Income Tax (Tables)

12 Months Ended

Dec. 31, 2018

Components of Income Tax Expense (Benefit)

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



	Years ended December 31,
(In thousands)	2018			2017			2016
Current tax provision	$	17,207		$	9,086		$	12,865
Deferred tax benefit	(4,611		)	(4,306		)	(4,594		)
Income tax expense	$	12,596		$	4,780		$	8,271

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,
(In thousands)	2018			2017			2016
Income before income tax provision
Puerto Rico	$	77,176		$	47,347		$	70,899
United States	3,199			3,089			2,670
Foreign countries	18,790			9,763			9,828
Total income before income tax provision	$	99,165		$	60,199		$	83,397
Current tax provision
Puerto Rico	$	6,841		$	1,892		$	7,072
United States	599			292			567
Foreign countries	9,767			6,902			5,226
Total current tax provision	$	17,207		$	9,086		$	12,865
Deferred tax benefit
Puerto Rico	$	(2,904	)	$	(3,176	)	$	(2,874	)
United States	(584		)	(184		)	(259		)
Foreign countries	(1,123		)	(946		)	(1,461		)
Total deferred tax benefit	$	(4,611	)	$	(4,306	)	$	(4,594	)

Components of Deferred Tax Assets and Liabilities

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



	December 31,
(In thousands)	2018			2017
Deferred tax assets (“DTA”)
Allowance for doubtful accounts	$	170		$	195
Unearned income	4,394			3,136
Investment in equity subsidiary	220			447
Alternative minimum tax	—			51
Share-based compensation	1,684			1,208
Debt issuance costs	309			69
Accrued liabilities	1,257			505
Derivative liability	351			—
Accrual of contract maintenance cost	157			472
Impairment of asset	289			425
Other	1,976			1,754
Total gross deferred tax assets	10,807			8,262
Deferred tax liabilities (“DTL”)
Capitalized salaries	1,756			1,617
Derivative asset	185			—
Difference between the assigned values and the tax basis of assets and liabilities recognized in a business combination	16,240			19,124
Other	659			353
Total gross deferred tax liabilities	18,840			21,094
Deferred tax liability, net	$	(8,033	)	$	(12,832	)

Reconciliation of Total Amounts of Unrecognized Tax Benefits

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



	Years ended December 31,
(In thousands)	2018			2017			2016
Balance, beginning of year	$	9,148		$	12,219		$	12,847
Gross increases—tax positions in prior period	578			—			—
Gross decreases—tax positions in prior period	(488		)	—			(345		)
Lapse of statute of limitations	—			(3,071		)	(283		)
Balance, end of year	$	9,238		$	9,148		$	12,219

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 before income taxes as a result of the following:



	Years ended December 31,
(In thousands)	2018			2017			2016
Computed income tax at statutory rates	$	38,674		$	23,477		$	32,525
Benefit of net tax-exempt interest income	(50		)	(56		)	(52		)
Differences in tax rates due to multiple jurisdictions	(678		)	2,353			32
Tax expense (benefit) due to a change in estimate	467			(334		)	258
Effect of income subject to tax-exemption grant	(26,260		)	(16,832		)	(24,866		)
Unrecognized tax expense (benefit)	443			(3,828		)	373
Other	—			—			1
Income tax expense	$	12,596		$	4,780		$	8,271