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Income Taxes
9 Months Ended
Sep. 30, 2014
Income Tax Disclosure [Abstract]  
Income Taxes

12. Income Taxes

The Company recorded income tax expense of $0.3 million for the nine months ended September 30, 2014. The tax expense for the nine months ended September 30, 2014 differed from the statutory rate of 34% primarily because the Company recorded a tax benefit of $0.8 million related to the reversal of a liability for uncertain income taxes. During the nine months ended September 30, 2014, the Company also recorded $0.5 million to additional paid in capital related to tax benefits for stock compensation. The Company recorded income tax expense for continuing operations of $1.8 million for the nine months ended September 30, 2013. The tax expense for the nine months ended September 30, 2013 differed from the statutory rate of 34% due to state income taxes.

 

The Company’s valuation allowance against its deferred tax assets was $0.6 million at September 30, 2014 and December 31, 2013. On a regular basis, the Company evaluates the recoverability of deferred tax assets and the need for a valuation allowance. Such evaluations involve the application of significant judgment. The Company considers multiple factors in its evaluation of the need for a valuation allowance. The Company’s long-term forecasts continue to support the realization of its deferred tax assets. The Company’s domestic deferred tax assets have a ratable reversal pattern over 15 years. The carry forward rules allow for up to a 20 year carry forward of net operating losses (“NOL”) to future income that is available to realize the deferred tax assets. The combination of the deferred tax asset reversal pattern and carry forward period yields a 26.0 year average period over which future income can be utilized to realize the deferred tax assets.

The Company’s gross unrecognized tax benefit was $0.9 million and $1.5 million at September 30, 2014 and December 31, 2013, respectively. The Company believes that is likely that approximately $0.1 million related to foreign income tax uncertainties will reverse in the fourth quarter 2014.

The Company files a consolidated federal income tax return, income tax returns with various states, and foreign income tax returns in various foreign jurisdictions. The Company’s federal and state income tax years, with limited exceptions, are closed through 2007.