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Income Taxes
 12 Months Ended
Dec. 31, 2012
Income Taxes [Abstract]  
Income Taxes

8. Income Taxes

Significant components of deferred tax assets included in the consolidated balance sheets at December 31, 2012 and 2011 were as follows (in thousands):

 

                 
    2012     2011  

Deferred tax assets:

                

Compensation

   $ 1,059     $ 1,253  

Allowance for doubtful accounts

     607       950  

Lease obligations—closed clinics

     39       139  

Depreciation and amortization

     —         58  

Other

     22       26  
   

 

 

    

 

 

  

Deferred tax assets

   $ 1,727     $ 2,426  

Deferred tax liabilities:

                

Depreciation and amortization

   $ (2,166 )    $  —    

Other

     (575 )      (478 ) 
   

 

 

    

 

 

  

Deferred tax liabilities

     (2,741 )    $ (478 ) 
   

 

 

    

 

 

  

Net deferred tax assets (liabilities)

   $ (1,014 )    $ 1,948  
   

 

 

    

 

 

  

Amount included in:

                

Other current assets

   $ 590     $ 896  

Other assets

   $  —       $ 1,052  

Long term liabilities

   $ (1,604 )    $  —    

During 2012 and 2011, the Company recorded deferred tax assets of $0.8 million and $7.7 million, respectively, related to acquisitions of non controlling interests. At December 31, 2012 and 2011, the Company had a tax receivable of $4.2 million and $3.6 million, respectively, included in other current assets on the accompanying consolidated balance sheets.

The differences between the federal tax rate and the Company’s effective tax rate for results of continuing operations for the years ended December 31, 2012, 2011 and 2010 were as follows (in thousands):

 

                                                 
    2012     2011     2010  

U. S. tax at statutory rate

   $ 10,138       35.0 %    $ 11,225       35.0 %    $ 8,570       35.0 % 

State income taxes, net of federal benefit

     1,199       4.2 %      1,116       3.5 %      185       0.7 % 

Deductible losses

     (404 )      -1.4 %      —         0.0 %      —         0.0 % 

Nontaxable gain

     —         0.0 %      (1,342 )      -4.2 %      —         0.0 % 

Nondeductible expenses

     101       0.3 %      98       0.3 %      85       0.4 % 
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
    $ 11,034           38.1 %    $ 11,097           34.6 %    $   8,840           36.1 % 
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Significant components of the provision for income taxes for continuing operations for the years ended December 31, 2012, 2011 and 2010 were as follows (in thousands):

 

                         
    2012     2011     2010  

Current:

                        

Federal

   $ 6,100     $ 5,732     $ 7,730  

State

     1,196       1,532       658  
   

 

 

    

 

 

    

 

 

  

Total current

     7,296       7,264       8,388  
   

 

 

    

 

 

    

 

 

  

Deferred:

                        

Federal

     3,183       3,603       392  

State

     555       230       60  
   

 

 

    

 

 

    

 

 

  

Total deferred

     3,738       3,833       452  
   

 

 

    

 

 

    

 

 

  

Total income tax provision for continuing operations

   $ 11,034     $ 11,097     $ 8,840  
   

 

 

    

 

 

    

 

 

  

 

During the fourth quarter of 2010, the Company completed a process to perform a detailed reconciliation of its federal and state taxes payable and receivable accounts along with its federal and state deferred tax asset and liability accounts. Historically, calculations of these tax-related accounts were performed through summary estimates and analysis. As a result of this detailed analysis, the Company recorded a reduction in its current state income tax provision of $814,000. The Company considers this reconciliation process to be an annual control and performed a similar reconciliation process during the fourth quarter of 2011 and 2012. For 2011, the adjustment of $162,000 was included in the 2012 state tax provision.

The Company is required to establish a valuation allowance for deferred tax assets if, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the projected future taxable income and tax planning strategies in making this assessment. Based upon the level of historical taxable income and projections for future taxable income in the periods which the deferred tax assets are deductible, management believes that a valuation allowance is not required, as it is more likely than not that the results of future operations will generate sufficient taxable income to realize the deferred tax assets.

The Company’s U.S. federal returns remain open to examination for 2009 through 2011 and U.S. state jurisdictions are open for periods ranging from 2008 through 2011.

The Company does not believe that it has any significant uncertain tax positions at December 31, 2012, nor is this expected to change within the next twelve months due to the settlement and expiration of statutes of limitation.

The Company did not have any accrued interest or penalties associated with any unrecognized tax benefits nor was any interest expense recognized during the years ended December 31, 2012 and 2011.