XML 115 R13.htm IDEA: XBRL DOCUMENT v2.4.0.8
Income Taxes
6 Months Ended
Jun. 30, 2013
Income Tax Disclosure [Abstract]  
Income Taxes
Income Taxes
We utilize our estimated annual effective tax rate to determine our provision for income taxes for interim periods. The income tax provision is computed by taking the estimated annual effective tax rate and multiplying it by the year-to-date pre-tax book income. We recorded income tax expense of $2.5 million and $1.1 million for the three months ended June 30, 2013 and 2012, respectively. Our effective tax rate was 30.0% and 18.1% during the three months ended June 30, 2013 and 2012, respectively. The increase in our effective tax rate was due to the following: the recording of approximately $0.4 million of additional tax reserves in the second quarter of 2013 resulting from a tax audit in Hong Kong for years preceding our acquisition of Enson Assets Limited; a greater percentage of income earned in higher tax rate jurisdictions in 2013 compared to 2012; and the reversal of $0.3 million of unrecognized tax benefits in the second quarter of 2012 which were originally recorded in 2007, 2010 and 2011.
We recorded income tax expense of $2.9 million and $1.5 million for the six months ended June 30, 2013 and 2012, respectively. Our effective tax rate was 24.9% and 17.7% during the six months ended June 30, 2013 and 2012, respectively. The increase in our effective tax rate was due to the following: the recording of approximately $0.4 million of additional tax reserves in the second quarter of 2013 resulting from a tax audit in Hong Kong for years preceding our acquisition of Enson Assets Limited; a greater percentage of income earned in higher tax rate jurisdictions in 2013 compared to 2012; and the reversal of $0.5 million of unrecognized tax benefits in 2012 which were originally recorded in 2007 through 2011.
On June 30, 2013, we had gross unrecognized tax benefits of approximately $5.5 million, including interest and penalties, of which approximately $5.0 million would affect the annual effective tax rate if these tax benefits are realized. Further, we are unaware of any positions for which it is reasonably possible that the total amount of unrecognized tax benefits will significantly increase within the next twelve months. However, based on federal, state and foreign statute expirations in various jurisdictions, we anticipate a decrease in unrecognized tax benefits of approximately $0.1 million within the next twelve months.
We have elected to classify interest and penalties as a component of tax expense. Accrued interest and penalties of $0.5 million and $0.1 million on June 30, 2013 and December 31, 2012, respectively, are included in our unrecognized tax benefits.
We file income tax returns in the U.S. federal jurisdiction, and in various state and foreign jurisdictions. On June 30, 2013, the open statutes of limitations in our significant tax jurisdictions were as follows: federal 2009 through 2012, state 2008 through 2012, and non-U.S. 2006 through 2012. On June 30, 2013, of our gross unrecognized tax benefits of $5.5 million, which included $0.5 million of interest and penalties, $3.6 million are classified as current and $1.9 million are classified as long term.