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Income Taxes
3 Months Ended
Mar. 31, 2015
Income Tax Disclosure [Abstract]  
INCOME TAXES
INCOME TAXES

The income tax provision for the three months ended March 31, 2015 and 2014, as a percentage of income before taxes was 32.3% and 31.3%, respectively.

At March 31, 2015, the gross liability for uncertain tax positions was $7.9 million and the net liability, reduced for the federal effects of potential state tax exposures, was $6.2 million. If these uncertain tax positions are sustained upon tax authority audit, or otherwise become certain, a net $3.6 million would favorably affect the Company’s tax provision in such future periods. The remaining $2.6 million would increase deferred tax assets on which a valuation allowance is placed and would be expected to also increase the valuation allowance by a corresponding amount. The $3.6 million liability is included in long-term income taxes payable. The Company does not anticipate a significant change to unrecognized tax benefits for uncertain income tax positions within the next 12 months.

The Company continues to recognize interest and penalties related to unrecognized tax benefits as part of the income tax provision. At March 31, 2015 and December 31, 2014, the Company had $0.3 million and $0.3 million, respectively, accrued for interest and none accrued for penalties in both periods. These accruals are included as a component of long-term income taxes payable.

The Company is required to file U.S. federal income tax returns as well as income tax returns in various states and foreign jurisdictions. The Company may be subject to examination by the Internal Revenue Service (“IRS”) for calendar years 2010 and forward. Significant state tax jurisdictions include California and Texas, and generally, the Company is subject to routine examination for years 2008 and forward in these jurisdictions. In addition, any research and development credit carryforwards that were generated in prior years and utilized in these years may also be subject to examination by respective state taxing authorities. Generally, the Company is subject to routine examination for years 2007 and forward in various foreign tax jurisdictions in which it operates.

Deferred tax assets and liabilities result primarily from temporary differences between book and tax bases of assets and liabilities and state research and development credit carryforwards. The Company had net deferred tax assets of $23.5 million at March 31, 2015. The Company must regularly assess the likelihood that future taxable income levels will be sufficient to ultimately realize the tax benefits of these net deferred tax assets. The Company currently believes that future taxable income levels will be sufficient to realize the tax benefits of these deferred tax assets except for a valuation allowance of $12.7 million and $12.2 million that was established against state deferred tax assets at March 31, 2015 and December 31, 2014, respectively. Should the Company determine that future realization of these tax benefits is not more likely than not, additional valuation allowances would be established which would increase the Company's tax provision in the period of such determination.

Included in net deferred tax assets are credit carryforwards. The Company has available state research and development credit carryforwards of approximately $22.9 million, for which a full valuation allowance has been provided for. The state research credit carryforwards are not subject to expiration and may be carried forward indefinitely until utilized.