Note 12 - Income Taxes

12 Months Ended

Dec. 31, 2014

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

(12)           Income Taxes

The components of the expense (benefit) for income taxes for the years ended December 31, 2012, 2013 and 2014 were as follows (in thousands):

	December 31,
	2012			2013			2014
Current:
Federal	$	6,719		$	5,145		$	16,081
State		2,547			1,340			2,131
Foreign		3,949			6,180			5,769
		13,215			12,665			23,981
Deferred:
Federal		(13,285	)		(10,026	)		(13,175	)
State		(2,857	)		(2,156	)		(1,291	)
Foreign		(5,059	)		(5,839	)		(5,080	)
Total		(21,201	)		(18,021	)		(19,546	)
Expense (Benefit) for income taxes	$	(7,987	)	$	(5,356	)	$	4,435

Deferred taxes result from temporary differences between the bases of assets and liabilities for financial reporting purposes and such amounts as measured by tax laws and regulations. The sources of the temporary differences and their effect on deferred tax assets and liabilities as of December 31, 2013 and 2014 were as follows (in thousands):

	December 31,
	2013						2014
	Current			Noncurrent			Current			Noncurrent
Deferred tax assets:
Allowance for doubtful accounts	$	2,784		$	—		$	3,607		$	—
Basis difference of intangible assets		—			6,220			—			7,623
Net operating loss carryforwards		—			489			—			2,334
Share-based compensation		—			10,930			—			10,462
Foreign currency translation		—			4,221			—			7,805
Tax credits		—			—			—			683
Other deferred tax assets		476			991			816			1,087
Total deferred tax assets		3,260			22,851			4,423			29,994
Deferred tax liabilities:
Basis difference of property and equipment		—			(1,194	)		—			(227	)
Cash to accrual adjustments		(2,426	)		(166	)		(166	)		—
Other deferred tax liabilities		(401	)		—			(481	)		(85	)
Total deferred tax liabilities		(2,827	)		(1,360	)		(647	)		(312	)
Net deferred tax assets	$	433		$	21,491		$	3,776		$	29,682

The reconciliation of income tax computed at the U.S. federal statutory rate to income tax expense (benefit) for the years ended December 31, 2012, 2013 and 2014 were as follows (in thousands):

	December 31,
	2012			2013			2014
Expected tax expense (benefit)	$	(8,024	)	$	(5,450	)	$	5,225
Increase (decrease) in income taxes resulting from:
State income taxes, net of federal benefit		(770	)		(694	)		712
Non-deductible items		274			240			896
Foreign tax rates		551			433			(2,587	)
Other		(18	)		115			189
Income tax expense (benefit)	$	(7,987	)	$	(5,356	)	$	4,435

For the year ended December 31, 2012, the Company generated $30.8 million of U.S. federal taxable income and utilized $12.9 million in NOLs from the 2011 year.  For the year ended December 31, 2012 the Company utilized AMT credits of $171,000 to offset its U.S. federal tax liabilities. During the year ended December 31, 2012, the Company generated an additional $3.1 million in foreign tax credits related to income taxes payable at certain of its businesses located in the U.K. and Australia and utilized $2.7 million in foreign tax credits to offset its current tax liability.  Additionally, in 2012 the Company utilized $7.9 million of option related tax benefits, and reduced its income taxes payable by $2.9 million, for excess tax benefits, of which was recorded to additional paid in capital. 

For the year ended December 31, 2013, the Company generated $30.2 million of U.S. federal taxable income and utilized $1.4 million in acquired NOLs from the 2012 year.  Additionally, during the year ended December 31, 2013, the Company generated an additional $3.6 million in foreign tax credits related to income taxes payable at certain of its businesses located in the U.K. and Australia and utilized $3.3 million in foreign tax credits to offset its current tax liability.  Additionally, in 2013 the Company utilized $19.2 million of option related tax benefits, reducing its income taxes payable by $7.6 million, for excess tax benefits, which was recorded to additional paid in capital.

For the year ended December 31, 2014, the Company generated an estimated $41.2 million of U.S. federal taxable income and utilized $1.5 million of acquired net operating losses.  Additionally, during the year ended December 31, 2014, the Company generated an additional estimated $6.0 million in foreign tax credits related to income taxes payable at certain of its businesses located in the U.K. and Australia all of which were used to offset its current tax liability.  Additionally, in 2014 the Company utilized $39.5 million of option related tax benefits, reducing its income taxes payable by $15.6 million, for excess tax benefits, $9.3 million of  which was recorded to additional paid in capital and the remainder, $6.3 million is in a suspended APIC pool. As of December 31, 2014, the Company had $11.3 million in state NOLs, which expire between 2028 and 2033, and $3.3 million in foreign NOLs, which expire between 2029 and 2031, to offset future taxable income. The Company completed an analysis of projected future taxable income and determined that all deferred tax assets, including net operating loss carryforwards and tax credit carryforwards are more likely than not to be realized in the foreseeable future.

As a result of certain realization requirements of ASC 718, the table of deferred tax assets and liabilities does not include certain deferred tax assets as of December 31, 2014 that arose directly from (or the use of which was postponed by) tax deductions related to equity compensation that are greater than the compensation recognized for financial reporting. Equity will be increased by $6.3 million if and when such deferred tax assets are ultimately realized. The Company uses ASC 740 ordering when determining when excess tax benefits have been realized.

The Company applies the provisions of ASC 740 as it relates to uncertain tax positions. This interpretation prescribes a comprehensive model for how a company should recognize, measure, present and disclose in its financial statements uncertain tax positions that the company has taken or expects to take on a tax return. ASC 740 states that a tax benefit from an uncertain tax position may be recognized only if it is “more likely than not” that the position is sustainable, based on its technical merits. The tax benefit of a qualifying position is the largest amount of tax benefit that is greater than 50% likely of being realized upon settlement with a taxing authority having full knowledge of all relevant information. The Company recognizes interest and penalties accrued related to unrecognized tax benefits in income tax expense.

The following table summarizes the activity related to the unrecognized tax benefits for the years ended December 31, 2013 and 2014 (in thousands): 

Balance at January 1, 2013	$	327
Increase to prior year tax positions		28
Increase to current year tax positions		—
Expiration of the statute of limitations for the assessment of taxes		—
Decrease related to settlements		—
Balance at December 31, 2013		355
Increase to prior year tax positions		1,238
Increase to current year tax positions		—
Expiration of the statute of limitations for the assessment of taxes		—
Decrease related to settlements		—
Balance at December 31, 2014	$	1,593

The Company is no longer subject to U.S. federal income or state tax return examinations by tax authorities for tax years before 2010 and 2009, respectively. The Company operates in multiple taxing jurisdictions and faces audits from various tax authorities. The Company remains subject to examination until the statute of limitations expires for the respective tax jurisdiction. The Company does not anticipate that the amount of the unrecognized benefit will significantly increase or decrease within the next 12 months.

Undistributed earnings of the Company’s foreign subsidiaries are considered indefinitely reinvested and, accordingly, no provision for U.S. federal income taxes has been recorded. The Company has not, nor does it anticipate the need to repatriate cash to the U.S. to satisfy domestic liquidity needs in the ordinary course of business, or to satisfy domestic debt service requirements. Deferred taxes are provided for earnings outside the United States when those earnings are not considered indefinitely reinvested.