|12 Months Ended|
Dec. 31, 2013
(13) Income Taxes
The Company’s income tax expense consists of the following (amounts in thousands):
Income tax expense differs from the amounts computed by applying the United States federal income tax rate of 35% as a result of the following (amounts in thousands):
Components of deferred tax assets and liabilities as of December 31 are as follows (amounts in thousands):
The Company’s deferred tax assets and liabilities are reported in the accompanying consolidated balance sheets as follows (amounts in thousands):
For the year ended December 31, 2013, the valuation allowance decreased by $1,050,000. The change in the valuation allowance is attributable to an increase of $2,696,000 related to income tax expense, which includes the impact of a reduction of the Company’s valuation allowance of $3,887,000 in connection with the acquisition of Security Networks, offset by a decrease of $4,334,000 related to changes in the derivative fair values recorded in other comprehensive income and a decrease in other deferred tax liabilities of $588,000.
As of December 31, 2013, the Company had $305,551,000 of federal net operating loss carryforwards, which begin to expire, if unused, in 2024. Approximately $130,367,000 of the Company’s federal net operating losses are subject to IRC Section 382 limitations. In addition, the Company had available for federal income tax purposes an alternative minimum tax credit carryforward of $426,000, which is available for an indefinite period. As of December 31, 2013, the Company had available for state income tax purposes net operating loss carryforwards of $98,581,000 and state tax credits of $1,070,000, the latter of which will expire in 2026.
As of December 31, 2013, the Company’s federal income tax returns for the 2010 through 2012 tax years remain subject to examination by the IRS and state authorities. The Company’s state income tax returns subsequent to 2008 are subject to examination by state tax authorities.
A reconciliation of the beginning and ending amount of uncertain tax positions, which is recorded in other long term liabilities, is as follows (amounts in thousands):
When the tax law requires interest to be paid on an underpayment of income taxes, the Company recognizes interest expense from the first period the interest would begin accruing according to the relevant tax law. Any accrual of interest and penalties related to underpayment of income taxes on uncertain tax positions is included in Income tax expense from continuing operations in the accompanying consolidated statements of operations. As of December 31, 2013 accrued interest and penalties related to uncertain tax positions were approximately $55,000. The Company does not expect a significant change in uncertain tax positions in the next twelve months.
The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.
Reference 1: http://www.xbrl.org/2003/role/presentationRef