Annual report pursuant to Section 13 and 15(d)

Income Taxes

v2.4.1.9
Income Taxes
12 Months Ended
Dec. 31, 2014
Income Tax Disclosure [Abstract]  
Income Taxes
Income Taxes
 
The Company’s income tax expense (benefit) consists of the following (amounts in thousands):
 
 
 
Year Ended December 31,
 
 
2014
 
2013
 
2012
Current:
 
 

 
 

 
 

Federal
 
$

 

 

State
 
3,526

 
2,827

 
2,198

 
 
3,526

 
2,827

 
2,198

Deferred:
 
 

 
 

 
 

Federal
 
3,292

 
(3,343
)
 
406

State
 
(3,218
)
 
3,597

 
15

 
 
74

 
254

 
421

Total income tax expense
 
$
3,600

 
3,081

 
2,619



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):
 
 
Year Ended December 31,
 
 
2014
 
2013
 
2012
Computed expected tax benefit
 
$
(9,141
)
 
(4,762
)
 
(4,955
)
State and local income taxes, net of federal income taxes
 
200

 
4,176

 
1,438

Change in valuation allowance affecting tax expense
 
9,322

 
1,760

 
5,538

Expense (income) not resulting in tax impact
 
(73
)
 
426

 
191

Amortization of indefinite-lived assets
 
3,292

 
1,481

 
431

Other, net
 

 

 
(24
)
Income tax expense
 
$
3,600

 
3,081

 
2,619


 
Components of deferred tax assets and liabilities as of December 31, 2014 and 2013 are as follows (amounts in thousands):
 
 
As of December 31,
 
 
2014
 
2013
Current assets:
 
 

 
 

Allowance for doubtful accounts
 
$
1,130

 
$
1,072

Accrued liabilities
 
7,293

 
8,921

Total current deferred tax assets
 
8,423

 
9,993

Valuation allowance
 
(1,856
)
 
(1,463
)
Current deferred tax assets, net
 
6,567

 
8,530

Noncurrent assets:
 
 

 
 

Net operating loss carryforwards
 
134,485

 
108,192

Derivative financial instruments
 
1,682

 

Business credits
 
1,466

 
1,495

Other
 
3,579

 
2,464

Total noncurrent deferred tax assets
 
141,212

 
112,151

Valuation allowance
 
(30,926
)
 
(15,225
)
Noncurrent deferred tax asset, net
 
110,286

 
96,926

Total deferred tax assets, net
 
116,853

 
105,456

Noncurrent liabilities:
 
 

 
 

Intangible assets
 
(123,068
)
 
(110,654
)
Property, plant and equipment
 
(2,989
)
 
(3,878
)
Other
 

 
(26
)
Total deferred tax liabilities
 
(126,057
)
 
(114,558
)
Net deferred tax liabilities
 
$
(9,204
)
 
$
(9,102
)
 
The Company’s deferred tax assets and liabilities are reported in the accompanying consolidated balance sheets as follows (amounts in thousands):
 
 
As of December 31,
 
 
2014
 
2013
Current deferred tax assets, net
 
$
6,567

 
$
8,530

Long-term deferred tax liabilities, net
 
(15,771
)
 
(17,632
)
Net deferred tax liabilities
 
$
(9,204
)
 
$
(9,102
)


For the year ended December 31, 2014, the valuation allowance increased by $16,094,000.  The change in the valuation allowance is attributable to an increase of $9,322,000 related to federal income tax expense, an increase of $1,708,000 related to changes in the derivative fair values recorded in other comprehensive income and $5,064,000 of other adjustments to deferred taxes.
 
As of December 31, 2014, the Company had $371,847,000 of federal net operating loss carryforwards, which begin to expire, if unused, in 2024. Approximately $129,521,000 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, 2014, the Company had available for state income tax purposes net operating loss carryforwards of $117,378,000 and state tax credits of $1,040,000, the latter of which will expire in 2026.
 
As of December 31, 2014, the Company’s federal income tax returns for the 2011 through 2014 tax years remain subject to examination by the IRS and state authorities.  The Company’s state income tax returns subsequent to 2009 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):
 
 
Year Ended December 31,
 
 
2014
 
2013
 
2012
As of the beginning of the year
 
$
247

 
247

 
247

Increases for tax positions of current years
 
4

 

 

Reductions for tax positions of prior years
 
(60
)
 

 

As of the end of the year
 
$
191

 
247

 
247


 
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 in the accompanying consolidated statements of operations. As of December 31, 2014 accrued interest and penalties related to uncertain tax positions were approximately $65,000.  The Company does not expect a significant change in uncertain tax positions in the next twelve months.