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INCOME TAXES (TABLES) | 12 Months Ended
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Dec. 31, 2015
INCOME TAXES [ABSTRACT] |
Sources of Pre-Tax Accounting Income | The sources of pre-tax operating income are as follows (in thousands):
|  | Year Ended December 31, |
|  | 2015 |  | 2014 |  | 2013 |
Domestic |  | $ | 25,402 |  | $ | 20,569 |  | $ | 10,816 |
Foreign |  |  | 60,487 |  |  | 79,890 |  |  | 81,253 |
Total |  | $ | 85,889 |  | $ | 100,459 |  | $ | 92,069 |
Components of Income Tax Expense (Benefit) | The components of the Company’s Provision for (benefit from) income taxes are as follows (in thousands):
|  | Year Ended December 31, |
|  | 2015 |  | 2014 |  | 2013 |
Current provision for (benefit from) |  |  |  |  |  |  |  |  |  |
Federal |  | $ | 4,094 |  | $ | (699) |  | $ | (320) |
State |  |  | 1,829 |  |  | 270 |  |  | 150 |
Foreign |  |  | 4,764 |  |  | 13,957 |  |  | 13,876 |
Total current provision for (benefit from) |  |  | 10,687 |  |  | 13,528 |  |  | 13,706 |
Deferred provision for (benefit from) |  |  |  |  |  |  |  |  |  |
Federal |  |  | (1,895) |  |  | 10,148 |  |  | 4,674 |
State |  |  | 1,085 |  |  | 423 |  |  | 195 |
Foreign |  |  | 10,127 |  |  | (1,057) |  |  | 2,023 |
Total deferred provision for (benefit from) |  |  | 9,317 |  |  | 9,514 |  |  | 6,892 |
Total provision for (benefit from) income taxes |  | $ | 20,004 |  | $ | 23,042 |  | $ | 20,598 |
Effective Income Tax Rate Reconciliation Table | The following reconciles the Company’s effective tax rate to the federal statutory rate (in thousands):
|  | Year Ended December 31, |
|  | 2015 |  | 2014 |  | 2013 |
Income tax per U.S. federal statutory rate (35%) |  | $ | 30,062 |  | $ | 35,161 |  | $ | 32,224 |
State income taxes, net of federal deduction |  |  | 1,603 |  |  | 1,525 |  |  | 210 |
Change in valuation allowances |  |  | 3,923 |  |  | 256 |  |  | 3,266 |
Foreign income taxes at different rates than the U.S. |  |  | (14,490) |  |  | (17,824) |  |  | (20,529) |
Foreign withholding taxes |  |  | 958 |  |  | 257 |  |  | 2,504 |
Losses in international markets without tax benefits |  |  | 1,999 |  |  | 1,649 |  |  | 779 |
Nondeductible compensation under Section 162(m) |  |  | 512 |  |  | 817 |  |  | 1,847 |
Liabilities for uncertain tax positions |  |  | 1,756 |  |  | 1,435 |  |  | 77 |
Permanent difference related to foreign exchange gains |  |  | 162 |  |  | (11) |  |  | (122) |
(Income) losses of foreign branch operations |  |  | (517) |  |  | 225 |  |  | 1,447 |
Non-taxable earnings of noncontrolling interest |  |  | (1,349) |  |  | (1,141) |  |  | (1,172) |
Foreign dividend less foreign tax credits |  |  | (4,425) |  |  | (1,428) |  |  | (2,587) |
Increase in deferred tax liability - branch losses in UK |  |  | (2,530) |  |  | (75) |  |  | (954) |
Decrease (increase) to deferred tax asset - change in tax rate |  |  | (526) |  |  | (443) |  |  | (68) |
State income tax credits and net operating losses |  |  | (1,477) |  |  | (142) |  |  | 615 |
Foreign earnings taxed currently in U.S. |  |  | 2,839 |  |  | 2,696 |  |  | 2,907 |
Other |  |  | 1,504 |  |  | 85 |  |  | 154 |
Income tax per effective tax rate |  | $ | 20,004 |  | $ | 23,042 |  | $ | 20,598 |
Schedule of Deferred Tax Assets and Liabilities | The Company’s deferred income tax assets and liabilities are summarized as follows (in thousands):
|  | Year Ended December 31, |
|  | 2015 |  | 2014 |
Deferred tax assets, gross |  |  |  |  |  |  |
Accrued workers compensation, deferred compensation and employee benefits |  | $ | 10,509 |  | $ | 17,030 |
Allowance for doubtful accounts, insurance and other accruals |  |  | 4,860 |  |  | 4,554 |
Amortization of deferred rent liabilities |  |  | 2,500 |  |  | 2,201 |
Net operating losses |  |  | 19,522 |  |  | 11,296 |
Equity compensation |  |  | 3,505 |  |  | 2,997 |
Customer acquisition and deferred revenue accruals |  |  | 16,610 |  |  | 16,241 |
Federal and state tax credits, net |  |  | 10,057 |  |  | 10,621 |
Depreciation and amortization |  |  | 6,265 |  |  | — |
Unrealized losses on derivatives |  |  | 16,644 |  |  | 11,686 |
Other |  |  | 2,655 |  |  | 12,749 |
Total deferred tax assets, gross |  |  | 93,127 |  |  | 89,375 |
Valuation allowances |  |  | (10,139) |  |  | (10,721) |
Total deferred tax assets, net |  |  | 82,988 |  |  | 78,654 |
Deferred tax liabilities |  |  |  |  |  |  |
Depreciation and amortization |  |  | — |  |  | (7,035) |
Contract acquisition costs |  |  | (25,667) |  |  | (11,768) |
Future losses in UK |  |  | — |  |  | (2,530) |
Intangible assets |  |  | (6,082) |  |  | (7,628) |
Other |  |  | (2,490) |  |  | (355) |
Total deferred tax liabilities |  |  | (34,239) |  |  | (29,316) |
Net deferred tax assets |  | $ | 48,749 |  | $ | 49,338 |
Valuation Allowance Rollforward | Activity in the Company’s valuation allowance accounts consists of the following (in thousands):
|  | Year Ended December 31, |
|  | 2015 |  | 2014 |  | 2013 |
Beginning balance |  | $ | 10,721 |  | $ | 10,792 |  | $ | 20,909 |
Additions of deferred income tax expense |  |  | 4,300 |  |  | 946 |  |  | 4,218 |
Reductions of deferred income tax expense |  |  | (4,882) |  |  | (1,017) |  |  | (14,335) |
Ending balance |  | $ | 10,139 |  | $ | 10,721 |  | $ | 10,792 |
Expiration of Net Operating Loss Carryforwards | As of December 31, 2015, after consideration of all tax loss and tax credit carry back opportunities, the Company had tax affected tax loss carry forwards worldwide expiring as follows (in thousands):
2016 |  | $ | 1,616
2017 |  |  | 133
2018 |  |  | 316
2019 |  |  | 295
After 2019 |  |  | 12,688
No expiration |  |  | 4,473
Total |  | $ | 19,521
Reserve for Uncertain Tax Positions Rollforward | The tabular reconciliation of the reserve for uncertain tax benefits on a gross basis without interest for the three years ended December 31, 2015 is presented below (in thousands):
Balance as of December 31, 2012 |  | $ | 358
Additions for current year tax positions |  |  | —
Reductions in prior year tax positions |  |  | —
Balance as of December 31, 2013 |  |  | 358
Additions for current year tax positions |  |  | 1,303
Reductions in prior year tax positions |  |  | —
Balance as of December 31, 2014 |  |  | 1,661
Additions for current year tax positions |  |  | 1,048
Reductions in prior year tax positions |  |  | —
Balance as of December 31, 2015 |  | $ | 2,709
Jurisdictions Open to Income Tax Examination | The following table presents the major tax jurisdictions and tax years that are open as of December 31, 2015 and subject to examination by the respective tax authorities:
Tax Jurisdiction |  | Tax Year Ended
United States |  | 2012 to present
Argentina |  | 2010 to present
Australia |  | 2011 to present
Brazil |  | 2010 to present
Canada |  | 2008 to present
Mexico |  | 2010 to present
Philippines |  | 2013 to present
Spain |  | 2011 to present

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