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Note 13 - Income Taxes

12 Months Ended

Dec. 31, 2014

13. INCOME TAXES:

Provision for Income Taxes

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

	Year Ended December 31,
	2014		2013		2012

Current provision-
Federal	$	21,826	$	7,755	$	8,647
State		3,531		2,008		1,917

		25,357		9,763		10,564

Deferred provision-
Federal		23,243		20,470		25,752
State		1,986		1,611		2,412

		25,229		22,081		28,164

Provision (benefit) for income taxes	$	50,586	$	31,844	$	38,728

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,
	2014		2013		2012

Income taxes at the federal statutory rate	$	45,691	$	28,371	$	35,414
State income taxes, net of federal benefit		3,398		2,259		2,753
Tax effect of permanent differences		1,069		802		766
Other, net		428		412		(205	)

Provision for income taxes	$	50,586	$	31,844	$	38,728

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

	Year Ended December 31,
	2014			2013			2012
Income tax expense (benefit) related to components of other comprehensive income:
Change in fair value of cash flow swaps	$	308		$	338		$	133
Change in fair value of available-for-sale securities		166		–				(9	)
Total	$	474		$	338		$	124

Paid in capital – stock based compensation	$	(5,207	)	$	(2,566	)	$	(1,668	)

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

	December 31,
	2014			2013
Current:
Deferred tax assets:
Inventory	$	6,786		$	4,673
Accounts receivable		304			304
Capital lease obligations		4,217			3,821
Stock options		1,764			1,474
Accrued liabilities		3,935			4,531
State net operating loss carry forward		1,436			1,071
State tax credit		354			403
		18,796			16,277
Valuation allowance		(409	)	–
Current deferred tax asset	$	18,387		$	16,277

Non-Current:
Deferred tax assets:
Capital lease obligations	$	16,965		$	13,002
Stock options		7,056			5,894
Other		1,839			1,821
		25,860			20,717
Deferred tax liabilities:
Difference between book and tax basis-
Depreciation and amortization		(201,495	)		(168,539	)

Net non-current tax liability	$	(175,635	)	$	(147,822	)

At December 31, 2014, the Company had approximately $35.28 million in state net operating loss carry forwards that expire from 2014 through 2034. The Company has a valuation allowance of $409,000 associated with U.S. state net operating losses. The valuation allowance increased by $409,000 due to uncertainty regarding the ability to utilize the losses.

The Company had unrecognized income tax benefits totaling $1.5 million as a component of accrued liabilities at December 31, 2014, and $1.0 million at December 31, 2013, the total of which, 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 recognizes interest accrued related to unrecognized tax benefits in income tax expense. During the years ended December 31, 2014, 2013 and 2012, the Company recognized approximately $17,500, $32,000, and $2,300 in interest. No amounts were accrued for penalties. The Company had approximately $98,500, $81,000 and $49,000 for the payment of interest accrued at December 31, 2014, 2013 and 2012, respectively.

The Company does not anticipate a significant change in the amount of unrecognized tax benefits in the next 12 months. As of December 31, 2014, the tax years ended December 31, 2011 through 2014 remained subject to audit by federal tax authorities and the tax years ended December 31, 2010 through 2014, remained subject to audit by state tax authorities.

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

	2014			2013			2012
Unrecognized tax benefits at beginning of period	$	1,545		$	1,409		$	1,337
Gross increases – tax positions in current year		815			466			358
Gross increases – tax positions in a prior year		−			−			267
Reductions due to lapse of statute of limitations		(273	)		(330	)		(553	)
Unrecognized tax benefits at end of period	$	2,087		$	1,545		$	1,409

- 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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