NetSpend 2014 Annual Report Download - page 67

Years Ended December 31,
(in thousands) 2014 2013 2012
Components of income before income tax expense:
Domestic ..................................................... $369,888 328,052 319,709
Foreign ....................................................... 23,041 24,424 33,164
Total income before income tax expense ............................. $392,929 352,476 352,873
Income tax expense differed from the amounts computed by applying the statutory U.S. federal income tax rate
of 35% to income before income taxes, noncontrolling interest and equity in income of equity investments as a
result of the following:
Years Ended December 31,
(in thousands) 2014 2013 2012
Computed “expected” income tax expense .......................... $137,525 123,367 123,505
Increase (decrease) in income tax expense resulting from:
International tax rate differential and equity income .................. 6,541 1,870 1,870
State income tax expense, net of federal income tax effect ............ 4,823 3,408 2,101
Increase (decrease) in valuation allowance .......................... (4,550) 1,715 1,239
Tax credits .................................................... (3,459) (6,141) (3,787)
Deduction for domestic production activities ........................ (8,750) (8,225) (5,727)
Permanent differences and other, net .............................. (2,369) (5,013) (5,085)
Total income tax expense .......................................... $129,761 110,981 114,116
Temporary differences between the financial statement carrying amounts and tax bases of assets and liabilities
that give rise to significant portions of the net deferred tax liability as of December 31, 2014 and 2013 relate to
the following:
As of December 31,
(in thousands) 2014 2013
Deferred income tax assets:
Net operating loss and income tax credit carryforwards ........................... $ 31,978 24,079
Allowances for doubtful accounts and billing adjustments ......................... 1,328 728
Deferred revenue .......................................................... 31,240 20,111
Other, net ................................................................ 49,192 50,960
Total deferred income tax assets ............................................... 113,738 95,878
Less valuation allowance for deferred income tax assets .......................... (18,963) (14,691)
Net deferred income tax assets ................................................. 94,775 81,187
Deferred income tax liabilities:
Excess tax over financial statement depreciation ................................ (53,527) (45,727)
Computer software development costs ........................................ (67,703) (55,074)
Purchase accounting adjustments ............................................. (136,701) (168,689)
Foreign currency translation ................................................. (7,642) (10,291)
Other, net ................................................................ (18,830) (12,003)
Total deferred income tax liabilities ........................................... (284,403) (291,784)
Net deferred income tax liabilities ............................................ $(189,628) (210,597)
Total net deferred tax assets (liabilities):
Current ................................................................... $ 15,190 14,158
Noncurrent ............................................................... (204,818) (224,755)
Net deferred income tax liability ................................................ $(189,628) (210,597)
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