World Fuel Services 2014 Annual Report Download - page 80

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Puerto Rico, the United Kingdom and The Netherlands. We have recorded a deferred tax asset of $4.8 million reflecting the
benefit of the NOL carryforward as of December 31, 2014. This deferred tax asset expires as follows (in thousands):
Deferred
Expiration Date Tax Asset
December 31, 2016 $ 73
December 31, 2021 124
December 31, 2023 189
December 31, 2024 472
Indefinite 3,961
Total $ 4,819
In addition, as a result of certain realization requirements of accounting guidance on stock compensation, the table of
deferred tax assets and liabilities shown above does not include certain deferred tax assets as of December 31, 2014 and
2013 that arose directly from income tax deductions related to equity compensation in excess of compensation recognized
for financial reporting. As of December 31, 2014 and 2013, we had no foreign tax credits related to the excess stock
compensation deductions that resulted in an income tax deduction or credit before the realization of the income tax benefit
from the deduction or credit. We use the “with and without” method for purposes of determining when excess income tax
benefits have been realized.
As of December 31, 2014 and 2013, our annual capital in excess of par value pool of windfall income tax benefits related to
employee compensation was estimated to be $1.0 million and $3.3 million, respectively.
We operated under a special income tax concession in Singapore which began January 1, 2008. Our current five year special
income tax concession was effective on January 1, 2013. The special income tax concession is conditional upon our meeting
certain employment and investment thresholds which, if not met in accordance with our agreement, may eliminate the benefit
beginning with the first year in which the conditions are not satisfied. The income tax concession reduces the income tax rate
on qualified sales and the impact of this income tax concession decreased foreign income taxes by $7.5 million, $6.2 million
and $5.5 million for 2014, 2013 and 2012, respectively. The impact of the income tax concession on basic earnings per
common share was $0.11 for 2014, $0.09 for 2013 and $0.08 for 2012. On a diluted earnings per common share basis, the
impact was $0.10 for 2014, $0.09 for 2013 and $0.08 for 2012.
Income Tax Contingencies
We recorded a decrease of $2.1 million of liabilities related to unrecognized income tax benefits (“Unrecognized Tax Liabilities”)
and a decrease of $4.5 million of assets related to unrecognized income tax benefits (“Unrecognized Tax Assets”) during 2014.
In addition, during 2014, we recorded a decrease of $0.5 million to our Unrecognized Tax Liabilities related to a foreign currency
translation gain, which is included in other income (expense), net, in the accompanying consolidated statements of income and
comprehensive income. As of December 31, 2014, our Unrecognized Tax Liabilities, including penalties and interest, were
$33.0 million and our Unrecognized Tax Assets were $2.3 million.
We recorded an increase of $4.1 million of Unrecognized Tax Liabilities and an increase of $1.8 million of Unrecognized Tax
Assets during 2013. In addition, during 2013, we recorded a decrease of $0.1 million to our Unrecognized Tax Liabilities related
to a foreign currency translation gain, which is included in other income (expense), net, in the accompanying consolidated
statements of income and comprehensive income. As of December 31, 2013, our Unrecognized Tax Liabilities, including penalties
and interest, were $36.2 million and our Unrecognized Tax Assets were $6.9 million.
The following is a tabular reconciliation of the total amounts of unrecognized income tax benefits for the year:
2014 2013 2012
Unrecognized Tax Liabilities – opening balance $ 26,487 $ 22,394 $ 25,574
Gross increases – tax positions in prior period 65 2,559 —
Gross decreases – tax positions in prior period (2,833) (39) (7,659)
Gross increases – tax positions in current period 6,636 4,999 5,730
Gross decreases – tax positions in current period — — —
Settlements (3,597) — —
Lapse of statute of limitations (2,414) (3,426) (1,251)
Unrecognized Tax Liabilities – ending balance $ 24,344 $ 26,487 $ 22,394