| INCOME TAXES | INCOME TAXES The components of income (loss) before income taxes and income (loss) in equity interests are as follows: Year Ended December 31, 2015 2014 2013 Domestic $ 32,382 $ (326,935 ) $ 31,291 Foreign (28,156 ) (6,240 ) (19,634 ) Income (loss) before income taxes and income (loss) in equity interests $ 4,226 $ (333,175 ) $ 11,657 Income taxes relating to the Company’s operations are as follows: Years Ended December 31, 2015 2014 2013 Current income taxes: U.S. Federal $ (7,296 ) $ 2,018 $ 2,814 State and local (8,537 ) (692 ) (1,357 ) Foreign 969 3,496 (10,308 ) Total current income taxes (14,864 ) 4,822 (8,851 ) Deferred income taxes: U.S. Federal 9,197 (36,744 ) 24,285 State and local (1,577 ) (9,770 ) 5,735 Foreign (1,225 ) 1,910 (1,901 ) Total deferred income taxes 6,395 (44,604 ) 28,119 (Benefit from) provision for income taxes $ (8,469 ) $ (39,782 ) $ 19,268 The tax effects of temporary differences that give rise to the Company’s deferred tax assets and liabilities are as follows: December 31, 2015 2014 Deferred tax assets: Allowance for doubtful accounts $ 1,136 $ 941 Accrued expenses and other liabilities 4,421 9,731 Tax loss carry-forwards 57,205 71,916 Tax credits 55,531 55,312 Non-cash stock based compensation expense 3,170 6,552 Valuation allowance (70,155 ) (69,807 ) Deferred tax assets 51,308 74,645 Deferred tax liabilities: Foreign investments (2,317 ) (12,166 ) Property and equipment (28,491 ) (25,018 ) Goodwill and intangibles (23,315 ) (11,199 ) Deferred tax liabilities (54,123 ) (48,383 ) Net deferred tax (liabilities) assets $ (2,815 ) $ 26,262 As of December 31, 2015 and 2014 , net current deferred tax assets were $794 and $1,995 , respectively, net current deferred tax liabilities were $554 and $0 , respectively, net non-current deferred tax assets were $6,953 and $24,267 , respectively, and net non-current deferred tax liabilities were $10,008 and $0 , respectively. At December 31, 2015 , the Company has U.S. foreign tax credit carryovers and research and experimentation tax credit carryovers of $51,800 and $3,670 , respectively, that expire in stages beginning in 2016 through 2025 and 2029 through 2034, respectively. The Company has net operating loss carry-forwards in various foreign countries around the world of $220,750 , $207,100 of which have no expiration date and $13,650 of which expire in stages in years 2016 through 2022. In the U.S., the Company utilized tax loss carryovers to reduce domestic taxes of $12,506 and $0 in 2015 and 2014 , respectively, that would otherwise have been payable. Utilization of our net operating losses and tax credit carry-forwards may be subject to substantial annual limitations due to the ownership change limitations provided by the United States Internal Revenue Code. Such annual limitations could result in the expiration of the net operating loss and tax credit carry-forwards before their utilization. The events that may cause ownership changes include, but are not limited to, a cumulative stock ownership change of greater than 50% over a three year period. Realization of the Company’s net deferred tax assets is dependent upon the Company generating sufficient taxable income in future years in the appropriate tax jurisdictions to obtain a benefit from the reversal of deductible temporary differences and from attribute carry-forwards which include losses and tax credits. In assessing the need for a valuation allowance, the Company has considered all positive and negative evidence including scheduled reversals of deferred tax liabilities, projected future taxable income, tax planning strategies and recent financial performance. Since this evaluation requires considerable judgment and consideration of events that may occur in future years, our conclusion could be materially different if certain of our expectations do not occur. To the extent actual results are different, it may require a material charge to income in the period in which such events occur. The Company has concluded that it is more likely than not that certain deferred tax assets will not be realized, principally net operating losses in certain foreign jurisdictions, and a portion of the carryovers of foreign tax credits. Determining the amount of required valuation allowances necessitates significant judgment. We review utilization of tax assets on a jurisdiction by jurisdiction basis and consider such factors as recent operating history and future business forecasts. In making this assessment we give greater weight to evidence that is objectively verifiable comprising primarily of past operating history and reversing taxable differences. Operations in certain countries have a long history of continual tax losses, so a valuation allowance has been recorded on all of their deferred tax assets. In order to realize its deferred tax asset for foreign tax credit carryovers the Company is required to have sufficient U.S. taxable income, and sufficient “foreign source” income as defined by the U.S. tax code, regulations and interpretations thereunder. In evaluating future realization of deferred tax assets for foreign tax credit carryovers the Company forecasts future income levels and characterization thereof. The Company prepares tax credit realization models using varying scenarios and assumptions, and considers qualifying tax planning strategies. At December 31, 2015 , the total carryover for foreign tax credits is $51,800 . The Company believes it is more likely than not that approximately $22,000 of foreign tax credit carryovers will not be realized before their expiration. The income tax provision from continuing operations was increased by $4,318 , $25,123 and $5,221 in 2015 , 2014 and 2013, respectively, due to valuation allowances, $696 , $21,347 and $1,691 of which related to deferred tax assets that existed at the beginning of the respective years. In addition, in 2015 the valuation allowance was increased by $3,000 due to recognition of uncertain tax positions which are not considered more likely than not to be realized, and the valuation allowance decreased by $4,248 due to expiration of certain foreign losses and foreign currency translation changes, and $2,603 due to enacted tax rate reductions on deferred tax assets with full valuation allowances. The valuation allowance decreased $4,222 in 2014 due to expiration of losses with full valuation allowances and deconsolidation of certain subsidiaries with tax valuation allowances (see Note 11 – Deconsolidation of Subsidiaries ), and was decreased by $4,472 in 2013 primarily due to the effect of enacted reductions in the tax rates on deferred tax assets with a full valuation allowance, or expiration of tax losses with a full valuation allowance. These additional items did not result in a net charge or benefit to the tax provision. Income taxes related to the Company’s income (loss) before income taxes and income (loss) in equity interests differ from the amount computed using the Federal statutory income tax rate as follows: Year Ended December 31, 2015 2014 2013 Income taxes at Federal statutory rate $ 1,480 $ (116,609 ) $ 4,081 State income taxes, net of Federal income tax effect 2,065 (13,767 ) 1,152 Foreign tax rate differences 3,740 2,148 5,559 Change in valuation allowance 7,318 20,901 749 Reversals of accrued income tax (10,618 ) (1,143 ) (12,391 ) Interest expense on tax liabilities, net of reversals (7,945 ) 710 (189 ) Disposal of investments (7,529 ) — — Non-deductible compensation and other expenses 2,063 915 1,914 Effect of foreign partnerships and joint venture 168 2,750 — Tax benefit deficiencies 789 — — Effect of intercompany loans — 392 250 Non-deductible goodwill impairment — 65,938 — Research and experimentation tax credit — (2,017 ) — Sale of noncontrolling interest — — 18,143 (Benefit from) provision for income taxes $ (8,469 ) $ (39,782 ) $ 19,268 For the years ended December 31, 2015 , 2014 and 2013, the Company has recorded a tax (benefit) provision in discontinued operations of $22,274 , $4,491 and $(2,670) , respectively. The tax provision recorded to discontinued operations in 2015 relates to the disposal of our remaining 50.01% interest in our former South Korean subsidiary, and is comprised of reclassified taxes of the discontinued operation of $3,563 and a provision of $18,711 on the net gain of $76,100 recognized on the disposal (see Note 4 - Discontinued Operations ). In the first quarter of 2015, the Company disposed of the majority of its 50% interest in CareerOne, resulting in a $4,896 increase to its tax provision (see Note 12 - Investments ). In the third quarter of 2015, the Company recorded a tax benefit of $8,930 due to a loss on our remaining 10% interest in a joint venture in China (see Note 4 - Discontinued Operations ). In the fourth quarter of 2014, the Company recorded a pre-tax charge for impairment of goodwill in the amount of $325,800 . The Company recorded a deferred tax benefit of $62,753 with respect to the portion of impaired goodwill which is deductible for tax purposes (see Note 5 – Goodwill and Intangible Assets ). In 2014, the tax provision was increased by $5,543 due to a gain of $11,828 related to the deconsolidation of the Company’s subsidiaries in Poland, Hungary and the Czech Republic (see Note 11 – Deconsolidation of Subsidiaries ). In November 2013, the Company entered in to an agreement to sell a 49.99% interest in JobKorea Ltd., its then-wholly owned subsidiary in South Korea, to H&Q Korea for an aggregate purchase price of $90,000 (see Note 3 – Noncontrolling Interest ). The transaction, which was accounted for as a sale of a noncontrolling interest, resulted in a sale for tax purposes. A tax provision of $30,853 was recorded on the transaction of which $12,709 was charged to stockholder’s equity and $18,143 was charged to the continuing operations tax provision. As a result of the sale, the remaining 50.01% investment retained by the Company was characterized as a partnership for U.S. tax reporting purposes. On October 13, 2015 the Company sold its remaining 50.01% ownership position in JobKorea to H&Q Korea. In 2015, 2014 and 2013, the Company repatriated $10,018 , $3,121 and $13,385 , respectively, of cash from its former subsidiary in South Korea. A provision has not been made for United States or additional foreign taxes on substantially all undistributed earnings of foreign subsidiaries as the Company plans to utilize these undistributed earnings to finance expansion or operating requirements of subsidiaries outside of the United States or due to local country restrictions. Such earnings will continue to be indefinitely reinvested but could become subject to additional tax if they were remitted as dividends or were loaned to the Company or United States affiliates, or if the Company should sell its stock in the foreign subsidiaries. Due to various complexities in computing the residual U.S. tax liability, particularly when the timing or form of future repatriations has not been determined, it is not practicable to determine the amount of additional tax, if any, that might be payable on undistributed foreign earnings. The Company estimates its undistributed foreign earnings for which deferred taxes have not been provided are approximately $21,000 . As of December 31, 2015 and 2014 , the Company has recorded a liability for $36,348 and $54,636 respectively, which includes unrecognized tax benefits of $23,059 and $30,389 , respectively, and estimated accrued interest and penalties of $13,289 and $24,247 , respectively. Interest and penalties related to underpayment of income taxes are classified as a component of the (benefit from) provision for income taxes in the Company’s consolidated statement of operations. Interest accrued on unrecognized tax benefits included in the 2015 , 2014 and 2013 income tax provision in the statement of operations was $1,707 , $2,695 , and $2,932 , respectively. In 2015 , 2014 and 2013 interest expense was recorded net of reversals of prior years’ interest and penalties of $12,607 , $1,523 , and $3,248 , respectively. The net tax effect of interest, penalties and reversals was a charge (credit) of $(7,945) , $710 , and $(189) in the years ended December 31, 2015, 2014 and 2013, respectively. A reconciliation of the total amount of unrecognized tax benefits is as follows: 2015 2014 2013 Balance, beginning of period $ 30,389 $ 30,005 $ 40,075 Gross increases: tax positions taken in prior periods 7,571 — 515 Gross decreases: tax positions taken in prior periods (13,424 ) (1,040 ) (13,042 ) Gross increases: tax positions taken in current year 1,352 2,911 2,457 Gross decreases: lapse of statute of limitation (2,829 ) (1,487 ) — Balance, end of period $ 23,059 $ 30,389 $ 30,005 If the unrecognized tax benefits at December 31, 2015 , 2014 and 2013 were recognized in full, $23,059 , $30,389 , and $30,005 , respectively, would impact the effective tax rate. During 2015, the Company recognized previously unrecognized tax positions of $16,253 which, net of related deferred tax assets and accrued competent authority recovery, favorably impacted the effective tax rate by $10,618 . Of the recognized benefits approximately $3,000 are more likely than not to not be realized and the valuation allowance was increased by $3,000 , $13,424 of the recognized benefits were due to resolutions of tax examinations, and $2,829 was due to the expiration of statutes of limitations. The Company also reversed accrued interest and penalties on unrecognized tax positions of $12,607 , which, net of reversals of related deferred tax assets, favorably impacted the effective rate by $8,977 . The total net effect of the recognition of prior tax benefits, the offsetting effect of tax valuation allowances, and reversals of accrued interest and penalties was a tax benefit of $16,595 . The tax matters relate primarily to allocation of income among tax jurisdictions. During 2014, the Company recognized previously unrecognized tax positions of $2,525 which on a net of tax basis favorably impacted the effective rate by $1,143 , primarily as a result of lapses of statutes of limitations. The Company also reversed accrued interest on unrecognized tax positions of $1,523 , which favorably impacted the effective rate by $921 . The total net effect of the reversals of tax and interest was a tax benefit of $2,064 . The tax matters reversed relate primarily to allocation of income among tax jurisdictions. During 2013, the Company recognized previously unrecognized tax positions of $12,979 which on a net of tax basis favorably impacted the effective rate by $12,391 as a result of resolutions of tax examinations and lapses of statutes of limitations. The Company also reversed accrued interest on unrecognized tax positions of $3,248 , which favorably impacted the effective rate by $1,963 . The tax matters reversed relate primarily to characterization of certain intercompany loans for tax purposes and allocation of income among jurisdictions. The Company conducts business globally and as a result, the Company or one or more subsidiaries is subject to United States federal income taxes and files income tax returns in various states and approximately 40 foreign jurisdictions. In the normal course of business, the Company is subject to tax examinations by taxing authorities including major jurisdictions such as Germany, United Kingdom, and the United States as well as other countries in Europe and the Asia/Pacific region. The Company is generally no longer subject to examinations with respect to returns that have been filed for years prior to 2011 in Germany, 2013 in the United Kingdom, and 2012 in the United States. Tax years are generally considered closed from examinations when the statute of limitations expires. The United States Internal Revenue Service has recently commenced a tax examination of the year ended December 31, 2013. The examination is in its very early stages and no material adjustments have been proposed. The Company estimates that it is reasonably possible that unrecorded tax benefits may be reduced by an amount ranging from $0 to $4,000 in the next twelve months due to expirations of statutes of limitations or resolutions of examinations. The tax matters relate to allocation of income between tax jurisdictions and the amount of tax loss carryovers. |
