FORWARD-LOOKING STATEMENTS
This Form 10-K contains forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. These forward-looking statements are based on current expectations and assumptions and involve risks and uncertainties, including, among other things, statements regarding our expectations about (i) the impact from the effects of the COVID-19 pandemic, (ii) revenue growth in 2022, (iii) continued growth in registrations in the domain name base in 2022, (iv) cost of revenues, sales and marketing expenses, research and development expenses, general and administrative expenses, interest expense, and non-operating income, net, in 2022, (v) our effective tax rate for 2022, (vi) the sufficiency of our existing cash, cash equivalents and marketable securities, and funds generated from operations, together with our ability to arrange for additional financing, (vii) cash paid for income taxes in 2022, and (viii) our planned property and equipment expenditures for 2022. Forward-looking statements include, among others, those statements including the words "expects," "anticipates," "intends," "believes" and similar language. Our actual results may differ significantly from those projected in the forward-looking statements. Factors that might cause or contribute to such differences include, but are not limited to, those discussed in the section titled "Risk Factors" in Part I, Item 1A of this Form 10-K. You should also carefully review the risks described in other documents we file from time to time with theSEC , including the Quarterly Reports on Form 10-Q or Current Reports on Form 8-K that we file in 2022. You are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date of this Form 10-K. We undertake no obligation to update publicly or revise such statements, whether as a result of new information, future events, or otherwise, except as required by law. This section of this Form 10-K generally discusses 2021 and 2020 items and year-to-year comparisons between 2021 and 2020. Discussions of 2019 items and year-to-year comparisons between 2020 and 2019 that are not included in this Form 10-K can be found in "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year endedDecember 31, 2020 .
Overview
We are a global provider of domain name registry services and internet infrastructure, enabling internet navigation for many of the world's most recognized domain names. We enable the security, stability, and resiliency of key internet infrastructure and services, including providing root zone maintainer services, operating two of the 13 global internet root servers, and providing registration services and authoritative resolution for the .com and .net top-level domains, which support the majority of global e-commerce. As ofDecember 31, 2021 , we had approximately 173.4 million .com and .net registrations in the domain name base. The number of domain names registered is largely driven by continued growth in online advertising, e-commerce, and the number of internet users, which is partially driven by greater availability of internet access, as well as marketing activities carried out by us and our registrars. Growth in the number of domain name registrations under our management may be hindered by certain factors, including overall economic conditions, competition from ccTLDs, other gTLDs, services that offer alternatives for an online presence, such as social media, and ongoing changes in the internet practices and behaviors of consumers and businesses. Factors such as the evolving practices and preferences of internet users, and how they navigate the internet, as well as the motivation of domain name registrants and how they will manage their investment in domain names, can negatively impact our business and the demand for new domain name registrations and renewals.
2021 Business Highlights and Trends
•We recorded revenues of
of 5% compared to 2020.
•We recorded operating income of
increase of 5% as compared to 2020.
•We finished 2021 with 173.4 million .com and .net registrations in the domain
name base, which represents a 5% increase from
•During 2021, we processed 44.6 million new domain name registrations
for .com and .net compared to 42.4 million in 2020.
•The final .com and .net renewal rate for the third quarter of 2021 was 75.0%
compared to 73.7% for the same quarter of 2020. Renewal rates are not fully
measurable until 45 days after the end of the quarter.
•We repurchased 3.3 million shares of our common stock for an aggregate cost of
remaining for future share repurchases under the share repurchase program.
23 -------------------------------------------------------------------------------- Table of Contents •EffectiveFebruary 10, 2022 , our Board of Directors authorized the repurchase of our common stock in the amount of$705.4 million , in addition to the$294.6 million that remained available for repurchases under the share repurchase program, for a total repurchase authorization of up to$1.0 billion under the program.
•We generated cash flows from operating activities of
which represents an increase of 11% as compared to 2020.
•During the fourth quarter of 2021, we recognized a deferred income tax benefit
of
property between subsidiaries.
•OnJune 8, 2021 , we issued$750.0 million of 2.700% Senior Notes dueJune 15, 2031 ("2031 Notes"). OnJune 23, 2021 , we used the net proceeds from the 2031 Notes, along with cash on hand, to redeem all of our$750.0 million aggregate principal amount of outstanding 4.625% Senior Notes due 2023 ("2023 Notes").
•On
registry-level wholesale fee for each new and renewal .com domain name
registration from
COVID-19 Update
The United States and the global community we serve are facing unprecedented challenges posed by the COVID-19 pandemic. In response to the pandemic, we have established a task force to monitor the pandemic and have taken a number of actions to protect our employees, including restricting travel, modifying our sick leave policy to encourage quarantine and isolation when warranted, and directing most of our employees to work from home. We have implemented our readiness plans, which include the ability to maintain critical internet infrastructure with most employees working remotely. We believe that the effects of the pandemic to date have led to an increase in the demand for domain names, particularly as businesses and entrepreneurs have been seeking to establish or expand their presence online in response to the pandemic. Our revenues continued to grow during 2020 and 2021 primarily driven by an increase in the domain name base for the .com TLD; however, the situation remains uncertain and hard to predict. The broader implications of the pandemic on our business and operations and our financial results, including the extent to which the effects of the pandemic will impact future growth in the domain name base, remain uncertain. The duration and severity of the economic disruptions from the pandemic may ultimately result in negative impacts on our business and operations, results of operations, financial condition, cash flows, liquidity and capital and financial resources. For further discussion, see "Risk Factors - The effects of the COVID-19 pandemic have impacted how we operate our business, and the extent to which the effects of the pandemic will impact our business, operations, financial condition and results of operations remains uncertain" in Part I, Item 1A of this Form 10-K.
Critical Accounting Estimates
The discussion and analysis of our financial condition and results of operations are based upon our Consolidated Financial Statements, which have been prepared in accordance withU.S. generally accepted accounting principles. The preparation of these financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities. On an ongoing basis, management evaluates those estimates. Management bases its estimates on historical experience and on various assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily available from other sources. Actual results may differ from these estimates under different assumptions or conditions. Critical accounting estimates are those estimates made in accordance with generally accepted accounting principles that involve a significant level of estimation uncertainty and have had or are reasonably likely to have a material impact on the financial condition or results of operations of the registrant. We believe the following critical accounting estimates and policies have the most significant impact on our consolidated financial statements:
Income taxes
We operate in multiple tax jurisdictions inthe United States and internationally. Tax laws and regulations in these jurisdictions are complex, interrelated, and periodically changing. Significant judgment or interpretation of these laws and regulations is often required in determining our worldwide provision for income taxes, including, for example, the calculations of taxable income in each jurisdiction, deferred taxes, and the availability and amount of deductions and tax credits. The final taxes payable are also dependent upon many factors, including negotiations with taxing authorities in various jurisdictions and resolution of disputes arising from various tax examinations. We only recognize or continue to recognize tax positions and tax benefit amounts that are more likely than not to be sustained upon examination. We adjust these amounts in light of changing facts and circumstances; however, due to the complexity of some of these uncertainties, the ultimate resolution may result in an outcome that is materially different from our current estimate of unrecognized tax benefits. See Note 10, "Income Taxes" of our Notes to Consolidated Financial Statements in Item 8 of this Form 10-K for further discussion of the$165.5 million 24
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deferred tax asset and corresponding income tax benefit recognized in the fourth quarter of 2021 and the$204.2 million income tax benefit recognized in 2020 as a result of the remeasurement of certain previously unrecognized income tax benefits.
Results of Operations
The following table presents information regarding our results of operations as
a percentage of revenues:
Year Ended December 31,
2021 2020 2019
Revenues 100.0 % 100.0 % 100.0 %
Costs and expenses:
Cost of revenues 14.5 14.2 14.6
Sales and marketing 3.0 2.9 3.8
Research and development 6.1 5.9 4.9
General and administrative 11.1 11.8 11.2
Total costs and expenses 34.7 34.8 34.5
Operating income 65.3 65.2 65.5
Interest expense (6.3) (7.1) (7.4)
Non-operating (loss) income, net (0.1) 1.2 3.5
Income before income taxes 58.9 59.3 61.6
Income tax benefit (expense) 0.2 5.1 (11.9)
Net income 59.1 % 64.4 % 49.7 %
Revenues
Our revenues are primarily derived from registrations for domain names in the
.com and .net domain name registries. We also derive revenues from operating
domain name registries for several other TLDs and from providing back-end
registry services to a number of TLD registry operators, all of which are not
significant in relation to our consolidated revenues. For domain names
registered in the .com and .net registries we receive a fee from registrars per
annual registration that is determined pursuant to our agreements with ICANN.
Individual customers, called registrants, contract directly with registrars or
their resellers, and the registrars in turn register the domain names with
Verisign . Changes in revenues are driven largely by changes in the number of new
domain name registrations and the renewal rate for existing registrations as
well as the impact of new and prior price increases, to the extent permitted by
ICANN and the DOC. New registrations and the renewal rate for existing
registrations are impacted by continued growth in online advertising,
e-commerce, and the number of internet users, as well as marketing activities
carried out by us and our registrars. We also offer promotional incentive-based
discount programs to registrars based upon market conditions and the business
environment in which the registrars operate.
On October 26, 2018 , Verisign and the DOC amended the Cooperative Agreement. The
amendment, among other items, extends the term of the Cooperative Agreement
until November 30, 2024 and permits the price of a .com domain name to be
increased, subject to appropriate changes to the .com Registry Agreement,
without further DOC approval, by up to 7% in each of the final four years of
each six-year period beginning on October 26, 2018 . On March 27, 2020 , Verisign
and ICANN agreed to an amendment to the .com Registry Agreement that, among
other items, incorporates these changes agreed to with the DOC to the pricing
terms. Effective September 1, 2021 , we increased the annual registry-level
wholesale fee for each new and renewal .com domain name registration from $7.85
to $8.39 . On February 10, 2022 , we announced that we will increase the annual
registry-level wholesale fee for each new and renewal .com domain name
registration from $8.39 to $8.97 , effective September 1, 2022 . We have the
contractual right to increase the fees for .net domain name registrations by up
to 10% each year during the term of our agreement with ICANN, through June 30,
2023 . All fees paid to us for .com and .net registrations are in U.S. dollars.
A comparison of revenues is presented below:
Year Ended December 31,
% %
2021 Change 2020 Change 2019
(Dollars in thousands)
Revenues $ 1,327,576 5 % $ 1,265,052 3 % $ 1,231,661
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The following table compares the .com and .net domain name registrations in the
domain name base:
As of December 31,
% %
2021 Change 2020 Change 2019
.com and .net domain name registrations in the
domain name base 173.4 million 5 % 165.2 million 4 % 158.8 million
Growth in the domain name base has been primarily driven by continued internet
growth and marketing activities carried out by us and our registrars. However,
competitive pressure from ccTLDs, other gTLDs, services that offer alternatives
for an online presence, such as social media, ongoing changes in internet
practices and behaviors of consumers and business, as well as the motivation of
existing domain name registrants managing their investment in domain names, and
historical global economic uncertainty, has limited the rate of growth of the
domain name base in the past and may continue to do so in the future.
Revenues increased by $62.5 million in 2021 compared to 2020, primarily due to
an increase in revenues from the operation of the registry for the .com TLD
driven by a 5% increase in the domain name base for .com and the price increase
which became effective September 1, 2021 .
Geographic revenues
We generate revenues in theU.S. ;Europe , theMiddle East andAfrica ("EMEA");China ; and certain other countries, includingCanada ,Australia andJapan . The following table presents a comparison of the Company's geographic revenues: Year Ended December 31, % % 2021 Change 2020 Change 2019 (Dollars in thousands) U.S$ 851,299 6 %$ 804,647 4 %$ 772,586 EMEA 231,686 8 % 214,204 3 % 206,975 China 99,727 (12) % 113,048 (5) % 119,291 Other 144,864 9 % 133,153 - % 132,809 Total revenues$ 1,327,576 5 %$ 1,265,052 3 %$ 1,231,661 Revenues in the table above are attributed to the country of domicile and the respective regions in which our registrars are located; however, this may differ from the regions where the registrars operate or where registrants are located. Revenue growth for each region may be impacted by registrars reincorporating, relocating, or from acquisitions or changes in affiliations of resellers. Revenue growth for each region may also be impacted by registrars domiciled in one region, registering domain names in another region. Revenues increased during 2021 in all regions exceptChina . Revenues from registrars based inChina declined during 2021 as a result of lower new registrations and renewal rates in the country.
We expect revenues to continue to grow in 2022, as a result of continued growth
in the aggregate number of .com domain names and the impact of the price
increase for .com domain names which became effective
Cost of revenues
Cost of revenues consist primarily of salaries and employee benefits expenses for our personnel who manage the operational systems, depreciation expenses, operational costs associated with the delivery of our services, fees paid to ICANN, customer support and training, costs of facilities and computer equipment used in these activities, telecommunications expense and allocations of indirect costs such as corporate overhead.
A comparison of cost of revenues is presented below:
Year Ended December 31,
% %
2021 Change 2020 Change 2019
(Dollars in thousands)
Cost of revenues $ 191,933 7 % $ 180,177 - % $ 180,467
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Cost of revenues increased by$11.8 million in 2021 compared to 2020 primarily due to increases in direct cost of revenues, allocated overhead expenses and depreciation expenses. Direct cost of revenues increased by$5.7 million primarily due to an increase in registry fees payable to ICANN in connection with the operation of the registry for the .com TLD. Allocated overhead expenses increased by$2.4 million due to an increase in total allocable expenses. Depreciation expenses increased by$1.9 million as a result of increased investments in our data centers and network infrastructure.
We expect cost of revenues as a percentage of revenues to remain consistent in
2022 as compared to 2021.
Sales and marketing
Sales and marketing expenses consist primarily of salaries and other personnel-related expenses, travel and related expenses, trade shows, costs of computer and communications equipment and support services, facilities costs, consulting fees, costs of marketing programs, such as online, television, radio, print and direct mail advertising costs, and allocations of indirect costs such as corporate overhead.
A comparison of sales and marketing expenses is presented below:
Year Ended December 31,
% %
2021 Change 2020 Change 2019
(Dollars in thousands)
Sales and marketing
Sales and marketing expenses increased by$3.1 million in 2021 compared to 2020 primarily due to a$2.6 million increase in salary and employee benefits expenses as a result of an increase in average headcount and higher expenses for salaries and certain employee related benefits.
We expect sales and marketing expenses as a percentage of revenues to remain
consistent in 2022 as compared to 2021.
Research and development
Research and development expenses consist primarily of costs related to research and development personnel, including salaries and other personnel-related expenses, consulting fees, facilities costs, computer and communications equipment, support services used in our service and technology development, and allocations of indirect costs such as corporate overhead.
A comparison of research and development expenses is presented below:
Year Ended December 31,
% %
2021 Change 2020 Change 2019
(Dollars in thousands)
Research and development $ 80,529 8 % $ 74,671 23 % $ 60,805
Research and development expenses increased by
2020 due to an increase in salary and employee benefits expenses, including
stock-based compensation, and a combination of individually insignificant
factors. Salary and employee benefits expenses, including stock-based
compensation, increased by
headcount and higher expenses for salaries and certain employee related
benefits.
We expect research and development expenses as a percentage of revenues to
remain consistent in 2022 as compared to 2021.
General and administrative
General and administrative expenses consist primarily of salaries and other
personnel-related expenses for our executive, administrative, legal, finance,
information technology and human resources personnel, costs of facilities,
computer and communications equipment, management information systems, support
services, professional services fees, and certain tax and license fees, offset
by allocations of indirect costs such as facilities and shared services expenses
to other cost types.
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A comparison of general and administrative expenses is presented below:
Year Ended December 31,
% %
2021 Change 2020 Change 2019
(Dollars in thousands)
General and administrative
General and administrative expenses decreased by$0.8 million in 2021 compared to 2020 primarily due to decreases in professional services expenses and charitable contributions and an increase in overhead expenses allocated to other cost types, partially offset by increases in salary and employee benefits expenses, equipment and software expenses, and stock-based compensation expenses. Professional services expenses decreased by$6.0 million due to a decrease in external consulting costs on various projects. Overhead expenses allocated to other cost types increased by$5.0 million due to an increase in the total allocable expenses. Charitable contributions decreased by$1.6 million due to greater contributions made during 2020 to help with immediate COVID-related hardship and to support social justice efforts, compared to contributions made during 2021. Salary and employee benefits expenses increased by$4.7 million due to an increase in average headcount and higher expenses for certain employee health insurance related benefits. Equipment and software expenses increased by$5.5 million due to expenses related to network security and other software services. Stock-based compensation expenses increased by$3.0 million due to higher achievement levels on certain performance-based RSU grants and increases in the total value of RSUs granted in 2021.
We expect general and administrative expenses as a percentage of revenues to
remain consistent in 2022 as compared to 2021.
Interest expense
Interest expense decreased by$6.9 million in 2021 compared to 2020 due to the lower interest rate on our 2031 Notes compared to the 2023 Notes which were redeemed inJune 2021 . We expect interest expense to decrease in 2022 due to the lower interest rate on our 2031 Notes compared to the 2023 Notes.
Non-operating loss, net
See Note 9, "Non-operating (Loss) Income, Net" of our Notes to Consolidated
Financial Statements in Item 8 of this Form 10-K. We expect Non-operating loss,
net to decrease in 2022 as compared to 2021 due to the loss on extinguishment of
debt recognized in 2021.
Income tax (benefit) expense
Year Ended December 31,
2021 2020 2019
(Dollars in thousands)
Income tax (benefit) expense (2,611) $ (64,644) $ 146,477
Effective tax rate - % (9) % 19 %
The effective tax rate for each of the periods in the table above differed from
the statutory federal rate of 21% due to a lower foreign effective tax rate,
offset by state income taxes and U.S. taxes on foreign earnings, net of foreign
tax credits. Additionally, during 2021, we completed a transfer of intellectual
property between certain non-U.S. subsidiaries. This intellectual property did
not have any book value, however the transfer created an amortizable tax basis
that resulted in the recognition of a $165.5 million deferred tax asset and a
corresponding income tax benefit.
During 2020, we recognized an income tax benefit of $204.2 million as a result
of the remeasurement of certain previously unrecognized income tax benefits. The
majority of this tax benefit related to the worthless stock deduction taken in
2013. These remeasurements were based on written confirmations from Internal
Revenue Service ("IRS"), received in 2020, indicating no examination adjustments
would be proposed related to the worthless stock deduction or certain other
matters reviewed as part of the audit of our federal income tax returns for 2010
through 2014, and the lapse of statutes of limitations related to other
unrecognized income tax benefits. Notwithstanding these written confirmations,
our U.S. federal income tax returns for 2010 through 2014 remain under
examination by the IRS .
As of December 31, 2021 , we had deferred tax assets arising from deductible
temporary differences, tax losses, and tax credits of $238.5 million , net of
valuation allowances, but before the offset of certain deferred tax liabilities.
With the exception of
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deferred tax assets related to certain state and foreign net operating loss and foreign tax credit carryforwards, we believe it is more likely than not that the tax effects of the deferred tax liabilities, together with future taxable income, will be sufficient to fully recover the remaining deferred tax assets.
We expect the effective tax rate for 2022 to be between 21% and 24%.
Liquidity and Capital Resources
The following table presents our principal sources of liquidity:
As of December 31,
2021 2020
(In thousands)
Cash and cash equivalents $ 223,487 $ 401,194
Marketable securities 982,318 765,713
Total $ 1,205,805 $ 1,166,907
The marketable securities consist primarily of debt securities issued by the
U.S. Treasury meeting the criteria of our investment policy, which is focused on
the preservation of our capital through investment in investment grade
securities. The cash equivalents consist of amounts invested in money market
funds, time deposits and U.S. Treasury bills purchased with original maturities
of three months or less. As of December 31, 2021 , all of our debt securities
have contractual maturities of less than one year. Our cash and cash equivalents
are readily accessible. For additional information on our investment portfolio,
see Note 2, "Financial Instruments," of our Notes to Consolidated Financial
Statements in Item 8 of this Form 10-K.
In 2021, we repurchased 3.3 million shares of our common stock at an average
stock price of $215.16 for an aggregate cost of $700.0 million under our share
repurchase program. In 2020, we repurchased 3.7 million shares of our common
stock at an average stock price of $200.06 for an aggregate cost of $734.9
million . Effective February 10, 2022 , our Board of Directors authorized the
repurchase of our common stock in the amount of $705.4 million , in addition to
the $294.6 million that remained available for repurchases under the share
repurchase program, for a total repurchase authorization of up to $1.0 billion
under the program.
On June 8, 2021 , we issued $750.0 million of 2.700% senior unsecured notes due
June 15, 2031 . On June 23, 2021 , we used the net proceeds from the 2031 Notes,
along with cash on hand, to redeem all of our $750.0 million aggregate principal
amount of outstanding 4.625% senior notes due 2023. As of December 31, 2021 , we
also had $550.0 million principal amount outstanding of 4.75% senior unsecured
notes due 2027 and $500.0 million principal amount outstanding of 5.25% senior
unsecured notes due 2025. As of December 31, 2021 , there were no borrowings
outstanding under our $200.0 million credit facility that will expire in 2024.
We believe existing cash, cash equivalents and marketable securities, and funds
generated from operations, together with our ability to arrange for additional
financing should be sufficient to meet our working capital, capital expenditure
requirements, and to service our debt for the next 12 months and beyond. We
regularly assess our cash management approach and activities in view of our
current and potential future needs. Our most significant future cash
requirements include interest and principal payments on the senior notes
issuances described above, income tax payments, purchase obligations and
registry fees related to the operation of certain top-level domains. These items
are detailed in Note 11, "Commitments and Contingencies" of our Notes to
Consolidated Financial Statements in Item 8 of this Form 10-K.
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In summary, our cash flows for 2021, 2020, and 2019 were as follows:
Year Ended December 31,
2021 2020 2019
(In thousands)
Net cash provided by operating activities $ 807,152 $ 730,183 $ 753,892
Net cash (used in) provided by investing activities (269,246) (72,258) 167,195
Net cash used in financing activities (719,130)
(764,877) (770,303)
Effect of exchange rate changes on cash, cash equivalents and
restricted cash
(561) (48) 64
Net (decrease) increase in cash, cash equivalents and
restricted cash
$ (181,785)
Cash flows from operating activities
Our largest source of operating cash flows is cash collections from our customers. Our primary uses of cash from operating activities are for personnel related expenditures, and other general operating expenses, as well as payments related to taxes, interest and facilities. Net cash provided by operating activities increased in 2021 compared to 2020 primarily due to an increase in cash received from customers, partially offset by increases in cash paid for income taxes, cash paid to employees and vendors, and decreases in cash received from interest on investments and from transition services. Cash received from customers increased primarily due to higher domain name registrations and renewals and the impact of the .com price increase which became effectiveSeptember 1, 2021 . The increased volume of renewal transactions was due in part to early renewal transactions before the .com price increase became effective. Cash paid for income taxes increased primarily due to comparatively higher federal, state, and foreign taxes. Cash paid to employees and vendors increased primarily due to the timing of payments and an increase in operating expenses. Cash received from interest on investments decreased due to a decline in interest rates. Cash received from transition services decreased due to the expiration of the transition services agreement related to our divested security services business inFebruary 2020 .
Cash flows from investing activities
The changes in cash flows from investing activities primarily relate to
purchases, maturities and sales of marketable securities, purchases of property
and equipment and the sale of businesses.
Net cash used in investing activities increased in 2021 compared to 2020
primarily due to an increase in purchases of marketable securities and
investments, net of proceeds from maturities and sales of marketable securities
and investments, an increase in purchases of property and equipment, and
payments received during 2020 related to our divested security services
business.
Cash flows from financing activities
The changes in cash flows from financing activities primarily relate to share repurchases, proceeds from borrowings, repayment of borrowings, and our employee stock purchase plan. Net cash used in financing activities decreased in 2021 compared to 2020 primarily due to proceeds received from the issuance of the 2031 Notes and a decrease in share repurchases, partially offset by the redemption of our 2023 Notes. Income taxes
We expect cash paid for income taxes as a percentage of pre-tax income to be
between 21% and 24% in 2022.
Property and Equipment Expenditures
Our planned property and equipment expenditures for 2022 are anticipated to be
between
infrastructure upgrades software enhancements.
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Dilution from RSUs
Grants of stock-based awards are key components of the compensation packages we provide to attract and retain certain of our employees and align their interests with the interests of existing stockholders. We recognize that these stock-based awards dilute existing stockholders and have sought to control the number granted while providing competitive compensation packages. As ofDecember 31, 2021 , there were a total of 0.6 million unvested RSUs which represent potential dilution of less than 1.0%. This maximum potential dilution will only result if all outstanding RSUs vest and are settled. In recent years, our stock repurchase program has more than offset the dilutive effect of RSU grants to employees; however, we may reduce the level of our stock repurchases in the future as we may use our available cash for other purposes.
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