(9)	Income Taxes

For the years ended December 31, 2012, 2011 and 2010 net income before income taxes and non-controlling interest consisted of the following (in thousands):

	Year Ended December 31,
	2012		2011		2010
U.S. operations	$	15,595	$	21,909	$	11,276
Foreign operations		58,504		39,989		20,481
	$	74,099	$	61,898	$	31,757

Income tax expense attributable to income from operations consisted of (in thousands):

	Year Ended December 31,
	2012			2011		2010
Current
Federal	$	1,557		$	6,261	$	(607	)
State		38			29		32
Foreign		2,209			1,241		772
		3,804			7,531		197
Deferred
Federal		5,297			2,623		2,739
State		(257	)		89		92
Foreign		974			841		527
		6,014			3,553		3,358
Income tax expense	$	9,818		$	11,084	$	3,555

The reconciliations between the Company's income tax expense and the amounts computed by applying the U.S. federal income tax rate of 35.0% for the years ended December 31, 2012, 2011 and 2010 are as follows (in thousands):

	Year Ended December 31,
	2012			2011			2010
Computed expected tax expense	$	25,935		$	21,668		$	11,116
Non-deductible stock-based compensation		86			68			80
Provision to tax return true-up		(148	)		8			(261	)
Other permanent differences		1,383			920			88
Increase (release) of uncertain tax liabilities		(78	)		185			(1,919	)
Increase (decrease) in income taxes resulting from:
State income tax expense, net of federal income tax benefit		(66	)		154			321
Foreign tax differential		(17,294	)		(11,919	)		(5,870	)
	$	9,818		$	11,084		$	3,555

As of December 31, 2012 the Company had $34.6M and $7.6M of net operating loss (NOL) carry forwards available to offset future foreign and state taxable income, respectively. The NOL carry forwards will begin to expire in 2017 and 2029 for foreign and state income tax purposes, respectively.

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities as of December 31, 2012 and 2011 are presented below (in thousands):

	Year Ended December 31,
	2012		2011
Deferred tax assets:
Accounts receivable (owned fleet)	$	179	$	181
Accrued expenses and other current liabilities		78		71
State taxes		1		1
Unearned revenue		1,983		1,753
Stock-based compensation		1,540		1,214
Interest expense		6		6
Tax credits		8		161
Net operating loss carry forwards		1,562		574
Gross deferred tax assets		5,357		3,961

Deferred tax liabilities:
Intangible assets		296		527
Depreciation and amortization		36,817		30,717
Foreign deferred tax liabilities		3,222		2,937
Deferred subpart F income		2,832		1,590
Unrealized gain or (loss)		52		38
Net deferred tax liability	$	37,862	$	31,848

The realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. The Company's management considers the projected future taxable income for making this assessment. Based upon the level of historical taxable income and projections for future taxable income over the periods in which the deferred tax assets are deductible, the Company's management believes it is more likely than not the Company will realize the benefits of the deductible differences noted above.

Deferred income taxes have not been provided on the undistributed earnings of foreign subsidiaries. As of December 31, 2012, the amount of such earnings totaled approximately $126.8 million. These earnings have been permanently reinvested and the Company does not plan to initiate any action that would precipitate the payment of income taxes thereon. The amount of income taxes that would have resulted had such earnings been repatriated is not practically determinable.

The Company is required to recognize in the financial statements the impact of a tax position, if that position is more likely than not of being sustained on audit, based on the technical merits of the position. The Company has elected to record penalties and interest associated with uncertain tax position within income tax expense. The Company accrues for unrecognized tax benefits based upon its best estimate of the additional taxes, interest and penalties expected to be paid. These estimates are updated over time as more definitive information becomes available from taxing authorities, completion of tax audits, expiration of statute of limitations, or upon occurrence of other events.

The following table summarizes the activity related to the Company's unrecognized tax benefits (in thousands):

Balance at January 1, 2011	$	77
Decreases related to prior year tax positions		56
Increases related to current year tax positions		123
Balance at December 31, 2011		256
Increases related to prior year tax positions		7
Increases related to current year tax positions		31
Decreases related to lapsing of statute		(72	)
Decreases related to settlement		(40	)
Balance at December 31, 2012	$	182

The unrecognized tax benefits of approximately $0.2 million at December 31, 2012, if recognized, would reduce the Company's effective tax rate. The Company accrued potential interest and penalties of less than $0.1 million related to unrecognized tax benefits for each of the years ended December 31, 2012 and 2011. The Company does not believe the total amount of unrecognized tax benefit as of December 31, 2012 will increase or decrease significantly in the next twelve months.

The Company is subject to taxation in the U.S. and various states and foreign jurisdictions. With few exceptions, as of December 31, 2012, the Company is no longer subject to U.S. federal, state, local or foreign examinations by tax authorities for years before 2008. The Company's U.S. federal income tax returns for 2008 and 2009 are currently under examination.