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Note 13 - Income Taxes

12 Months Ended

Dec. 31, 2013

13. INCOME TAXES:

Provision for Income Taxes

The tax provisions are summarized as follows (in thousands):

	Year Ended December 31,
	2013		2012		2011

Current provision-
Federal	$	7,755	$	8,647	$	3,081
State		2,008		1,917		3,203

		9,763		10,564		6,284

Deferred provision-
Federal		20,470		25,752		27,495
State		1,611		2,412		1,185

		22,081		28,164		28,680

Provision (benefit) for income taxes	$	31,844	$	38,728	$	34,964

A reconciliation of taxes based on the federal statutory rates and the provisions (benefits) for income taxes are summarized as follows (in thousands):

	Year Ended December 31,
	2013		2012			2011

Income taxes at the federal statutory rate	$	28,371	$	35,414		$	31,562
State income taxes, net of federal benefit		2,259		2,753			2,795
Tax effect of permanent differences		802		766			621
Other, net		412		(205	)		(14	)

Provision for income taxes	$	31,844	$	38,728		$	34,964

The components of income taxes for other than continuing operations consisted of the following (in thousands):

	Year Ended December 31,
	2013			2012			2011
Income tax expense (benefit) related to components of other comprehensive income:
Change in fair value of cash flow swaps	$	338		$	133		$	(728	)
Change in fair value of available-for-sale securities	–				(9	)		(360	)
Total	$	338		$	124		$	(1,088	)

Paid in capital – stock based compensation	$	(2,566	)	$	(1,668	)	$	(1,993	)

The following summarizes the components of deferred tax assets and liabilities included in the balance sheet (in thousands):

	December 31,
	2013			2012
Current:
Deferred tax assets:
Inventory	$	4,673		$	4,424
Accounts receivable		304			164
Capital lease obligations		3,821			4,604
Stock options		1,474			1,409
Accrued liabilities		4,531			2,337
State net operating loss carry forward		1,071			905
State tax credit		403			477
Other		−			310
Current deferred tax asset	$	16,277		$	14,630

Non-Current:
Deferred tax assets:
Capital lease obligations	$	13,002		$	13,811
Stock options		5,894			5,635
Other		1,821			1,679
		20,717			21,125
Deferred tax liabilities:
Difference between book and tax basis-
Depreciation and amortization		(168,539	)		(144,881	)

Net non-current tax liability	$	(147,822	)	$	(123,756	)

The Company’s various state net operating loss carry forwards expire from 2014 through 2034.

The Company included accruals for unrecognized income tax benefits totaling $1.5 million as a component of accrued liabilities as of December 31, 2013, and $1.4 million as of December 31, 2012. The unrecognized tax benefits, if recognized, would impact the Company’s effective tax rate. An unfavorable settlement would require a charge to income tax expense and a favorable resolution would be recognized as a reduction to income tax expense. The Company records interest and penalties related to unrecognized income tax benefits in income tax expense. The Company had accrued interest of $81,000 at December 31, 2013 and $49,000 at December 31, 2012 related to unrecognized tax benefits. The Company recognized approximately ($31,598) in interest in 2013, compared to ($2,294) in 2012, and ($78,748) in 2011. No amounts were accrued for penalties.

The Company does not anticipate a significant change in the amount of unrecognized tax benefits in the next 12 months. As of December 31, 2013, the tax years ended December 31, 2010 through 2013 remained subject to audit by federal tax authorities and the tax years ended December 31, 2009 through 2013, remained subject to audit by state tax authorities.

A reconciliation of the change in the unrecognized tax benefits is as follows (in thousands):

	2013			2012			2011
Unrecognized tax benefits at beginning of period	$	1,409		$	1,337		$	1,466
Gross increases – tax positions in current year		466			358			290
Gross increases – tax positions in a prior year		−			267			119
Reductions due to lapse of statute of limitations		(330	)		(553	)		(538	)
Unrecognized tax benefits at end of period	$	1,545		$	1,409		$	1,337

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

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