Higher One Holdings, Inc. - 10-K filing on 2014-03-10

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2013

The components of income tax expense for the years ended December 31, 2013, 2012 and 2011, were as follows:

	2013			2012			2011
Current income tax expense
Federal	$	14,839		$	18,788		$	17,131
State and local		1,100			1,380			1,471
Total		15,939			20,168			18,602

Deferred income tax benefit
Federal		(6,314	)		1,992			(807	)
State and local		(273	)		(136	)		(871	)
Total		(6,587	)		1,856			(1,678	)
Income tax expense	$	9,352		$	22,024		$	16,924

Reconciliation of Expected Income Tax Expense at Statutory Federal Income Tax Rate to Effective income Tax Rate

The reconciliation of expected income tax expense at the statutory federal income tax rate to the effective income tax rate is as follows:

	2013			2012		2011
Expected federal income tax expense	$	8,218		$	20,613	$	17,086
Stock-based compensation		605			560		491
Non-deductible expenses		60			71		(465	)
State tax expense, net of federal tax effect		442			761		85
Federal credits		(53	)		-		(253	)
Other		80			19		(20	)
Income tax expense	$	9,352		$	22,024	$	16,924

Deferred Tax (Liabilities) Assets

Deferred tax assets (liabilities) reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of net deferred tax (liabilities) assets are as follows:

	December 31,
	2013								2012
	Deferred				Deferred				Deferred				Deferred
	Tax				Tax				Tax				Tax
	Assets				Liabilities				Assets				Liabilities

Class action settlement accrued expense		$	6,034			$	–			$	–			$	–
Stock options			2,691				–				2,007				–
Tax credits			834				–				850				–
Intangible assets			–				(651	)			1,330				–
Fixed assets			–				(5,400	)			–				(6,402	)
Other			1,122				(9	)			630				(356	)
Gross deferred tax assets and liabilities			10,681				(6,060	)			4,817				(6,758	)
Valuation allowance			(1,119	)			–				(1,142	)			–
Net deferred tax assets and liabilities		$	9,562			$	(6,060	)		$	3,675			$	(6,758	)

Reconciliation of Beginning and Ending Amounts of Unrecognized Tax Benefits

A reconciliation of the beginning and ending amounts of unrecognized tax benefits for the years ended December 31, 2013, 2012 and 2011 are as follows:

	2013			2012			2011
Balance at January 1	$	345		$	342		$	606
Additions for tax positions related to the current year		76			17			53
Additions for tax positions of prior years		29			18			243
Reductions for tax positions of prior years		–			(10	)		(402	)
Settlements		–			–			(158	)
Reduction due to statute of limitation expiration		(24	)		(22	)		–
Balance at December 31	$	426		$	345		$	342