Income Tax (Tables)

12 Months Ended

Dec. 31, 2019

Components of Income Tax Expense (Benefit)

The components of income tax expense consisted of the following:



	Years ended December 31,
(In thousands)	2019			2018			2017
Current tax provision	$	19,366		$	17,207		$	9,086
Deferred tax benefit	(6,391		)	(4,611		)	(4,306		)
Income tax expense	$	12,975		$	12,596		$	4,780

Segregation of Income Tax Expense (Benefit) Based on Location of Operations

The following table presents the segregation of income tax expense based on location of operations:



	Years ended December 31,
(In thousands)	2019			2018			2017
Income before income tax provision
Puerto Rico	$	89,667		$	77,176		$	47,347
United States	4,047			3,199			3,089
Foreign countries	22,961			18,790			9,763
Total income before income tax provision	$	116,675		$	99,165		$	60,199
Current tax provision
Puerto Rico	$	7,550		$	6,841		$	1,892
United States	339			599			292
Foreign countries	11,477			9,767			6,902
Total current tax provision	$	19,366		$	17,207		$	9,086
Deferred tax benefit
Puerto Rico	$	(4,109	)	$	(2,904	)	$	(3,176	)
United States	(216		)	(584		)	(184		)
Foreign countries	(2,066		)	(1,123		)	(946		)
Total deferred tax benefit	$	(6,391	)	$	(4,611	)	$	(4,306	)

Components of Deferred Tax Assets and Liabilities

The following table presents the components of the Company’s deferred tax assets and liabilities:



	December 31,
(In thousands)	2019			2018
Deferred tax assets (“DTA”)
Allowance for doubtful accounts	$	271		$	170
Unearned income	6,807			4,394
Investment in equity subsidiary	51			220
Share-based compensation	1,222			1,684
Debt issuance costs	249			309
Accrued liabilities	1,034			1,257
Derivative liability	1,220			351
Accrual of contract maintenance cost	134			157
Impairment of asset	289			289
Other	1,546			1,976
Total gross deferred tax assets	12,823			10,807
Deferred tax liabilities (“DTL”)
Capitalized salaries	1,828			1,756
Derivative asset	—			185
Difference between the assigned values and the tax basis of assets and liabilities recognized in business combinations	12,568			16,240
Other	557			659
Total gross deferred tax liabilities	14,953			18,840
Deferred tax liability, net	$	(2,130	)	$	(8,033	)

Reconciliation of Total Amounts of Unrecognized Tax Benefits

The following is a tabular reconciliation of the total amounts of UTPs:



	Years ended December 31,
(In thousands)	2019			2018			2017
Balance, beginning of year	$	9,238		$	9,148		$	12,219
Gross increases—tax positions in prior period	—			578			—
Gross decreases—tax positions in prior period	(92		)	(488		)	—
Lapse of statute of limitations	—			—			(3,071		)
Balance, end of year	$	9,146		$	9,238		$	9,148

Income Tax Expense Differs from Computed Income Tax at Statutory Rates

The income tax expense differs from the amount computed by applying the Puerto Rico statutory income tax rate to the income before income taxes as a result of the following:



	Years ended December 31,
(In thousands)	2019			2018			2017
Computed income tax at statutory rates	$	43,753		$	38,674		$	23,477
Benefit of net tax-exempt interest income	(126		)	(50		)	(56		)
Differences in tax rates due to multiple jurisdictions	1,058			(678		)	2,353
Tax (benefit) expense due to a change in estimate	(84		)	467			(334		)
Effect of income subject to tax-exemption grant	(31,424		)	(26,260		)	(16,832		)
Unrecognized tax (benefit) expense	(32		)	443			(3,828		)
Other	(170		)	—			—
Income tax expense	$	12,975		$	12,596		$	4,780