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Income Taxes

12 Months Ended

Dec. 31, 2016

Income Tax Disclosure [Abstract]

NOTE 18—INCOME TAXES

(a) Composition of income (loss) from continuing operations before income taxes is as follows:

			Year ended December 31,
			2016				2015
Domestic			$	(142	)		$	(5,409	)
Foreign				60				(88	)
			$	(82	)		$	(5,497	)

Income tax expense (benefit) consists of the following:

		Year ended December 31,
		2016				2015
Current:
Federal		$	—			$	—
State and local			—				—
Foreign			—				(50	)
			—				(50	)
Deferred:
Federal			—				—
State and local			—				—
Foreign			19				259
			19				259
Total income tax expense		$	19			$	209

(b) Effective Income Tax Rates

Set forth below is a reconciliation between the federal tax rate and the Company’s effective income tax rates with respect to continuing operations:

		Year ended December 31,
		2016				2015
Statutory Federal rates			34	%			34	%
Increase (decrease) in income tax rate resulting from:
Tax on foreign activities			(2	)			6
Other, net (primarily permanent differences)			(200	)			(4	)
Valuation allowance			145				(40	)
Effective income tax rates			(23	)%			(4	)%

(c) Analysis of Deferred Tax Assets and (Liabilities)

		As of December 31,
		2016				2015
Deferred tax assets (liabilities) consist of the following:
Employee benefits and deferred compensation		$	1,745			$	1,722
Investments and asset impairments			2,619				2,693
Other temporary differences			(807	)			(937	)
Net operating loss carryforwards			21,977				21,957
			25,534				25,435
Valuation allowance			(25,534	)			(25,208	)
Net deferred tax assets		$	—			$	227

Deferred tax assets in 2015 relate to the Company’s former DSIT subsidiary. Following the closing of the DSIT Transaction (see Note 3), the Company no longer consolidates the assets and liabilities of DSIT, but rather reports its investment in DSIT using the equity method. Accordingly, the Company eliminated these deferred tax assets as part of the deconsolidation of DSIT.

Valuation allowances relate principally to net operating loss carryforwards related to the Company's consolidated tax losses as well as state tax losses related the Company's OmniMetrix subsidiary and book-tax differences related asset impairments and stock compensation expense of the Company. During the year ended December 31, 2016, the valuation allowance increased by $326.

(d) Summary of Tax Loss Carryforwards

As of December 31, 2016, the Company had various net operating loss carryforwards expiring as follows:

Expiration			Federal*				State
2023 - 2029			$	503				—
2030 - 2036				61,692				13,000
Total			$	62,195				13,000

* The utilization of a portion of these net operating loss carryforwards is limited due to limits on utilizing net operating loss carryforwards under Internal Revenue Service regulations following a change in control.

(e) Taxation in the United States

On October 22, 2004, The American Jobs Creation Act (the “Act”) was signed into law. The Act includes a deduction of 85% of certain foreign earnings that are repatriated, as defined in the Act. The Company’s foreign earnings were derived from the Company’s DSIT subsidiary up to the date of the DSIT Transaction (see Note 3).

As a holding company without other business activity in Delaware, the Company is exempt from Delaware state income tax. Thus, the Company’s statutory income tax rate on domestic earnings is the federal rate of 34%.

(f) Uncertain Tax Positions (UTP)

As of December 31, 2015 and 2016, no interest or penalties were accrued on the balance sheet related to UTP.

During the years ending December 31, 2015 and 2016, the Company had no changes in unrecognized tax benefits or associated interest and penalties as a result of tax positions made during the current or prior periods with respect to its continuing or discontinued operations.

The Company is subject to U.S. Federal and state income tax. As of January 1, 2017, the Company is no longer subject to examination by U.S. Federal taxing authorities for years before 2013, for years before 2012 for state income taxes. During 2014, the Company’s U.S. Federal income tax returns for the years ended December 31, 2011 through December 31, 2012 were examined by the IRS. No material adjustments were made by the IRS in the course of their audit.