Income Taxes (Tables)

12 Months Ended

Dec. 31, 2016

Components of Net Income from Continuing Operations Before Income Taxes

Income Tax Provision/(Benefit). The components of net income from continuing operations before income taxes are as follows (in thousands):

	2016		2015		2014
Domestic	$	98,966	$	93,390	$	70,737
Foreign		1,033		2,951		(9,215	)
Total	$	99,999	$	96,341	$	61,522

Schedule of Components of Income Tax Expense (Benefit)

The income tax provision related to continuing operations consists of the following (in thousands):

	2016			2015			2014
Current:
Federal	$	31,409		$	41,002		$	20,374
State		3,819			5,227			2,443
Foreign		4,639			3,651			2,953
		39,867			49,880			25,770
Deferred:
Federal		(2,229	)		(14,611	)		1,139
State		276			(1,147	)		837
Foreign		(797	)		(348	)		(1,935	)
		(2,750	)		(16,106	)		41
Total income tax provision	$	37,117		$	33,774		$	25,811

Schedule of Effective Income Tax Rate Reconciliation

The difference between our income tax provision computed at the statutory Federal income tax rate and our financial statement income tax related to continuing operations is summarized as follows (in thousands):

	2016			2015			2014
Provision at Federal rate of 35%	$	35,000		$	33,719		$	21,533
State income taxes, net of Federal impact		2,662			2,652			2,132
Research and experimentation credits		(71	)		(2,135	)		(450	)
Tax uncertainties		(1,597	)		(166	)		187
Section 199 manufacturing deduction		(4,060	)		(2,884	)		(1,936	)
Foreign rate differential		857			688			2,847
Valuation allowance for deferred tax assets		1,287			919			3,602
Other impact of foreign operations		2,157			283			(3,555	)
Other		882			698			1,451
Total income tax provision	$	37,117		$	33,774		$	25,811

Net Deferred Income Tax Assets

Deferred Income Taxes. Net deferred income tax assets as of December 31, 2016 and 2015 are as follows (in thousands):

	2016			2015
Deferred income tax assets	$	65,690		$	77,270
Deferred income tax liabilities		(33,748	)		(42,576	)
Valuation allowance		(17,823	)		(17,414	)
Net deferred income tax assets	$	14,119		$	17,280

The Components of Net Deferred Income Tax Assets (Liabilities)

The components of our net deferred income tax assets (liabilities) as of December 31, 2016 and 2015 are as follows (in thousands):

	2016			2015
Net deferred income tax assets:
Accrued expenses and reserves	$	13,252		$	14,001
Stock-based compensation		5,066			5,528
Software		912			602
Client contracts and related intangibles		(590	)		(2,079	)
Goodwill		(8,336	)		(7,590	)
Net operating loss carryforwards		36,123			38,726
Property and equipment		(8,672	)		(7,244	)
Convertible debt securities		(16,094	)		(16,853	)
Deferred revenue		3,556			4,268
Facility abandonments		2,273			2,374
Contingent payments		848			849
Other		3,630			2,294
Total deferred income tax assets		31,968			34,876
Less: valuation allowance		(17,750	)		(17,414	)
Net deferred income tax assets	$	14,218		$	17,462
Net deferred income tax liabilities:
Other	$	(26	)	$	(182	)
Total deferred income tax liabilities		(26	)		(182	)
Less: valuation allowance		(73	)		-
Net deferred income tax liabilities	$	(99	)	$	(182	)

Reconciliation of Beginning and Ending Balances of Liability for Unrecognized Tax Benefits

A reconciliation of the beginning and ending balances of our liability for unrecognized tax benefits is as follows (in thousands):

	2016			2015			2014
Balance, beginning of year	$	4,079		$	3,417		$	3,713
Additions based on tax positions related to current year		—			150			351
Settlements		(1,893	)		—			—
Lapse of statute of limitations		(122	)		—			—
Additions for tax positions of prior years		370			925			30
Reductions for tax positions of prior years		(543	)		(413	)		(677	)
Balance, end of year	$	1,891		$	4,079		$	3,417