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Income Taxes | 12 Months Ended
--- | ---
Dec. 31, 2013
Income Taxes [Abstract] |
Income Taxes | 10.INCOME TAXES The Company’s provision (benefit) for income taxes is summarized as follows:
Amounts in thousands |  | For the twelve months ended December 31,
|  | 2013 |  | 2012
U.S. Federal - Current |  | $ 25 |  | $ 67
U.S. Federal - Deferred |  | 0 |  | 0
Provision for U.S. federal income taxes |  | 25 |  | 67
Foreign - Current |  | $ 1,616 |  | $ 1,009
Foreign - Deferred |  | (348) |  | (48)
Provision for foreign income taxes |  | 1,268 |  | 961
Total provision for income taxes |  | $ 1,294 |  | $ 1,028
The Company’s effective income tax rate differs from the statutory federal income tax rate as follows:
Amounts in thousands | 2013 | 2012
U.S. Federal income tax statutory rate | 34.0% | 34.0%
Foreign income taxes | (18.5%) | (10.0%)
Equity in Polish investment | (5.4%) | 0.2%
State income tax (net of federal benefit) | (0.3%) | 0.8%
Valuation allowance | 5.7% | (2.6%)
Permanent and other items | 2.1% | (2.3%)
Total provision for income taxes | 17.6% | 20.1%
The effective tax rates of the Company’s foreign properties are impacted by the movement of exchange rates primarily due to loans, which are denominated in U.S. dollars. Therefore, foreign currency gains or losses recorded in each property’s local currency do not impact the Company’s earnings reported in U.S. dollars. The Company records deferred tax assets and liabilities based on the difference between the financial statement and income tax basis of assets and liabilities using the enacted statutory tax rate in effect for the year these differences are expected to be taxable or reversed. Deferred income tax expenses or credits are based on the changes in the asset or liability from period to period. The recorded deferred tax assets are reviewed for impairment on a quarterly basis by reviewing the Company’s internal estimates for future taxable income. The Company assesses the continuing need for a valuation allowance that results from uncertainty regarding its ability to realize the benefits of the Company’s deferred tax assets. We have a valuation allowance of $5.4 million on our U.S. deferred tax assets as of December 31, 2013 due to the uncertainty of future taxable income. We have a $0.8 million valuation allowance on our Calgary property deferred tax assets as of December 31, 2013 due to the uncertainty of future taxable income. We also have a $0.6 million valuation allowance on CCE’s deferred tax assets as of December 31, 2013 due to the uncertainty of future taxable income. The ultimate realization of deferred income tax assets depends on generation of future taxable income in the jurisdictions where the assets are located during the periods in which those temporary differences become deductible. If the Company concludes that its prospects for the realization of its deferred tax assets are more likely than not, the Company will then reduce its valuation allowance as appropriate and credit income tax. The Company’s deferred income taxes at December 31, 2013 and 2012 are summarized as follows:
Amounts in thousands | 2013 | 2012
Deferred tax assets (liabilities) - U.S. Federal and state: |  |
Deferred tax assets - current: |  |
Accrued liabilities and other | $ 169 | $ 181
Deferred tax (liabilities) - current: |  |
Prepaid expenses | (67) | (101)
Valuation allowance | (167) | (177)
Net deferred tax (liabilities) - current | (65) | (97)
Deferred tax assets - non-current: |  |
Amortization of goodwill for tax | 473 | 526
Amortization of startup costs | 317 | 359
Property and equipment | 971 | 1,089
NOL carry forward | 2,894 | 2,584
Accrued liabilities and other | 675 | 371
Total deferred tax assets - non-current | 5,330 | 4,929
Valuation allowance | (5,265) | (4,832)
Net deferred tax assets - non-current | 65 | 97
Total deferred tax assets - U.S. federal and state | $ 0 | $ 0
Deferred tax assets (liabilities) - foreign |  |
Deferred tax assets - current: |  |
NOL carryforward | $ 0 | $ 0
Other | 229 | 79
Deferred tax (liabilities) - current: |  |
Other | (96) | 0
Net deferred tax assets - current | 133 | 79
Deferred tax assets - non-current: |  |
Property and equipment | 1,771 | 621
NOL carryforward | 2,483 | 2,504
Tax credits | 262 | 348
Accrued liabilities and other | 453 | 322
Deferred tax (liabilities) - non current: |  |
Property and equipment | (2,477) | (2,682)
Contingent liability | (1,208) | 0
Others | (223) | 0
Valuation allowance | (1,400) | (1,745)
Net deferred tax (liabilities) - non-current | (339) | (632)
Total deferred tax (liabilities) - foreign | ($206) | ($553)
Net deferred tax (liabilities) | ($206) | ($553)
The Company has analyzed filing positions in all of the U.S. federal, state and foreign jurisdictions where it is required to file income tax returns, as well as all open tax years in these jurisdictions. The Company has identified its U.S. federal tax return, its state tax return in Colorado and its foreign tax returns in Canada and South Africa, where it previously owned and operated casinos, as “major” tax jurisdictions, as defined by the Code. The Company’s tax returns for the following periods are subject to examination:
Jurisdiction: | Periods
U.S. Federal | 2006 - 2012
U.S. State – Colorado | 2005 - 2011
Canada | 2006 - 2012
South Africa | 2008 - 2009
The Company has recognized a $0.1 million tax liability for uncertain tax positions taken on its U.S. tax return and has recognized a $0.2 million tax liability for an uncertain tax position on a foreign tax return. This adjustment has been recorded as a component of taxes payable in the accompanying consolidated balance sheet as of December 31, 2013. The Company may, from time to time, be assessed interest or penalties by major tax jurisdictions, although any such assessments historically have been minimal and immaterial to our financial results. The Company’s policy for recording interest and penalties associated with audits is to record such items as a component of earnings before income taxes. Penalties are recorded in general and administrative expenses and interest paid or received is recorded in interest expense or interest income, respectively, in the consolidated statement of earnings. As of December 31, 2013, the Company had not provided for taxes on undistributed foreign earnings that it consider s indefinitely reinvested. These earnings could become subject to income taxes if they are remitted as dividends, are loaned to the Company or any of the Company’s subsidiaries located in the United States, or if the Company sells its stock in the foreign subsid iaries. However, the Company believes that any additional taxes could be offset, in part or in whole, by foreign tax credits. The Company’s total amount of unrecognized tax benefit is summarized in the table below:
Amounts in thousands | 2013 | 2012
Unrecognized tax benefit - January 1 | $ 191 | $ 191
Gross increases - tax positions in prior period | 0 | 0
Gross decreases - tax positions in prior period | 0 | 0
Gross increases - tax positions in current period | 0 | 0
Settlements | 0 | 0
Lapse of statute of limitations | (45) | 0
Unrecognized benefit - December 31 | $ 146 | $ 191
The Company recognizes interest accrued related to unrecognized tax benefits and penalties as income tax expense. Related to the unrecognized tax benefits noted above, the Company accrued no penalties and interest of less than $0.1 million during 2013 and in total, as of December 31, 2013, recognized a liability of less than $0.1 million. During 2012, the Company accrued no penalties and interest of less than $0.1 million and in total, as of December 31, 2012, recognized a liability less than $0.1 million. Included in the balance of unrecognized tax benefits as of December 31, 2013 and 2012, is $0.1 million of tax benefits that, if recognized, would affect the effective tax rate. Also included in the balance of unrecognized tax benefits at December 31, 2013 and 2012, $0.1 million, of tax benefits that, if recognized, would result in adjustments to other tax accounts, primarily deferred taxes. The Company’s U.S. and foreign pre-tax income is summarized in the table below:
Amounts in thousands | 2013 | 2012
Income (loss) before taxes: |  |
U.S. | ($397) | $ 774
Foreign | 7,766 | 4,345
Total income before taxes | $ 7,369 | $ 5,119

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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=6881521&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 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 109 -Paragraph 136, 172 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 109 -Paragraph 43, 44, 45, 46, 47, 48, 49 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. + Details
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