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INCOME TAXES | 12 Months Ended
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Jan. 31, 2016
INCOME TAXES |
INCOME TAXES | NOTE 14 — INCOME TAXES The components of income tax expense for the years ended January 31, 2017, 2016 and 2015 are presented below:
|  | 2017 |  | 2016 |  | 2015 |
Current: |  |  |  |  |  |  |
Federal |  | $ | 29,681 |  | $ | 16,458 |  | $ | 15,249 |
State |  | 6,188 |  | 5,423 |  | 4,767 |
|  | 35,869 |  | 21,881 |  | 20,016 |
Deferred: |  |  |  |  |  |  |
Federal |  | 1,277 |  | 2,950 |  | 788 |
State |  | (40 | ) | 471 |  | 108 |
|  | 1,237 |  | 3,421 |  | 896 |
Income tax expense |  | $ | 37,106 |  | $ | 25,302 |  | $ | 20,912 |
The Company’s income tax expense amounts for the years ended January 31, 2017, 2016 and 2015 differed from the expected income tax expense amounts computed by applying the federal corporate income tax rate of 35% to income before income taxes for the periods as shown in the table below.
|  | 2017 |  | 2016 |  | 2015 |
Computed “expected” income tax |  | $ | 40,086 |  | $ | 26,427 |  | $ | 22,528 |
Increase (decrease) resulting from: |  |  |  |  |  |  |
State income taxes, net of federal benefit |  | 4,001 |  | 4,030 |  | 3,284 |
Stock option exercises |  | (4,969 | ) | — |  | — |
Domestic production activities deduction |  | (2,906 | ) | (1,635 | ) | (1,504 | )
Exclusion of noncontrolling interests |  | (2,484 | ) | (4,823 | ) | (4,582 | )
Other permanent differences |  | 1,933 |  | 1,557 |  | 902 |
Adjustments and other differences |  | 1,445 |  | (254 | ) | 284 |
Income tax expense |  | $ | 37,106 |  | $ | 25,302 |  | $ | 20,912 |
For the years ended January 31, 2017, 2016 and 2015, the favorable income tax effects of permanent differences related primarily to the exclusion from taxable income of the income attributable to noncontrolling interest entities (which are considered partnerships for income tax reporting purposes), and the domestic manufacturing deduction, offset partially by the unfavorable income tax effects of state income taxes, net of federal income tax benefit. Also, during the year ended January 31, 2017, there was a favorable income tax effect related to the recognition of the excess income tax benefits associated with stock options exercised during the year (see Note 2). Other permanent differences included nondeductible executive compensation and, for the current year, the unfavorable income tax effect of the goodwill impairment loss. The most significant item reflected in adjustments and other differences for the current year was the foreign income tax differential. The tax effects of temporary differences that gave rise to deferred tax assets and liabilities as of January 31, 2017 and 2016 included the following:
|  | 2017 |  | 2016 |
Assets: |  |  |  |  |
Net operating loss (“NOL”) carryforwards |  | $ | 3,487 |  | $ | 3,345 |
Stock options |  | 1,594 |  | 2,354 |
Purchased intangibles |  | 1,592 |  | 2,233 |
Accrued expenses and other |  | 2,052 |  | 2,144 |
|  | 8,725 |  | 10,076 |
Liabilities: |  |  |  |  |
Purchased intangibles |  | $ | (4,428 | ) | $ | (4,375 | )
Construction contracts |  | (2,862 | ) | (3,681 | )
Property and equipment and other |  | (2,389 | ) | (2,244 | )
|  | (9,679 | ) | (10,300 | )
Net deferred tax liabilities |  | $ | (954 | ) | $ | (224 | )
The Company acquired unused net operating losses (“NOLs”) for federal income tax reporting purposes from TRC that are subject to limitations imposed by Section 382 of the Internal Revenue Code of 1986, as amended (the “IRC”). These losses are subject to annual limits that reduce the aggregate amount of NOLs available to the Company in the future to approximately $7.9 million (the “IRC 382 Limit”). These NOLs are available to offset future taxable income and, if not utilized, begin expiring during 2032. The Company also has certain NOLs that will be available to the Company for state and foreign income tax reporting purposes that are substantially similar to the federal NOLs. As APC has incurred operating losses since its acquisition, it does not have any undistributed foreign earnings as of January 31, 2017. The Company’s ability to realize deferred tax assets, including those related to the NOLs discussed above, depends primarily upon the generation of sufficient future taxable income to allow for the utilization of the Company’s deductible temporary differences and tax planning strategies. If such estimates and assumptions change in the future, the Company may be required to record additional valuation allowances against some or all of its deferred tax assets resulting in additional income tax expense in the consolidated statement of earnings. At this time, based substantially on the strong earnings performance of the Company’s power industry services reporting segment, management believes that it is more likely than not that the Company will realize the benefits of its deferred tax assets. As of January 31, 2017 and 2016, the consolidated balance sheets included prepaid income taxes in the amounts of $3.9 million and $3.3 million, respectively. As of January 31, 2017, the Company does not believe that it has any material uncertain income tax positions reflected in its accounts. The Company is subject to income taxes in the United States of America, the Republic of Ireland and in various other state and foreign jurisdictions. Tax regulations within each jurisdiction are subject to the interpretation of the related tax laws and regulations and require significant judgment to apply. The Company is no longer subject to income tax examinations by tax authorities for its fiscal years ended on or before January 31, 2012 except for a few notable exceptions including the Republic of Ireland and California where the open periods are one year longer. The amounts of interest and penalties related to income taxes that were incurred by the Company during the years ended January 31, 2017, 2016 and 2015 were not material.

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- 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. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32559-109319 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32718-109319 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32639-109319 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32537-109319 + Details
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