Income Taxes (Tables)

12 Months Ended

Dec. 31, 2013

Income Taxes

Schedule of components of income tax expense (benefit)

Income tax expense (benefit) consisted of the following components (dollars in thousands):

	2013		2012			2011
Current:
Federal	$	2,628	$	416		$	(1,160	)
State		1,634		782			1,282
Foreign		4,657		3,362			5,632
		8,919		4,560			5,754
Deferred:
Federal		1,606		(19,423	)		(25,146	)
State		992		(7,565	)		(8,409	)
Foreign		453		(168	)		962
		3,051		(27,156	)		(32,593	)
Total	$	11,970	$	(22,596	)	$	(26,839	)

Summary of income (loss) before income taxes

Income (loss) before income taxes consisted of the following (dollars in thousands):

	2013		2012			2011
U.S.	$	15,687	$	(248,101	)	$	(222,337	)
Foreign		27,368		(22,354	)		15,709
Total	$	43,055	$	(270,455	)	$	(206,628	)

Significant components of deferred income tax assets and liabilities

The tax effects of temporary differences that gave rise to the net deferred tax assets (liabilities) at December 31 were as follows (dollars in thousands):

	2013			2012
Deferred tax assets:
Compensation and benefits	$	12,844		$	9,474
Net operating loss and capital loss carryover		17,121			19,012
Share-based compensation		6,959			8,506
Allowance for doubtful accounts		889			1,149
Tax benefits on uncertain tax positions		2,697			2,696
Goodwill and other intangibles		21,138			24,746
Depreciation		—			649
Other		9,757			9,203
Total deferred tax assets		71,405			75,435
Less: valuation allowance		20,541			20,774
Total deferred tax assets, net of valuation allowance		50,864			54,661
Deferred tax liabilities:
Depreciation		(3,916	)		—
Capitalized software		(12,838	)		(15,226	)
Other		(343	)		(573	)
Total deferred tax liabilities		(17,097	)		(15,799	)
Net deferred tax assets	$	33,767		$	38,862

Summary of net operating loss carry forwards and respective expiration period

Net operating loss carry forwards expire as follows (dollars in thousands):

	Amount		Years remaining
Hong Kong, Australia, U.K. and Ireland operating losses	$	72,943	Indefinite
	$	72,943

Reconciliation of the U.S. federal statutory income tax rate and actual effective tax rate on earnings

	2013			2012			2011
U.S. federal statutory income tax rate		35.0	%		35.0	%		35.0	%
State and local income taxes, net of U.S. federal income tax effect		3.9			1.8			2.2
Foreign tax impact, net		(6.4	)		(3.6	)		(0.9	)
Non-deductible costs *		1.0			(24.3	)		(23.7	)
Other, net		(5.7	)		(0.5	)		0.4
Effective income tax rate		27.8	%		8.4	%		13.0	%

*

Non-deductible costs in 2012 and 2011 include goodwill impairment charges.

Reconciliation of the beginning and ending balances of unrecognized tax benefits

A reconciliation of the beginning and ending amounts of unrecognized tax benefits is as follows (dollars in thousands):

Uncertain Tax Benefits	2013			2012			2011
Balance, January 1	$	13,726		$	14,542		$	12,380
Additions based on tax positions related to the current year		404			568			2,402
Additions based on tax positions of prior years		434			857			647
Reductions for tax positions of prior years		(148	)		(2,024	)		(42	)
Reductions due to settlements with taxing authorities		(124	)		(217	)		(516	)
Reductions due to expiration of statute of limitations		(1,218	)		—			(329	)
Balance, December 31	$	13,074		$	13,726		$	14,542