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Note 11 - Income Taxes
 12 Months Ended
Dec. 31, 2011
Income Tax Disclosure [Abstract]  
Income Tax Disclosure [Text Block]

 

NOTE 11 - INCOME TAXES

 

Components of the provision for income taxes and the income to which it relates for the years ended December 31, 2011, 2010 and 2009, consist of the following (in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31,

 

 

2011

 

2010

 

2009

 

 

 

 

 

 

 

 

 

 

Income from continuing operations before income taxes

$

108,203

 

$

80,042

 

$

61,175

 

 

 

 

 

 

 

 

 

 

Current income taxes:

 

 

 

 

 

 

 

 

 

Federal

$

16,878

 

$

13,508

 

$

7,678

 

Foreign

 

17,304

 

 

12,606

 

 

9,564

 

State and local

 

749

 

 

710

 

 

1,379

 

 

 

34,931

 

 

26,824

 

 

18,621

Deferred income taxes

 

2,407

 

 

1,844

 

 

4,258

 

 

$

37,338

 

$

28,668

 

$

22,879

 

The provision for income taxes related to discontinued operations was an expense of $4,612,000, $2,642,000 and $8,359,000 for the years ended December 31, 2011, 2010 and 2009, respectively.

 

The principal current and non-current deferred tax assets and liabilities consist of the following at December 31, 2011, and 2010 (in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

December 31,

 

 

 

2011

 

2010

Deferred tax assets:

 

 

 

 

 

 

Cumulative foreign translation adjustment

$

7,091

 

$

1,708

 

Interest accrual on pawn forfeits

 

931

 

 

1,043

 

Foreign tax credits

 

304

 

 

3,506

 

Other

 

852

 

 

800

 

 

Total deferred tax assets

 

9,178

 

 

7,057

 

 

 

 

 

 

 

 

Deferred tax liabilities:

 

 

 

 

 

 

Intangible asset amortization

 

13,855

 

 

14,023

 

Functional currency tax-basis adjustment

 

-

 

 

1,962

 

Other

 

564

 

 

497

 

 

Total deferred tax liabilities

 

14,419

 

 

16,482

Net deferred tax liablities

$

(5,241)

 

$

(9,425)

 

 

 

 

 

 

 

 

Reported as:

 

 

 

 

 

 

Current deferred tax assets

$

1,078

 

$

-

 

Current deferred taxes payable

 

-

 

 

(991)

 

Non-current deferred income tax liabilities

 

(6,319)

 

 

(8,434)

 

 

Net deferred tax liabilities

$

(5,241)

 

$

(9,425)

 

 

The effective rate on income from continuing operations differs from the U.S. federal statutory rate of 35%. The following is a reconciliation of such differences (in thousands):   

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31,

 

 

2011

 

2010

 

2009

 

 

 

 

 

 

 

 

 

 

Tax at the U.S. federal statutory rate

$

37,871

 

$

28,015

 

$

21,411

State income taxes, net of federal tax benefit of $262, $249 and

 

 

 

 

 

 

 

 

 

$483, respectively

 

487

 

 

462

 

 

896

Other taxes and adjustments, net

 

(1,020)

 

 

191

 

 

572

 

 

$

37,338

 

$

28,668

 

$

22,879

 

The Company determines whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. The Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. Interest and penalties related to income tax liabilities that could arise would be classified as interest expense in the Consolidated Statements of Income. There were no such interest or penalties for the fiscal years ended December 31, 2011, 2010 and 2009.

 

As of December 31, 2011, and 2010, the Company had no unrecognized tax benefits and, therefore, the Company did not have a liability for accrued interest and penalties. The Company does not believe that its unrecognized tax benefits will significantly change over the next twelve months.

 

The Company files federal income tax returns in the United States and Mexico, as well as multiple state and local income tax returns in the United States. The Company’s U.S. federal income tax returns for the years ended December 31, 2006, 2007, 2008 and 2009 are currently being examined by the U.S. Internal Revenue Service. As of the close of the calendar year, no adjustments have been proposed. The Company’s U.S. federal returns are not subject to examination for tax years prior to 2006. The Company’s state income tax returns are not subject to examination for the tax years prior to 2008 with the exception of three states, which are not subject to examination for tax years prior to 2007. With respect to Mexico, the tax years prior to 2006 are closed to examination.

 

The Company has cumulative foreign tax credits of $304,000 as of the end of 2011, which will expire at the end of 2018. The Company expects that it will utilize the foreign tax credits prior to their expiration.