NOTE 11 — INCOME TAXES

The Company’s income tax expense amounts for the six months ended July 31, 2017 and 2016 differed from corresponding amounts computed by applying the federal corporate income tax rate of 35% to the amounts of income before income taxes for the periods as shown in the table below.

	Six Months Ended July 31,
	2017			2016
Computed expected income tax expense	$	25,810		$	19,721
Increase (decrease) resulting from:
State income taxes, net of federal tax benefit	3,020			2,075
Domestic production activities deduction	(2,148		)	(1,584		)
Stock option exercises	(773		)	(986		)
Exclusion of non-controlling interests	(106		)	(1,930		)
Adjustments and other differences	(127		)	1,632

	$	25,676		$	18,928

As of July 31, 2017 and January 31, 2017, the condensed consolidated balance sheets included accrued income taxes and prepaid income taxes in the amounts of $2.2 million and $3.9 million, respectively. As of July 31, 2017, the Company does not believe that it has any material uncertain income tax positions reflected in its accounts.

The income tax effects of temporary differences that gave rise to deferred tax assets and liabilities as of July 31, 2017 and January 31, 2017 included the following:

	July 31,			January 31,
	2017			2017
Assets:
Net operating loss (“NOL”) carryforwards	$	3,604		$	3,487
Stock options	2,271			1,594
Purchased intangibles	1,439			1,592
Accrued expenses and other	2,074			2,052

	9,388			8,725

Liabilities:
Purchased intangibles	(4,567		)	(4,428		)
Construction contracts	(3,228		)	(2,862		)
Property and equipment and other	(2,365		)	(2,389		)

	(10,160		)	(9,679		)

Net deferred tax liabilities	$	(772	)	$	(954	)

The Company’s ability to realize deferred tax assets, including those related to NOLs, 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 valuation allowances against some or all of its deferred tax assets resulting in additional income tax expense in the condensed 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.

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, 2013 except for a few notable exceptions relevant to the Company including the Republic of Ireland, California and Texas where the open periods are one year longer.