Income Taxes (Tables)

12 Months Ended

Dec. 31, 2016

Income Taxes

Schedule of components of income tax expense (benefit)

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

	2016		2015		2014
Current:
Federal	$	(9,918)	$	5,731	$	4,802
State		(624)		(1,645)		4,823
Foreign		8,975		12,647		9,449
		(1,567)		16,733		19,074
Deferred:
Federal		(12,687)		13,665		(4,701)
State		(2,217)		2,570		1,026
Foreign		(851)		(3,312)		(1,304)
		(15,755)		12,923		(4,979)
Total	$	(17,322)	$	29,656	$	14,095

Summary of income before income taxes

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

	2016		2015		2014
U.S.	$	(81,579)	$	51,797	$	15,779
Foreign		38,339		69,429		49,208
Total	$	(43,240)	$	121,226	$	64,987

Significant components of deferred income tax assets and liabilities

The components of the Company’s net deferred tax asset are as follows (dollars in thousands):

	2016		2015
Deferred tax assets:
Compensation and benefits	$	9,715	$	13,742
Net operating loss and capital loss carryover		19,755		16,094
Share-based compensation		6,824		6,488
Research and development credits		7,550		3,069
Foreign tax credits		12,660		—
Tax benefits on uncertain tax positions		1,351		2,862
Goodwill and other intangibles		8,015		9,483
Depreciation		1,167		—
Other		5,259		5,063
Total deferred tax assets		72,296		56,801
Less: valuation allowance		(20,979)		(19,444)
Total deferred tax assets, net of valuation allowance		51,317		37,357
Deferred tax liabilities:
Depreciation		—		(1,281)
Capitalized software		(12,174)		(12,072)
Other		(455)		(414)
Total deferred tax liabilities		(12,629)		(13,767)
Net deferred tax assets	$	38,688	$	23,590

Summary of net operating loss carry forwards and respective expiration period

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

	Amount		Years remaining
Hong Kong and Australia	$	78,343	Indefinite
State and local (United States)		59,520	14 years
Ireland		296	Indefinite
	$	138,159

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

	2016		2015		2014
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	5.2		0.4		5.5
Foreign tax impact, net	6.2		(7.2)		(12.8)
Deemed dividend on capital structure amendment (1)	—		5.4		—
Impact of deductible basis on the sale of energy research business	—		(14.8)		—
Reserves released upon tax settlement	18.6		—		—
Non-deductible costs (2)	(22.8)		6.1		0.9
Other, net	(2.1)		(0.4)		(6.9)
Effective income tax rate	40.1	%	24.5	%	21.7	%

(1) Reflects the impact of the tax on a deemed dividend from amending the capital structure of the Company's operations outside of North America.

(2) Includes the impact of the non-deductible payments in 2015 and charges accrued in 2016 payable to the Securities and Exchange Commission (the “SEC”) (see Note 21, Commitments and Contingencies). Additionally, 2016 includes non-deductible officers’ compensation.

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	2016		2015		2014
Balance, January 1	$	15,553	$	14,395	$	13,074
Additions based on tax positions related to the current year		66		2,807		309
Additions based on tax positions of prior years		406		349		3,681
Reductions for tax positions of prior years		—		(36)		(84)
Reductions due to settlements with taxing authorities		(2,153)		(1,773)		(1,108)
Reductions due to expiration of statute of limitations		(6,516)		(189)		(1,477)
Balance, December 31	$	7,356	$	15,553	$	14,395