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Income Tax (Tables) | 6 Months Ended | 12 Months Ended
--- | --- | ---
Jun. 30, 2013 | Dec. 31, 2012
Income Tax Disclosure [Abstract] |  |
Components of Income Tax Expense (Benefit) | The components of income tax (benefit) expense for the three and six months ended June 30, 2013 and 2012 consisted of the following:
|  | Three months ended June 30, |  |  | Six months ended June 30, |
(Dollar amounts in thousands) |  | 2013 |  |  | 2012 |  |  | 2013 |  |  | 2012 |
Current tax provision |  | $ | 1,005 |  |  | $ | 3,452 |  |  | $ | 1,290 |  |  | $ | 5,470 |
Deferred tax benefit |  |  | (6,017 | ) |  |  | (4,250 | ) |  |  | (6,251 | ) |  |  | (5,212 | )
Income tax (benefit) expense |  | $ | (5,012 | ) |  | $ | (798 | ) |  | $ | (4,961 | ) |  | $ | 258 |
| The components of income tax benefit consisted of the following:
|  | Years ended December 31, |
(Dollar amounts in thousands) |  | 2012 |  |  | 2011 |
Current tax provision (benefit) |  | $ | 6,910 |  |  | $ | (7,144 | )
Deferred tax benefit |  |  | (66,568 | ) |  |  | (22,083 | )
Income tax benefit |  | $ | (59,658 | ) |  | $ | (29,227 | )
Segregation Income Tax Expense (Benefit) Based on Location of Operations | The following table presents the components of income tax expense (benefit) for the three and six months ended June 30, 2013 and 2012 and its segregation based on location of operations:
|  | Three months ended June 30, |  |  | Six months ended June 30, |
(Dollar amounts in thousands) |  | 2013 |  |  | 2012 |  |  | 2013 |  |  | 2012 |
Current tax provision |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Puerto Rico |  | $ | (122 | ) |  | $ | 3,040 |  |  | $ | 256 |  |  | $ | 4,950 |
United States |  |  | 210 |  |  |  | 159 |  |  |  | 429 |  |  |  | 343 |
Foreign countries |  |  | 917 |  |  |  | 253 |  |  |  | 605 |  |  |  | 177 |
Total current tax provision |  | $ | 1,005 |  |  | $ | 3,452 |  |  | $ | 1,290 |  |  | $ | 5,470 |
Deferred tax benefit |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Puerto Rico |  | $ | (5,880 | ) |  | $ | (4,096 | ) |  | $ | (5,956 | ) |  | $ | (4,905 | )
United States |  |  | — |  |  |  | — |  |  |  | (2 | ) |  |  | — |
Foreign countries |  |  | (137 | ) |  |  | (154 | ) |  |  | (293 | ) |  |  | (307 | )
Total deferred tax benefit |  | $ | (6,017 | ) |  | $ | (4,250 | ) |  | $ | (6,251 | ) |  | $ | (5,212 | )
| The following table presents the segregation of income tax benefit based on location of operations:
|  | Years ended December 31, |
(Dollar amounts in thousands) |  | 2012 |  |  | 2011 |
Current tax provision (benefit) |  |  |  |  |  |  |  |
Puerto Rico |  | $ | 4,661 |  |  | $ | (9,521 | )
United States |  |  | 622 |  |  |  | 385 |
Foreign countries |  |  | 1,627 |  |  |  | 1,992 |
Total current tax provision (benefit) |  | $ | 6,910 |  |  | $ | (7,144 | )
Deferred tax benefit |  |  |  |  |  |  |  |
Puerto Rico |  | $ | (65,822 | ) |  | $ | (21,479 | )
United States |  |  | (38 | ) |  |  | — |
Foreign countries |  |  | (708 | ) |  |  | (604 | )
Total deferred tax benefit |  | $ | (66,568 | ) |  | $ | (22,083 | )
Income Tax Expense (benefit) Differs from Computed Income Tax at Statutory Rates | The income tax (benefit) expense differs from the amount computed by applying the Puerto Rico statutory income tax rate to the income before income taxes as a result of the following:
|  | Three months ended June 30, |  |  | Six months ended June 30, |
(Dollar amounts in thousands) |  | 2013 |  |  | 2012 |  |  | 2013 |  |  | 2012 |
Computed income tax at statutory rates |  | $ | (26,782 | ) |  | $ | (851 | ) |  | $ | (25,125 | ) |  | $ | 526 |
Benefit of net tax-exempt interest income |  |  | (53 | ) |  |  | (2 | ) |  |  | (94 | ) |  |  | (4 | )
Adjustment to deferred taxes due to changes in enacted tax rate |  |  | 1,441 |  |  |  | — |  |  |  | 1,441 |  |  |  | — |
Differences in tax rates due to multiple jurisdictions |  |  | 102 |  |  |  | 99 |  |  |  | 282 |  |  |  | 251 |
Effect of income subject to tax-exemption grant |  |  | 19,983 |  |  |  | (479 | ) |  |  | 18,982 |  |  |  | (605 | )
Reversal of tax uncertainties reserve |  |  | — |  |  |  | — |  |  |  | (846 | ) |  |  | (640 | )
Fair value adjustment of indemnification assets |  |  | — |  |  |  | 62 |  |  |  | — |  |  |  | 364 |
Effect of net operating losses in foreign entities |  |  | (57 | ) |  |  | 278 |  |  |  | — |  |  |  | 278 |
Other |  |  | 354 |  |  |  | 95 |  |  |  | 399 |  |  |  | 88 |
Income tax (benefit) expense |  | $ | (5,012 | ) |  | $ | (798 | ) |  | $ | (4,961 | ) |  | $ | 258 |
| The income tax benefit differs from the amount computed by applying the Puerto Rico statutory income tax rate to the income before income taxes as a result of the following:
|  | Years ended December 31, |
(Dollar amounts in thousands) |  | 2012 |  |  | 2011 |
Computed income tax at statutory rates |  | $ | 5,313 |  |  | $ | (1,504 | )
Benefit of net tax-exempt interest income |  |  | (13 | ) |  |  | (23 | )
Benefit of net tax-exempt dividend income |  |  | — |  |  |  | (620 | )
Non taxable loss on settlement of derivative asset |  |  | — |  |  |  | 420 |
Tax expense (benefit) due to a change in estimate |  |  | 320 |  |  |  | (2,416 | )
Adjustment to DTL due to changes in enacted tax rate and tax grant |  |  | (66,423 | ) |  |  | (23,813 | )
Effect of net operating losses in effective tax rate |  |  | 1,012 |  |  |  | — |
Differences in tax rates due to multiple jurisdictions |  |  | 720 |  |  |  | 285 |
Effect of income subject to tax-exemption grant |  |  | (58 | ) |  |  | (1,737 | )
Reversal of tax uncertainties reserve |  |  | (707 | ) |  |  | — |
Fair value adjustment of indemnification assets |  |  | 340 |  |  |  | (288 | )
Tax expense of CONTADO dividend |  |  | — |  |  |  | 81 |
Tax uncertainties reserve |  |  | — |  |  |  | 250 |
Other |  |  | (162 | ) |  |  | 138 |
Income tax benefit |  | $ | (59,658 | ) |  | $ | (29,227 | )
Components of Deferred Tax Assets and Liabilities |  | The following table presents the components of the Company’s deferred tax assets and liabilities:
|  | December 31, |
(Dollar amounts in thousands) |  | 2012 |  |  | 2011 |
Deferred tax assets |  |  |  |  |  |  |  |
Allowance for doubtful accounts |  | $ | 307 |  |  | $ | 540 |
Net operating loss |  |  | 7,141 |  |  |  | 10,444 |
Unfavorable contract liability |  |  | — |  |  |  | 211 |
Other temporary assets |  |  | 399 |  |  |  | 909 |
Total gross deferred tax assets |  |  | 7,847 |  |  |  | 12,104 |
Deferred tax liabilities (“DTL”) |  |  |  |  |  |  |  |
Deferred compensation |  | $ | 768 |  |  | $ | 2,915 |
Difference between the assigned values and the tax basis of assets and liabilities recognized in purchase |  |  | 28,871 |  |  |  | 90,766 |
Debt issue cost |  |  | 2,353 |  |  |  | 8,513 |
Other temporary liabilities |  |  | (333 | ) |  |  | 218 |
Total gross deferred tax liabilities |  |  | 31,659 |  |  |  | 102,412 |
Deferred tax liability, net |  | $ | (23,812 | ) |  | $ | (90,308 | )
Reconciliation of Unrecognized Tax Benefits, Including Accrued Interest |  | The reconciliation of unrecognized tax benefits, including accrued interest, was as follows:
(Dollar amounts in thousands) |  |  |
Balance as of December 31, 2010 |  | $ | 1,222 |
Accrued estimated interest |  |  | 281 |
Balance as of December 31, 2011 |  |  | 1,503 |
Foreign currency translation adjustment |  |  | 7 |
Reversal of tax uncertainties reserve |  |  | (707 | )
Accrued estimated interest |  |  | 25 |
Balance as of December 31, 2012 |  | $ | 828 |

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- Definition Tabular disclosure of the components of income tax expense attributable to continuing operations for each year presented including, but not limited to: current tax expense (benefit), deferred tax expense (benefit), investment tax credits, government grants, the benefits of operating loss carryforwards, tax expense that results from allocating certain tax benefits either directly to contributed capital or to reduce goodwill or other noncurrent intangible assets of an acquired entity, adjustments of a deferred tax liability or asset for enacted changes in tax laws or rates or a change in the tax status of the entity, and adjustments of the beginning-of-the-year balances of a valuation allowance because of a change in circumstances that causes a change in judgment about the realizability of the related deferred tax asset in future years. + References Reference 1: 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 + Details
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- Definition Tabular disclosure of the components of net deferred tax asset or liability recognized in an entity's statement of financial position, including the following: the total of all deferred tax liabilities, the total of all deferred tax assets, the total valuation allowance recognized for deferred tax assets. + References Reference 1: 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 + Details
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- Definition Tabular disclosure of the reconciliation using percentage or dollar amounts of the reported amount of income tax expense attributable to continuing operations for the year to the amount of income tax expense that would result from applying domestic federal statutory tax rates to pretax income from continuing operations. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 12 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32687-109319 + Details
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