Income Taxes (Tables)

12 Months Ended

Dec. 31, 2018

Income Taxes

Schedule of Income Before Provision for Income Taxes

“Income before provision for income taxes” as shown in the accompanying Consolidated Statements of Income is comprised of the following (in thousands):

	Year Ended December 31,
			2017		2016
	2018		As Adjusted*		As Adjusted*
Domestic	$	52,798	$	77,346	$	50,145
Foreign		13,366		11,516		11,870
Total	$	66,164	$	88,862	$	62,015

*See Note 3, Revenue for more information.

Schedule of Components of Provision for Income Taxes

Components of the “Provision for income taxes” in the accompanying Consolidated Statements of Income consist of the following (in thousands):

	Year Ended December 31,
			2017		2016
	2018		As Adjusted*		As Adjusted*
Current
Federal	$	1,730	$	3,568	$	8,002
Foreign		3,818		4,345		2,855
State and local		699		1,169		943
Total current expense		6,247		9,082		11,800
Deferred expense
Federal		8,829		47,073		2,992
Foreign		12		323		137
State and local		711		569		238
Total deferred expense		9,552		47,965		3,367
Provision for income taxes	$	15,799	$	57,047	$	15,167

*See Note 3, Revenue for more information.

Schedule of Reconciliation of U.S. Statutory Income Tax Rate to Company's Effective Tax Rate

	Year Ended December 31,
			2017		2016
	2018		As Adjusted*		As Adjusted*
U.S. statutory tax rate	21.0	%	35.0	%	35.0	%
Increase due to state and local taxes, net of federal benefit	3.1		2.6		2.6
Non-creditable foreign taxes	1.2		-		-
Foreign derived intangible income deduction	(1.3)		-		-
Income attributable to non-controlling interests	(7.3)		(12.5)		(14.1)
Other	(0.8)		(0.8)		1.0
Subtotal	15.9		24.3		24.5
Impact of TRA adjustment on NCI (a)	0.7		4.5		-
Effect of permanent difference - TRA adjustment (b)	(2.2)		(13.6)		-
Tax Reform Rate Change (c)	-		49.0		-
Valuation allowance recognized on tax basis step-ups	9.5		-
	23.9	%	64.2	%	24.5	%

*See Note 3, Revenue for more information.

(a) Reflects additional impact of non-controlling interest adjustment being on a larger base of income that includes the gain on reduction in TRA liability.

(b) Reflects the impact of gain on TRA liability reduction, which is not taxable.

(c) Reflects reduction in deferred tax assets and resulting increase in deferred tax expense due to U.S. Federal rate declining from 35% to 21%.

Summary of Deferred Tax Assets and Liabilities

Details of the Company’s deferred tax assets and liabilities are summarized as follows (in thousands):

	As of December 31,
			2017
	2018		As Adjusted*
Long-term deferred tax assets
Goodwill, other intangibles and other assets	$	48,427	$	52,385
Imputed interest deduction pursuant to tax receivable agreements		2,719		3,052
Rent liabilities		1,845		1,878
Compensation and benefits		2,131		526
Allowance for doubtful accounts		944		834
Motto contingent liability		748		929
Deferred revenue		3,939		3,914
Foreign tax credit carryforward		1,259		—
Other		1,281		663
Total long-term deferred tax assets		63,293		64,181
Valuation allowance (a)		(7,051)		—
Total long-term deferred tax assets, net of valuation allowance		56,242		64,181
Long-term deferred tax liabilities
Property and equipment and other long-lived assets		(2,944)		(1,491)
Total long-term deferred tax liabilities		(2,944)		(1,491)
Net long-term deferred tax assets		53,298		62,690
Total deferred tax assets and liabilities	$	53,298	$	62,690

*See Note 3, Revenue for more information.

(a) Includes a valuation allowance on deferred tax assets for goodwill and intangibles in the Company’s Western Canada operations, as well as foreign tax credit carryforwards.