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INCOME TAXES | 9 Months Ended
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Sep. 30, 2017
Income Tax Disclosure [Abstract] |
INCOME TAXES | INCOME TAXES For the three months ended September 30, 2017 and 2016, income tax benefit, on a consolidated operations basis, was $4.7 million and $1.2 million, respectively, and the effective tax rate was (38.8) percent and (3.5) percent, respectively. For the nine months ended September 30, 2017 and 2016, income tax (benefit) expense, on a consolidated operations basis, was $(20.5) million and $30.3 million, respectively, and the effective tax rate was (79.5) percent and 27.0 percent, respectively. The Company recognized income tax benefits due mainly to the recognition of year-to-date tax credits from the investments in alternative energy partnerships of $8.8 million and $33.3 million, respectively, for the three and nine months ended September 30, 2017, and $19.4 million for the three and nine months ended September 30, 2016. The Company uses the flow-through income statement method to account for the investment tax credits earned on the solar investments. Under this method, the investment tax credits are recognized as a reduction to income tax expense and the initial book-tax difference in the basis of the investments are recognized as additional tax expense in the year they are earned. The Company accounts for income taxes by recognizing deferred tax assets and liabilities based upon temporary differences between the amounts for financial reporting purposes and tax basis of its assets and liabilities. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion, or all, of the deferred tax asset will not be realized. In assessing the realization of deferred tax assets, management will continue to evaluate both positive and negative evidence on a quarterly basis, including the existence of any cumulative losses in the current year and the prior two years, the amount of taxes paid in available carry-back years, future taxable income and tax planning strategies. Based on this analysis, management determined that it was more likely than not that all of the deferred tax assets would be realized; therefore, no valuation allowance was provided against the net deferred tax assets of $23.3 million and $10.0 million at September 30, 2017 and December 31, 2016, respectively. The increase was mainly due to a transfer of $14.0 million of tax credits generated in 2017 from the investments in alternative energy partnerships from income tax receivable to deferred tax assets as the Company is unlikely to utilize all of the credits generated in the current year and a decrease of $19.2 million in deferred tax liabilities from the sale of discontinued operations, partially offset by an increase of $12.0 million in deferred tax liabilities from the increase of unrealized gain on securities available-for-sale and a decrease of $6.0 million in deferred tax assets from reversal of bonus accrual. ASC 740-10-25 relates to the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements. ASC 740-10-25 prescribes a threshold and a measurement process for recognizing in the financial statements a tax position taken or expected to be taken in a tax return and also provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. The Company had unrecognized tax benefits of $716 thousand and $0 at September 30, 2017 and December 31, 2016. The Company does not expect the total amount of unrecognized tax benefits to significantly change in the next twelve months. As of September 30, 2017, the total unrecognized tax benefit that, if recognized, would impact the effective tax rate is $716 thousand. At September 30, 2017 and December 31, 2016, the Company had no accrued interest or penalties. In the event the Company is assessed interest and/or penalties by federal or state tax authorities, such amounts will be classified in the consolidated financial statements as income tax expense. The Company and its subsidiaries are subject to U.S. Federal income tax as well as income tax in multiple state jurisdictions. The Company is no longer subject to the assessment of U.S. federal income tax for years before 2014. The statute of limitations for the assessment of California Franchise taxes has expired for tax years before 2013 (other state income and franchise tax statutes of limitations vary by state). The Company adopted ASU 2016-09 during the three months ended March 31, 2017. As a result of the adoption, the Company recorded $1.9 million of income tax benefits for the nine months ended September 30, 2017 related to excess tax benefits from stock compensation. Prior to 2017, such excess tax benefits were generally recorded directly in stockholders’ equity. This new accounting standard may potentially increase the volatility in the Company’s effective tax rates.

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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 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
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