Income Tax (Tables)

12 Months Ended

Dec. 31, 2013

Components of Income Tax Expense (Benefit)

The components of income tax benefit consisted of the following:


	Years ended December 31,
(Dollar amounts in thousands)	2013			2012			2011
Current tax provision (benefit)	$	3,712		$	6,910		$	(7,144	)
Deferred tax benefit		(5,702	)		(66,568	)		(22,083	)

Income tax benefit	$	(1,990	)	$	(59,658	)	$	(29,227	)

Segregation of Income Tax Expense (Benefit) Based on Location of Operations

The following table presents the segregation of income tax benefit based on location of operations:


	Years ended December 31,
(Dollar amounts in thousands)	2013			2012			2011
Current tax provision (benefit)
Puerto Rico	$	913		$	4,661		$	(9,521	)
United States		753			622			385
Foreign countries		2,046			1,627			1,992

Total current tax provision (benefit)	$	3,712		$	6,910		$	(7,144	)

Deferred tax benefit
Puerto Rico	$	(5,094	)	$	(65,822	)	$	(21,479	)
United States		(5	)		(38	)		—
Foreign countries		(603	)		(708	)		(604	)

Total deferred tax benefit	$	(5,702	)	$	(66,568	)	$	(22,083	)

Components of Deferred Tax Assets and Liabilities

The following table presents the components of the Company’s deferred tax assets and liabilities:


	December 31,
(Dollar amounts in thousands)	2013			2012
Deferred tax assets (“DTA”)
Allowance for doubtful accounts	$	330		$	307
Net operating loss		11,306			7,141
Other temporary assets		1,845			399

Total gross deferred tax assets		13,481			7,847

Deferred tax liabilities (“DTL”)
Deferred compensation	$	993		$	768
Difference between the assigned values and the tax basis of assets and liabilities recognized in purchase		28,849			28,871
Debt issue cost		1,680			2,353
Other temporary liabilities		177			(333	)

Total gross deferred tax liabilities		31,699			31,659

Deferred tax liability, net	$	(18,218	)	$	(23,812	)

Reconciliation of Unrecognized Tax Benefits, Including Accrued Interest

The reconciliation of unrecognized tax benefits, including accrued interest, was as follows:


(Dollar amounts in thousands)
Balance as of December 31, 2010	$	1,222
Accrued estimated interest		281

Balance as of December 31, 2011		1,503
Foreign currency translation adjustment		7
Reversal of tax uncertainties reserve		(707	)
Accrued estimated interest		25

Balance as of December 31, 2012		828
Foreign currency translation adjustment		18
Expiration of statute of limitations		(846	)

Balance as of December 31, 2013	$	—

Income Tax Expense (benefit) Differs from Computed Income Tax at Statutory Rates

The income tax benefit differs from the amount computed by applying the Puerto Rico statutory income tax rate to the (loss) income before income taxes as a result of the following:


	Years ended December 31,
(Dollar amounts in thousands)	2013			2012			2011
Computed income tax at statutory rates	$	(10,378	)	$	5,313		$	(1,504	)
Benefit of net tax-exempt interest income		(180	)		(13	)		(23	)
Benefit of net tax-exempt dividend income		—			—			(620	)
Non taxable loss on settlement of derivative asset		—			—			420
Tax expense (benefit) due to a change in estimate		83			320			(2,416	)
Adjustment to deferred taxes due to changes in enacted tax rate and tax grant		1,441			(66,423	)		(23,813	)
Effect of disallowed net operating losses in foreign entities		93			1,012			—
Differences in tax rates due to multiple jurisdictions		577			720			285
Effect of income subject to tax-exemption grant		7,164			(58	)		(1,737	)
Reversal of tax uncertainties reserve		(846	)		(707	)		—
Fair value adjustment of indemnification assets		—			340			(288	)
Tax expense CONTADO dividend		—			—			81
Tax uncertainties reserve		—			—			250
Other		56			(162	)		138

Income tax benefit	$	(1,990	)	$	(59,658	)	$	(29,227	)