Income Taxes

12 Months Ended

Dec. 31, 2013

Income Tax Disclosure [Abstract]

Income Taxes

19. Income Taxes

The sources of income (loss) before income taxes are as follows:

	December 31,
	2013			2012			2011
United States	$	29,334		$	32,030		$	7,104
Foreign		(15,946	)		(11,768	)		(21,879	)
Income (loss) before income taxes	$	13,388		$	20,262		$	(14,775	)

The provision for (benefit from) income taxes are as follows:

	December 31,
	2013			2012		2011
Current
Federal	$	6,954		$	4,287	$	2,777
State and local		2,575			2,392		1,356
Foreign		1,430			5,278		4,512
Deferred		(3,918	)		2,065		10,302
Total provision for income taxes	$	7,041		$	14,022	$	18,947

A reconciliation of the provision for (benefit from) income taxes to income taxes at the statutory U.S. federal income tax rate of 35% is as follows:

	December 31,
	2013			2012			2011
Income tax provision (benefit) at the statutory U.S. federal rate	$	4,686		$	7,092		$	(5,171	)
State income tax provision, net of federal tax benefit		1,618			1,930			1,497
Nondeductible expenses		(109	)		1,600			6,728
Foreign tax higher (lower) than U.S. (includes current year unbenefited losses in foreign entities with established valuation allowances)		2,816			4,032			4,641
Goodwill impairment		—			—			7,590
Establishment (release) of valuation allowance		(1,615	)		(3,119	)		3,493
Change in uncertain tax positions		(382	)		619			55
U.S. tax on foreign dividends		1,838			1,215			—
Current/deferred true-up		(1,786	)		2,040			1,078
Other, net		(25	)		(1,387	)		(964	)
Total provision for income taxes	$	7,041		$	14,022		$	18,947

The deferred tax assets and liabilities are attributable to the following components:

	December 31,
	2013			2012
Deferred tax assets attributable to:
Receivable allowances	$	1,206		$	1,531
Accrued compensation and employee benefits		13,741			13,356
Accrued rent		4,569			4,618
Foreign net operating loss carryforwards		32,018			26,836
Accrued restructuring charges		684			676
Deferred compensation		15,003			12,598
Foreign tax credit carryforwards		14,504			12,287
U.S. state net operating loss carryforwards		179			609
U.S. capital loss carryforward		1,208			1,188
Other accrued expenses		1,690			3,120
Deferred tax assets, before valuation allowance		84,802			76,819
Valuation allowance		(29,423	)		(28,666	)
Deferred tax assets, after valuation allowance		55,379			48,153
Deferred tax liabilities attributable to:
Depreciation on property and equipment		3,166			3,715
Taxes provided on unremitted earnings		2,836			—
Goodwill		13,616			10,810
Other		513			377
Deferred tax liabilities		20,131			14,902
Net deferred tax assets	$	35,248		$	33,251

The recognition of deferred tax assets is based on management’s belief that it is more likely than not that the tax benefits associated with temporary differences, net operating loss carryforwards and tax credits will be utilized. The Company assesses the recoverability of the deferred tax assets on an ongoing basis. In making this assessment, the Company considers all positive and negative evidence, and all potential sources of taxable income including scheduled reversals of deferred tax liabilities, tax-planning strategies, projected future taxable income and recent financial performance.

The valuation allowance increased from $28.7 million at December 31, 2012 to $29.4 million at December 31, 2013. The valuation allowance at December 31, 2013 was related to foreign net operating loss carryforwards, certain foreign deferred tax assets, and U.S. capital loss carryforward. The Company intends to maintain these valuation allowances until sufficient evidence exists to support their reversal.

At December 31, 2013, the Company had a net operating loss carryforward of $112.2 million and $2.4 million related to its foreign and U.S. state tax filings, respectively. Of the $112.2 million net operating loss carryforward, $84.3 million is subject to a valuation allowance. Depending on the tax rules of the tax jurisdictions, the losses can be carried forward indefinitely or for periods ranging from five to twenty years. The Company also had a foreign tax credit carryforward of $14.5 million, expiring in 2017 through 2023. Additionally, the Company had U.S. capital loss carryforwards of $1.2 million that may be carried forward two years.

As of December 31, 2013, the Company had unremitted earnings held in its foreign subsidiaries of approximately $59.1 million. The company has provided $2.8 million of tax on $13.1 million of earnings that are intended to be remitted. The Company did not recognize a deferred tax liability for U.S. income taxes and foreign withholding taxes related to the unremitted earnings of its foreign operations because the Company intends to reinvest those earnings indefinitely. If a distribution of these earnings were to be made, the Company might be subject to both foreign withholding taxes and U.S. income taxes, net of any allowable foreign tax credits or deductions. An estimate of these taxes; however, is not practicable. A deferred tax liability will be recognized if and when the Company is no longer able to demonstrate that it plans to permanently reinvest unremitted earnings.

As of January 1, 2013, the Company had $0.5 million of unrecognized tax benefits. As of December 31, 2013 the Company had $0.4 million of unrecognized tax benefits of which, if recognized, approximately $0.1 million, net of federal tax benefits, would be recorded as a component of income tax expense.

A reconciliation of the beginning and ending balances of the total amounts of gross unrecognized tax benefits is as follows:

	December 31,
	2013			2012			2011
Gross unrecognized tax benefits at January 1,	$	534		$	432		$	972
Gross increases for tax positions of prior years		—			689			10
Gross decreases for tax positions of prior years		—			—			(6	)
Settlements		(7	)		(494	)		(534	)
Lapse of statute of limitations		(165	)		(93	)		(10	)
Gross unrecognized tax benefits at December 31,	$	362		$	534		$	432

In many cases the Company’s uncertain tax positions are related to tax years that remain subject to examination by the relevant taxable authorities. Years 2008 through 2012 are subject to examination by the federal and state taxing authorities. There are certain foreign jurisdictions that are subject to examination for years prior to 2009. In 2014, the Company’s 2011 United States federal income tax return will be under examination.

The Company is currently under audit by some U.S. state and foreign jurisdictions. It is likely that the examination phase of several of these audits will conclude in the next 12 months. Additionally, there are several statutes of limitation expected to close within the next 12 months. No significant increases or decreases in unrecognized tax benefits are expected to occur by December 31, 2014.

Estimated interest and penalties related to the underpayment of income taxes are classified as a component of the provision for income taxes in the Consolidated Statements of Comprehensive Income (Loss). Accrued interest and penalties are $0.2 million as of December 31, 2013.