Note 13 - Income Taxes

3 Months Ended

Mar. 31, 2013

Income Tax Disclosure [Text Block]

13.     Income Taxes

ASC topic -740-270, Interim Reporting - Income tax, requires companies to make the best estimate of the annual effective tax rate for the full fiscal year and use that rate to provide for income taxes on a current year-to-date basis.  The Company recorded a benefit from income taxes of $1.6 million for the three-month period ended March 31, 2013.  This is primarily the result of a tax benefit offset to income tax expense on other comprehensive income related to a mark-to-market adjustment to the value of available-for-sale securities.

For the three-month period ended March 31, 2012, the Company recorded a tax provision of $0.1 million resulting from two discrete tax expenses of which one relates to the amortization of indefinite lived intangible assets, and the other is related to mark-to-market adjustments to the value of available-for-sale securities.

ASC topic 740 requires that deferred tax assets and liabilities are recognized using enacted tax rates for the effect of temporary differences between the book and tax bases of recorded assets and liabilities. ASC 740 also requires that deferred tax assets be reduced by a valuation allowance if it is more likely than not that some or all of the deferred tax assets will not be realized. Based on its history of operating losses, the Company has offset its net deferred tax assets by a full valuation allowance for federal and selected state purposes. When realized (or earlier, if justified by the Company’s earning history), the asset will be reflected on the Company’s balance sheet and the reversal of the corresponding valuation allowance will result in a tax benefit being recorded in the statement of operations in the respective period.

The Company continues to monitor the status of its net operating losses (“NOLs”), which may be used to offset future taxable income. If the Company underwent an ownership change, the NOLs would be subject to an annual limit on the amount of the taxable income that may be offset by its NOLs generated prior to the ownership change and additionally, the Company may be unable to use a significant portion of its NOLs to offset taxable income. For details regarding the Company’s NOL carryforwards prior to the three-month period ended March 31, 2013, please refer to Note 15 of the Notes to Financial Statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2012.

The Company is subject to U.S. federal income tax as well as income taxes in many U.S. states and foreign jurisdictions in which the Company operates or formerly operated. As of March 31, 2013, fiscal years 2005 onward remained open to examination by the U.S. taxing authorities and fiscal years 2000 onward remained open to examination in various foreign jurisdictions.  U.S. tax attributes generated in fiscal years 2000 onward also remain subject to adjustment in subsequent audits when they are utilized.

As of March 31, 2013, the Company’s total gross unrecognized tax benefits were $26.4 million of which $7.4 million, if recognized, would affect the effective tax rate. There have been no material changes to our total gross unrecognized benefits from December 31, 2012. The Company has no interest or penalties related to its unrecognized tax benefits.

The calculation of unrecognized tax benefits involves dealing with uncertainties in the application of complex global tax regulations. Our management regularly assesses our tax positions in light of legislative, bilateral tax treaty, regulatory and judicial developments in the countries in which we conduct or formerly conducted business. We believe that it is not reasonably possible that the gross unrecognized tax benefits will change significantly within the next 12 months; however, tax audits remain open and the outcome of any tax audits are inherently uncertain, which could change this judgment in any given quarter.