Annual report pursuant to Section 13 and 15(d)

Income Taxes

v2.4.0.8
Income Taxes
 12 Months Ended
Dec. 31, 2013
Income Tax Disclosure [Abstract]  
Income Tax Disclosure [Text Block]
Income Taxes
 
The provision for or benefit from income taxes on continuing operations for the years ended December 31, 2013 and 2012 is comprised of the following:

 
2013
 
2012
Current:
 
 
 
Federal
$
—

 
$
—

State
180

 
270

Total current
180

 
270

Deferred:
 
 
 

Federal
—

 
(53
)
State
—

 
(9
)
Total deferred
—

 
(62
)
Provision for income taxes
$
180

 
$
208



The Company performs an analysis each year to determine whether the expected future income will more likely than not be sufficient to realize the deferred tax assets.  The Company's recent operating results and projections of future income weighed heavily in the Company's overall assessment.  As a result of this analysis, the Company continues to maintain a full valuation allowance against its federal and state net deferred tax assets at December 31, 2013 as the Company believes that it is more likely than not that these assets will not be realized. The tax effects of significant items comprising the Company’s deferred tax assets and (liabilities) as of December 31, 2013 and 2012 are as follows:

 
2013
 
2012
Current deferred tax assets (liabilities)
 
 
 
included in other current assets:
 
 
 
Allowances and reserves
$
1,217

 
$
1,742

Compensation
4,010

 
3,382

Valuation allowance on deferred tax assets
(5,227
)
 
(5,124
)
 
—

 
—

Noncurrent deferred tax assets (liabilities)
 
 

included in other long-term assets:
 

 
 

State net operating loss carryforwards
4,774

 
4,103

Federal net operating loss carryforwards
31,253

 
28,615

State taxes
1,124

 
1,123

Self insurance and other reserves
294

 
338

Property, plant and equipment
2,196

 
2,294

Intangible assets
8,269

 
9,249

Other reserves - restructuring
391

 
410

Compensation
—

 
31

Deferred revenue
6

 
226

Valuation allowance on deferred tax assets
(48,307
)
 
(46,389
)
 
—

 
—

Net deferred tax liability
$
—

 
$
—



Federal tax attribute carryforwards at December 31, 2013, consist primarily of approximately $89.7 million of federal net operating losses.  In addition, the Company has approximately $90.1 million of state net operating losses carryforwards.  The utilization of the federal carryforwards as an available offset to future taxable income is subject to limitations under federal income tax laws.  If the federal net operating losses are not utilized, they begin to expire in 2027, and current state net operating losses not utilized begin to expire this year.
 
A reconciliation of the difference between the federal statutory tax rates and the Company's effective tax rate from continuing operations is as follows:
 
 
2013
 
2012
Federal statutory rate
35.0
 %
 
35.0
 %
State income tax rate, net of Federal tax benefit
0.3
 %
 
2.5
 %
Meals and entertainment
(2.3
)%
 
—
 %
Valuation allowance
(35.9
)%
 
(38.1
)%
Other non-deductible
(1.3
)%
 
(0.4
)%
Other taxes
—
 %
 
0.2
 %
Net change in Federal and state reserves
—
 %
 
—
 %
Effective tax rate
(4.2
)%
 
(0.8
)%

 
The following table summarizes the change in uncertain tax benefit reserves for the two years ended December 31, 2013:

 
Unrecognized
 
Tax Benefits
Balance of unrecognized benefits as of January 1, 2011
$
1,117

Additions for tax positions related to the current year
—

Additions for tax positions of prior years
—

Reductions for tax positions of prior years
—

Balance as of December 31, 2012
$
1,117

Additions for tax positions related to the current year
—

Additions for tax positions of prior years
—

Reductions for tax positions of prior years
—

Balance as of December 31, 2013
$
1,117



As of December 31, 2013 and 2012, the total amount of gross unrecognized tax benefits was $1.1 million in each year.  The total amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate as of December 31, 2013 and 2012 was $1.1 million in each year.
 
The Company recognized interest and penalties of $0.2 million related to uncertain tax positions in income tax expense during each of the years ended December 31, 2013 and 2012, respectively.  At December 31, 2013 and 2012, accrued interest and penalties, net were $2.1 million and $1.9 million, respectively.
 
The Company and its subsidiaries file a U.S. Federal consolidated income tax return and consolidated and separate income tax returns in numerous states and local tax jurisdictions.  The following tax years remain subject to examination as of December 31, 2013:
 
Jurisdiction
Tax Years
Federal
2009- 2013
State and Local
2007 - 2013

To the extent there was a failure to file a tax return in a previous year; the statute of limitation will not begin until the return is filed. There were no examinations in process by the Internal Revenue Service as of December 31, 2013. In 2014, the Company was selected for examination by the Internal Revenue Service for the tax periods ending December 31, 2012 and December 31, 2011.