Stagwell Inc - 10-K filing on 2014-03-10

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2013

Schedule of Income before Income Tax, Domestic and Foreign [Table Text Block]

The components of the Company’s loss from continuing operations before income taxes, equity in affiliates and noncontrolling interests by taxing jurisdiction for the years ended December 31, were:


	2013			2012			2011
Loss:
US	$	21,242		$	(36,660	)	$	(17,460	)
Non-US		(156,832	)		(26,315	)		(15,181	)
	$	(135,590	)	$	(62,975	)	$	(32,641	)

Schedule Of Components Of Income Taxes Provision Benefit [Table Text Block]

The provision (benefit) for income taxes by taxing jurisdiction for the years ended December 31, were:


	2013			2012		2011
Current tax provision
US federal	$	—		$	—	$	—
US state and local		213			802		894
Non-US		923			329		557
		1,136			1,131		1,451
Deferred tax provision (recovery):
US federal		7,505			2,150		45,110
US state and local		1,027			299		7,750
Non-US		(13,959	)		5,973		(12,576	)
		(5,427	)		8,422		40,284
Income tax provision (recovery)	$	(4,291	)	$	9,553	$	41,735

Schedule of Effective Income Tax Rate Reconciliation [Table Text Block]

A reconciliation of income tax expense (recovery) using the statutory Canadian federal and provincial income tax rate compared with actual income tax expense for the years ended December 31, is as follows:


	2013			2012			2011
Loss from continuing operations before income taxes, equity in affiliates and noncontrolling interest	$	(135,590	)	$	(62,975	)	$	(32,641	)
Statutory income tax rate		26.5	%		26.5	%		31.0	%
Tax benefit using statutory income tax rate		(35,931	)		(16,688	)		(10,119	)
State and foreign taxes		1,136			1,131			1,451
Non-deductible stock-based compensation		24,357			7,699			7,143
Other non-deductible expense		942			1,176			1,482
Change to valuation allowance on items affecting taxable income		6,952			15,682			44,554
Effect of the change in tax rate		—			2,168			—
Noncontrolling interests		(1,712	)		(1,593	)		(2,368	)
Other, net		(35	)		(22	)		(408	)
Income tax expense (recovery)	$	(4,291	)	$	9,553		$	41,735
Effective income tax rate		(3.2	)%		15.2	%		127.9	%

Schedule of Deferred Tax Assets and Liabilities [Table Text Block]

The tax effects of significant temporary differences representing deferred tax assets and liabilities at December 31, were as follows:


	2013			2012
Deferred tax assets:
Capital assets and other	$	36,449		$	34,563
Net operating loss carry forwards		41,947			43,280
Interest deductions		21,753			19,285
Refinancing charge		10,153			—
Deferred acquisition consideration		26,779			21,418
Stock compensation		1,433			2,317
Pension plan		—			2,168
Unrealized foreign exchange		2,372			843
Capital loss carry forwards		16,180			17,408
Accounting reserves		4,769			4,721
Gross deferred tax asset		161,835			146,003
Less: valuation allowance		(137,961	)		(134,761	)
Net deferred tax assets		23,874			11,242
Deferred tax liabilities:
Pension plan		(1,112	)		—
Deferred finance charges		(420	)		(449	)
Capital assets		(178	)		(348	)
Goodwill amortization		(61,859	)		(53,875	)
Total deferred tax liabilities		(63,569	)		(54,672	)
Net deferred tax asset (liability)	$	(39,695	)	$	(43,430	)
Disclosed as:
Deferred tax assets	$	23,380		$	9,637
Deferred tax liabilities		(63,075	)		(53,067	)
	$	(39,695	)	$	(43,430	)

Schedule Of Changes In Tax Reserve [Table Text Block]

The Company identified an uncertainty relating to the future tax deductibility of certain intercompany interest and fees, to the extent that such future benefit will be established, the resolution of this position will have no effect with respect to the financial statements.


Changes in the Company’s reserve is as follows:
Balance December 31, 2010	$	3,624
Charges to income tax expense		—
Balance December 31, 2011		3,624
Charges to income tax expense		—
Settlement of uncertainty		(551	)
Balance December 31, 2012		3,073
Charges to income tax expense		—
Balance December 31, 2013	$	3,073