XML 91 R21.htm IDEA: XBRL DOCUMENT
v2.4.1.9

Income Taxes | 12 Months Ended
--- | ---
Dec. 31, 2014
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes The federal and state and foreign income tax provision is summarized as follows:
Year Ended December 31, |  | 2014 |  | 2013 |  | 2012
Current |  |  |  |  |  |
Federal |  | $ | 155,273 |  |  | $ | 153,856 |  |  | $ | 112,247 |
State |  | 8,744 |  |  | 11,542 |  |  | 5,284 |
Foreign |  | 5,254 |  |  | 4,727 |  |  | 4,511 |
|  | 169,271 |  |  | 170,125 |  |  | 122,042 |
Deferred, including current deferred |  |  |  |  |  |
Federal |  | 1,667 |  |  | (2,214 | ) |  | (2,708 | )
State |  | 11 |  |  | (16,264 | ) |  | (2,199 | )
Foreign |  | — |  |  | (4,814 | ) |  | 3,970 |
|  | 1,678 |  |  | (23,292 | ) |  | (937 | )
Income taxes attributable to the noncontrolling interest |  | — |  |  | 91 |  |  | 357 |
Total income taxes |  | $ | 170,949 |  |  | $ | 146,924 |  |  | $ | 121,462 |
Annual tax provisions include amounts considered sufficient to pay assessments that may result from examination of prior year tax returns; however, the amount ultimately paid upon resolution of issues raised may differ materially from the amount accrued. The examination and the resolution process may last longer than one year. The components of Income before income taxes are summarized as follows:
Year Ended December 31, |  | 2014 |  | 2013 |  | 2012
Domestic |  | $ | 475,175 |  |  | $ | 427,915 |  |  | $ | 319,907 |
Foreign |  | 14,487 |  |  | 7,042 |  |  | 8,046 |
|  | $ | 489,662 |  |  | $ | 434,957 |  |  | $ | 327,953 |
The effective income tax rate differs from the federal income tax statutory rate due to the following:
Year Ended December 31, | 2014 |  | 2013 |  | 2012
Statutory rate | 35.0 | % |  | 35.0 | % |  | 35.0 | %
State taxes, net of Federal tax benefit | 1.2 |  |  | 1.5 |  |  | 1.0 |
Foreign tax expense and tax rate differential | (0.7 | ) |  | 0.5 |  |  | 1.6 |
Research and development tax credit | (0.4 | ) |  | (0.8 | ) |  | — |
Domestic Production Activities Deduction | (0.4 | ) |  | (0.5 | ) |  | (0.6 | )
PA Tax Law changes and change in valuation allowance on loss carryforwards | — |  |  | (2.4 | ) |  | (0.3 | )
Net change in uncertain tax positions | 0.3 |  |  | 0.1 |  |  | 0.5 |
Other, net | (0.1 | ) |  | 0.3 |  |  | (0.3 | )
| 34.9 | % |  | 33.7 | % |  | 36.9 | %
The impact on the Company's effective income tax rate from the net change in uncertain tax positions in 2014 relates to federal issues mainly associated with the compilation of foreign tax credits and state tax issues. For 2013 and 2012, the impact from the net change in uncertain tax positions relates to federal and state tax issues and foreign tax issues. Undistributed earnings of the Company’s foreign subsidiaries amounted to approximately $61,833 at December 31, 2014. Those earnings are considered to be indefinitely reinvested and, accordingly, no U.S. federal and state income taxes have been provided thereon. Upon distribution of those earnings, in the form of dividends or otherwise, the Company would be subject to both U.S. income taxes, subject to an adjustment for foreign tax credits, and withholding taxes payable to the various foreign countries. Determination of the amount of unrecognized deferred U.S. income tax liability is not practicable because of the complexities associated with its hypothetical calculation, including the availability, or lack thereof, of foreign tax credits to reduce a portion of the U.S. liability. Deferred income taxes for 2014, 2013 and 2012 reflect the impact of temporary differences between the amount of assets and liabilities for financial reporting purposes and such amounts as measured by tax laws and regulations. In 2013, the Company's deferred income tax net liability decreased significantly due to the following: (1) Pennsylvania Tax Law changes enacted on July 18, 2013 which became effective on January 1, 2014. These changes reduced the deferred tax liability which had accumulated during prior years. In accordance with the tax accounting rules, the effect of the law change is recorded in the year in which the law was signed. The primary change that affects the Company results from the reduction of net income apportioned to the State of Pennsylvania. The bill adopts “market-based” sourcing for apportionment. This method apportions sales to the state where the benefits are being derived by the customer. The current method apportions sales of services to the state where the cost was incurred to perform those services; (2) the Company's current payable was increased by unfavorable temporary differences such as stock option compensation which is not currently deductible but will reverse in the future; thus reducing the Company's deferred tax liability; (3) the Company's current payable decreased as a result of the sale of SEI AK. The net deferred income tax liability is comprised of:
Year Ended December 31, |  | 2014 |  | 2013
Current deferred income taxes: |  |  |  |
Gross assets |  | $ | 2,952 |  |  | $ | 2,458 |
Gross liabilities |  | (4,366 | ) |  | (4,111 | )
|  | (1,414 | ) |  | (1,653 | )
Valuation allowance |  | — |  |  | — |
|  | (1,414 | ) |  | (1,653 | )
Long-term deferred income taxes: |  |  |  |
Gross assets |  | 66,335 |  |  | 69,483 |
Gross liabilities |  | (113,581 | ) |  | (121,317 | )
|  | (47,246 | ) |  | (51,834 | )
Valuation allowance |  | (16,509 | ) |  | (14,738 | )
|  | (63,755 | ) |  | (66,572 | )
Net deferred income tax liability |  | $ | (65,169 | ) |  | $ | (68,225 | )
The valuation allowances against deferred tax assets at December 31, 2014 and 2013 are related to state net operating losses from certain domestic subsidiaries. Certain state tax statutes significantly limit the utilization of net operating losses for domestic subsidiaries. Furthermore, these net operating losses cannot be used to offset the net income of other subsidiaries. In 2014, the valuation also includes valuation of foreign tax credit. The tax effect of significant temporary differences representing deferred tax liabilities is:
Year Ended December 31, |  | 2014 |  | 2013
Difference in financial reporting and income tax depreciation methods |  | $ | (3,637 | ) |  | $ | (7,043 | )
Reserves not currently deductible |  | 209 |  |  | 235 |
Capitalized software currently deductible for tax purposes, net of amortization |  | (118,841 | ) |  | (119,800 | )
State deferred income taxes |  | (420 | ) |  | 251 |
Revenue and expense recognized in different periods for financial reporting and income tax purposes |  | 6,212 |  |  | 3,856 |
Unrealized holding gain on investments |  | (475 | ) |  | (308 | )
Stock-based compensation expense |  | 38,989 |  |  | 45,555 |
State net operating loss carryforward |  | 24,150 |  |  | 21,215 |
Valuation allowance on deferred tax assets |  | (16,509 | ) |  | (14,738 | )
Federal benefit of state tax deduction for uncertain tax positions |  | 2,913 |  |  | 2,643 |
Foreign tax credit |  | 2,327 |  |  | — |
Foreign deferred including taxes on cumulative undistributed earnings of SEI AK | (87 | ) |  | (91 | )
Net deferred income tax liability |  | $ | (65,169 | ) |  | $ | (68,225 | )
The Company recognizes uncertain tax positions in accordance with the applicable accounting guidance and adjusts these liabilities when management’s judgment changes as a result of the evaluation of new information not previously available. Due to the complexity of some of these uncertainties, the ultimate resolution may result in a payment that is materially different from our current estimate of the tax liabilities. The Company’s total unrecognized tax benefit, not including interest and penalties, as of December 31, 2014 was $14,018, of which $12,162 would affect the effective tax rate if the Company were to recognize the tax benefit. The gross amount of uncertain tax liability of $4,757 which is expected to be paid within one year is netted against the current payable account while the remaining amount of $10,327 is included in Other long-term liabilities on the accompanying Consolidated Balance Sheets. During the year ended December 31, 2014, the Company recognized $1,336 of previously unrecognized tax benefits relating to the lapse of the statute of limitation for certain state filings. The Company files a consolidated federal income tax return and separate income tax returns with various states. Certain subsidiaries of the Company file tax returns in foreign jurisdictions. The Company is no longer subject to U.S. federal income tax examination for years before 2011 and is no longer subject to state, local or foreign income tax examinations by authorities for years before 2010. A reconciliation of the beginning and ending amount of unrecognized tax benefit is as follows:
|  | 2014 |  | 2013 |  | 2012
Balance as of January 1 |  | $ | 12,028 |  |  | $ | 11,553 |  |  | $ | 9,410 |
Tax positions related to current year: |  |  |  |  |  |
Gross additions |  | 1,957 |  |  | 1,834 |  |  | 2,196 |
Gross reductions |  | — |  |  | — |  |  | — |
|  | 1,957 |  |  | 1,834 |  |  | 2,196 |
Tax positions related to prior years: |  |  |  |  |  |
Gross additions |  | 1,369 |  |  | 3,435 |  |  | 1,990 |
Gross reductions |  | — |  |  | — |  |  | — |
|  | 1,369 |  |  | 3,435 |  |  | 1,990 |
Settlements |  | — |  |  | (3,772 | ) |  | (99 | )
Lapses on statute of limitations |  | (1,336 | ) |  | (1,022 | ) |  | (1,944 | )
Balance as of December 31 |  | $ | 14,018 |  |  | $ | 12,028 |  |  | $ | 11,553 |
The above reconciliation of the gross unrecognized tax benefit will differ from the amount which would affect the effective tax rate because of the recognition of the federal and state tax benefits. The Company classifies all interest and penalties as income tax expense. The Company has recorded $1,066, $754 and $770 in liabilities for tax related interest and penalties in 2014, 2013 and 2012, respectively. The Company estimates it will recognize $1,700 of unrecognized tax benefits within the next twelve months due to lapses on the statute of limitation. The Company includes its direct and indirect subsidiaries in its U.S. consolidated federal income tax return. The Company’s tax sharing allocation agreement provides that any subsidiary having taxable income will pay a tax liability equivalent to what that subsidiary would have paid if it filed a separate income tax return. If the separately calculated federal income tax provision for any subsidiary results in a tax loss, the current benefit resulting from such loss, to the extent utilizable on a separate return basis, is accrued and paid to that subsidiary.

X
- Details
Name: | us-gaap_IncomeTaxDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition 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. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 08 -Paragraph h -Article 4 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32559-109319 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration