Income Tax (Tables)

12 Months Ended

Dec. 31, 2017

Components of Income Tax Expense (Benefit)

The components of income tax expense (benefit) consisted of the following:



	Years ended December 31,
(Dollar amounts in thousands)	2017			2016			2015
Current tax provision (benefit)	$	9,086		$	12,865		$	(245	)
Deferred tax benefit	(4,306		)	(4,594		)	(3,090		)
Income tax expense (benefit)	$	4,780		$	8,271		$	(3,335	)

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

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



	Years ended December 31,
(Dollar amounts in thousands)	2017			2016			2015
Income before income tax provision
Puerto Rico	$	47,347		$	70,899		$	73,327
United States	3,089			2,670			1,879
Foreign countries	9,763			9,828			6,836
Total income before income tax provision	$	60,199		$	83,397		$	82,042
Current tax provision (benefit)
Puerto Rico	$	1,892		$	7,072		$	(3,500	)
United States	292			567			413
Foreign countries	6,902			5,226			2,842
Total current tax provision (benefit)	$	9,086		$	12,865		$	(245	)
Deferred tax benefit
Puerto Rico	$	(3,176	)	$	(2,874	)	$	(2,169	)
United States	(184		)	(259		)	(114		)
Foreign countries	(946		)	(1,461		)	(807		)
Total deferred tax benefit	$	(4,306	)	$	(4,594	)	$	(3,090	)

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)	2017			2016
Deferred tax assets (“DTA”)
Allowance for doubtful accounts	$	195		$	265
Unearned income	3,136			2,023
Investment in equity subsidiary	447			385
Alternative minimum tax	51			176
Share-based compensation	1,208			697
Debt Issuance Costs	69			127
General Reserves	505			474
Derivative Liability	—			172
Accrual of contract maintenance cost	472			—
Impairment of asset	425			—
Other temporary assets	1,754			704
Total gross deferred tax assets	8,262			5,023
Deferred tax liabilities (“DTL”)
Deferred compensation	1,617			1,458
Difference between the assigned values and the tax basis of assets and liabilities recognized in purchase	19,124			17,738
Other temporary liabilities	353			—
Total gross deferred tax liabilities	21,094			19,196
Deferred tax liability, net	$	(12,832	)	$	(14,173	)

Reconciliation of Total Amounts of Unrecognized Tax Benefits

The following is a tabular reconciliation of the total amounts of UTPs:



	Years ended December 31,
(Dollar amounts in thousands)	2017			2016			2015
Balance, beginning of year	$	12,219		$	12,847		$	19,859
Gross increases—tax positions in prior period	—			—			53
Gross decreases—tax positions in prior period	—			(345		)	—
Lapse of statute of limitations	(3,071		)	(283		)	(7,065		)
Balance, end of year	$	9,148		$	12,219		$	12,847

Income Tax Expense Differs from Computed Income Tax at Statutory Rates

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



	Years ended December 31,
(Dollar amounts in thousands)	2017			2016			2015
Computed income tax at statutory rates	$	23,477		$	32,525		$	31,996
Benefit of net tax-exempt interest income	(56		)	(52		)	(284		)
Differences in tax rates due to multiple jurisdictions	2,353			32			37
Tax (benefit) expense due to a change in estimate	(334		)	258			(201		)
Effect of income subject to tax-exemption grant	(16,832		)	(24,866		)	(23,375		)
Unrecognized tax (benefit) expense	(3,828		)	373			(11,626		)
Effect of disallowed operating losses in foreign entities	—			—			103
Other	—			1			15
Income tax expense (benefit)	$	4,780		$	8,271		$	(3,335	)