statute of limitations(0.1)(0.7)
Gross unrecognized tax benefits - end of the year$11.8 $12.6 
Summary of Income Tax Examinations The following table summarizes our gross liability for interest and penalties:
As of December 31
(in millions)20202019
Liabilities for interest and penalties$1.4 $1.6 
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)20202019
Expiration DatesExpiration Dates
U.S. federal NOLs subject to expiration dates$0.6 2023$0.8 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)20202019
Non-U.S. NOLs subject to expiration dates from 2021 through 2040$21.7 $6.8 
Non-U.S. NOLs with no expiration date11.6 14.6 
Total$33.3 $21.4 
Non-U.S. NOLs not subject to valuation allowances$24.5 $11.7 

The change in non-U.S. NOL carryforwards as of December 31, 2020 compared with 2019 primarily reflects NOLs acquired in the Sustainalytics acquisition.
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 $8.8 million of the non-U.S. NOLs, reflecting the likelihood that the benefit of these NOLs will not be realized.