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Income Taxes | 12 Months Ended
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Dec. 31, 2013
Income Tax Disclosure [Abstract] |
Income Taxes | The following represents a reconciliation of income tax expense and the amount that would be computed using the statutory federal income tax rates:
(in thousands) | 2013 |  | 2012 |  | 2011
Computed income tax expense at statutory federal income tax rate of 35% | $ | 10,201 |  |  | 35.0 | % |  | $ | 9,381 |  |  | 35.0 | % |  | $ | 4,613 |  |  | 35.0 | %
State income taxes, net of federal provision | 345 |  |  | 1.2 | % |  | 470 |  |  | 1.8 | % |  | (100 | ) |  | (0.8 | )%
Foreign tax rate differentials | 77 |  |  | 0.3 | % |  | (2,031 | ) |  | (7.6 | )% |  | (1,679 | ) |  | (12.7 | )%
U.S. tax on foreign earnings (net of foreign tax credits) | (1,831 | ) |  | (6.3 | )% |  | (595 | ) |  | (2.2 | )% |  | 1,105 |  |  | 8.4 | %
Tax resolutions, net | — |  |  | — | % |  | — |  |  | — | % |  | (103 | ) |  | (0.8 | )%
Change in valuation allowance | (2,184 | ) |  | (7.5 | )% |  | 14,220 |  |  | 53.1 | % |  | (55 | ) |  | (0.4 | )%
Proceeds from life insurance | (196 | ) |  | (0.7 | )% |  | (472 | ) |  | (1.8 | )% |  | — |  |  | — | %
Return to provision and other adjustments | 1,664 |  |  | 5.7 | % |  | (371 | ) |  | (1.4 | )% |  | (43 | ) |  | (0.3 | )%
Other, net | 514 |  |  | 1.8 | % |  | 241 |  |  | 0.9 | % |  | 150 |  |  | 1.1 | %
Income tax expense | $ | 8,590 |  |  | 29.5 | % |  | $ | 20,843 |  |  | 77.8 | % |  | $ | 3,888 |  |  | 29.5 | %
Viad is subject to regular and recurring audits by the taxing authorities in the jurisdictions in which the Company conducts or had previously conducted operations. These include U.S. federal and most state jurisdictions, and certain foreign jurisdictions including Canada, the United Kingdom and Germany. Viad exercises judgment in determining its income tax provision due to transactions, credits and calculations where the ultimate tax determination is uncertain. As of December 31, 2013, the Company recognized an increase in the liability for uncertain tax positions for continuing operations of approximately $736,000 as there were no accrued gross liabilities associated with uncertain tax positions as of December 31, 2012. As of December 31, 2013, Viad had accrued interest and penalties related to uncertain tax positions for continuing operations of $20,000. Viad classifies interest and penalties related to income tax liabilities as a component of income tax expense. The tax expense impact of the uncertain tax positions was $200,000 due to tax credit carryforwards that were available to offset the expense. The Company believes that it is reasonably possible that approximately $293,000 of its uncertain tax positions could be resolved or settled within the next twelve months, which would reduce the amount of accrued income taxes payable. During 2011, Viad recorded tax benefits related to the favorable resolution of tax matters in continuing operations of $103,000. These tax resolutions primarily represent the reversal of amounts accrued for tax and related interest and penalties in connection with uncertain tax positions which were effectively settled or for which there was a lapse of the applicable statute of limitations. In addition to the above, Viad had accrued gross liabilities associated with uncertain tax positions for discontinued operations of $636,000 as of both December 31, 2013 and 2012. In addition, as of December 31, 2013 and 2012, Viad had accrued interest and penalties related to uncertain tax positions for discontinued operations of $450,000 and $418,000, respectively. Future tax resolutions or settlements that may occur related to these uncertain tax positions would be recorded through discontinued operations (net of federal tax effects, if applicable). Viad believes that it is reasonably possible that the unrecognized tax benefits related to discontinued operations will be recognized or settled during the next 12 months as the statute of limitations related to this item will lapse on December 31, 2014. The following represents a reconciliation of the total amounts of liabilities associated with uncertain tax positions (excluding interest and penalties):
(in thousands) | Continuing Operations |  | Discontinued Operations |  | Total
Balance, January 1, 2011 | $ | — |  |  | $ | 636 |  |  | $ | 636 |
Reductions for tax positions taken in prior years | — |  |  | — |  |  | — |
Reductions for tax settlements | — |  |  | — |  |  | — |
Reductions for lapse of applicable statutes | — |  |  | — |  |  | — |
Balance at December 31, 2011 | — |  |  | 636 |  |  | 636 |
Reductions for tax positions taken in prior years | — |  |  | — |  |  | — |
Reductions for tax settlements | — |  |  | — |  |  | — |
Reductions for lapse of applicable statutes | — |  |  | — |  |  | — |
Balance at December 31, 2012 | — |  |  | 636 |  |  | 636 |
Additions for tax positions taken in prior years | 736 |  |  | — |  |  | 736 |
Reductions for tax positions taken in prior years | — |  |  | — |  |  | — |
Reductions for tax settlements | — |  |  | — |  |  | — |
Reductions for lapse of applicable statutes | — |  |  | — |  |  | — |
Balance at December 31, 2013 | $ | 736 |  |  | $ | 636 |  |  | $ | 1,372 |
Viad’s 2010 through 2013 U.S. federal tax years and various state tax years from 2009 through 2013 remain subject to income tax examinations by tax authorities. Additionally, 2005, 2006, 2008 and 2009 remain subject to examination due to federal net operating loss carryback claims. In addition, tax years from 2010 through 2013 related to Viad’s foreign taxing jurisdictions also remain subject to examination. Viad classifies liabilities associated with uncertain tax positions as non-current liabilities in its consolidated balance sheets unless they are expected to be paid within the next year. As of December 31, 2013 and 2012, the Company had liabilities associated with uncertain tax positions (including interest and penalties) of $1.8 million and $1.1 million, respectively, which were classified as non-current liabilities. Deferred income tax assets and liabilities included in the consolidated balance sheets as of December 31 related to the following:
(in thousands) | 2013 |  | 2012
Deferred tax assets: |  |  |
Tax credit carryforwards | $ | 26,945 |  |  | $ | 25,290 |
Pension, compensation and other employee benefits | 23,835 |  |  | 31,782 |
Provisions for losses | 13,674 |  |  | 15,229 |
Net operating loss carryforward | 4,794 |  |  | 1,755 |
State income taxes | 2,170 |  |  | 2,813 |
Other deferred income tax assets | 5,552 |  |  | 5,331 |
Total deferred tax assets | 76,970 |  |  | 82,200 |
Valuation allowance | (12,393 | ) |  | (14,576 | )
Foreign deferred tax assets included above | (1,713 | ) |  | (990 | )
Net deferred tax assets | 62,864 |  |  | 66,634 |
Deferred tax liabilities: |  |  |
Property and equipment | (7,861 | ) |  | (8,801 | )
Deferred tax related to life insurance | (4,842 | ) |  | (4,992 | )
Goodwill and other intangible assets | (959 | ) |  | (1,306 | )
Unremitted foreign earnings | (398 | ) |  | (978 | )
Other deferred income tax liabilities | (393 | ) |  | (176 | )
Total deferred tax liabilities | (14,453 | ) |  | (16,253 | )
Foreign deferred tax liabilities included above | 1,989 |  |  | 2,024 |
United States deferred tax assets | $ | 50,400 |  |  | $ | 52,405 |
Viad is required to estimate and record provisions for income taxes in each of the jurisdictions in which the Company operates. Accordingly, the Company must estimate its actual current income tax liability, and assess temporary differences arising from the treatment of items for tax purposes, as compared to the treatment for accounting purposes. These differences result in deferred tax assets and liabilities which are included in Viad’s consolidated balance sheets. The Company must assess the likelihood that deferred tax assets will be recovered from future taxable income and to the extent that recovery is not likely, a valuation allowance must be established. The Company uses significant judgment in forming a conclusion regarding the recoverability of its deferred tax assets and evaluates the available positive and negative evidence to determine whether it is more-likely-than-not that its deferred tax assets will be realized in the future. As of December 31, 2013 and 2012, Viad had gross deferred tax assets of $77.0 million and $82.2 million, respectively. These deferred tax assets reflect the expected future tax benefits to be realized upon reversal of deductible temporary differences, and the utilization of net operating loss and tax credit carryforwards. The Company considered all available positive and negative evidence regarding the future recoverability of its deferred tax assets, including the Company’s recent operating history, taxpaying history and future reversals of deferred tax liabilities. The Company also evaluated its ability to utilize its foreign tax credits, given its recent utilization history. These tax credits are subject to a 10-year carryforward period and begin to expire in 2019. Based on the Company’s assessment, it was determined during the fourth quarter of 2012 that the weight of the evidence indicated that certain deferred tax assets associated with foreign tax credit carryforwards no longer met the more-likely-than-not test regarding the realization of those assets. As a result, the Company recorded a valuation allowance of $13.4 million related to all of its foreign tax credit carryforwards. During 2013, the Company generated additional foreign tax credit carryforwards of $1.9 million for which an additional valuation allowance was recorded. However, the Company also determined, due to the taxable income associated with the Glacier Park possessory interest the Company received in the first quarter of 2014, it was more-likely-than-not that a portion of its previously existing foreign tax credit carryforwards would be utilized. Therefore, during the fourth quarter of 2013, the Company reversed $4.1 million of its valuation allowance related to those tax credits. Accordingly, the Company recorded a net decrease to income tax expense of $2.2 million and a decrease of $300,000 to deferred tax assets for a total decrease to income tax expense of $2.5 million related to changes in the valuation allowance associated with its foreign tax credit carryforwards. As of December 31, 2013 and 2012, Viad had federal, state and foreign net operating loss carryforwards of $96.0 million and $82.0 million, respectively, for which the Company had deferred tax assets of $4.8 million and $1.8 million, respectively. The state and foreign net operating loss carryforwards expire on various dates from 2014 through 2033. During 2013, the Company increased its valuation allowance related to state and foreign net operating loss carryforwards by $329,000. As of December 31, 2013 and 2012, Viad had a valuation allowance of $1.5 million and $1.2 million, respectively, related to those state and foreign deferred tax assets. With respect to all other deferred tax assets, management believes that recovery from future taxable income is more-likely-than-not. As noted above, Viad uses considerable judgment in forming a conclusion regarding the recoverability of its deferred tax assets. As a result, there are inherent uncertainties regarding the ultimate realization of these assets, which is primarily dependent on Viad’s ability to generate sufficient taxable income in future periods. In future periods, it is reasonably possible that the relative weight of positive and negative evidence regarding the recoverability of Viad’s deferred tax assets may change, which could result in a material increase or decrease in the Company’s valuation allowance. If such a change in the valuation allowance were to occur, it would result in a material increase or decrease to income tax expense in the period the assessment was made. As of December 31, 2013, Viad had tax credit carryforwards related to alternative minimum tax of $11.3 million that may be carried forward indefinitely. Additionally, as of December 31, 2013, Viad had foreign tax credit carryforwards of $15.0 million, of which $222,000 expire in 2019, $8.3 million expire in 2020, $4.4 million expire in 2021 and $2.1 million expire in 2033. The Company has a valuation allowance of $10.9 million related to the foreign tax credit carryforwards. Viad also had general business credits of $622,000 as of December 31, 2013, which expire at various dates from 2028 to 2033. Viad has not recorded deferred taxes on certain historical unremitted earnings of its Canadian subsidiaries as management intends to reinvest those earnings in its Canadian operations. As of December 31, 2013, the incremental unrecognized tax liability (net of estimated foreign tax credits) related to those undistributed earnings was approximately $1.0 million. To the extent that circumstances change and it becomes apparent that some or all of those undistributed earnings will be remitted to the U.S., Viad would accrue income taxes attributable to such remittance. Income tax expense consisted of the following:
(in thousands) | 2013 |  | 2012 |  | 2011
Current: |  |  |  |  |
United States: |  |  |  |  |
Federal | $ | (2,134 | ) |  | $ | (272 | ) |  | $ | (4,643 | )
State | (286 | ) |  | 2,189 |  |  | 1,292 |
Foreign | 9,606 |  |  | 7,652 |  |  | 8,163 |
Total current | 7,186 |  |  | 9,569 |  |  | 4,812 |
Deferred: |  |  |  |  |
United States: |  |  |  |  |
Federal | 1,113 |  |  | 11,127 |  |  | 992 |
State | 651 |  |  | 40 |  |  | (1,560 | )
Foreign | (360 | ) |  | 107 |  |  | (356 | )
Total deferred | 1,404 |  |  | 11,274 |  |  | (924 | )
Income tax expense | $ | 8,590 |  |  | $ | 20,843 |  |  | $ | 3,888 |
The aggregate tax benefit realized in connection with the vesting of restricted stock and the exercise of stock options was $404,000 for 2013, which was recorded as a credit to stockholders’ equity. During 2012 and 2011, the Company recorded tax deficiencies of $96,000 and $325,000, respectively, related to the vesting of restricted stock and the exercise of stock options, which were recorded as charges to stockholders’ equity. Eligible subsidiaries (including sold and discontinued businesses up to their respective disposition dates) are included in the consolidated federal and other applicable income tax returns of Viad. United States and foreign income from continuing operations before income taxes was as follows:
(in thousands) | 2013 |  | 2012 |  | 2011
Foreign | $ | 25,010 |  |  | $ | 29,645 |  |  | $ | 29,407 |
United States | 4,138 |  |  | (2,843 | ) |  | (16,227 | )
Income from continuing operations before income taxes | $ | 29,148 |  |  | $ | 26,802 |  |  | $ | 13,180 |

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- 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
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