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Income Taxes | 12 Months Ended
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Dec. 31, 2016
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes Income tax provision (benefit) applicable to continuing operations consists of the following:
| Year ended December 31,
(in thousands) | 2016 |  | 2015 |  | 2014
Current: |  |  |  |  |
Federal | $ | (702 | ) |  | $ | (3,237 | ) |  | $ | 32,600 |
State and local | 199 |  |  | (762 | ) |  | 5,677 |
Foreign | 1,385 |  |  | 1,224 |  |  | 1,409 |
| $ | 882 |  |  | $ | (2,775 | ) |  | $ | 39,686 |
Deferred: |  |  |  |  |
Federal | $ | 3,523 |  |  | $ | 1,756 |  |  | $ | 19,741 |
State and local | 1,696 |  |  | 519 |  |  | 1,830 |
Foreign | 810 |  |  | 258 |  |  | 244 |
| $ | 6,029 |  |  | $ | 2,533 |  |  | $ | 21,815 |
Total: |  |  |  |  |
Federal | $ | 2,821 |  |  | $ | (1,481 | ) |  | $ | 52,341 |
State and local | 1,895 |  |  | (243 | ) |  | 7,507 |
Foreign | 2,195 |  |  | 1,482 |  |  | 1,653 |
| $ | 6,911 |  |  | $ | (242 | ) |  | $ | 61,501 |
Income (loss) before income taxes from continuing operations consists of the following:
| Year ended December 31,
(in thousands) | 2016 |  | 2015 |  | 2014
U.S. | $ | 11,526 |  |  | $ | (18,867 | ) |  | $ | 174,262 |
Foreign | 9,855 |  |  | 7,303 |  |  | 9,884 |
| $ | 21,381 |  |  | $ | (11,564 | ) |  | $ | 184,146 |
A reconciliation from the statutory U.S. federal tax rate to the effective tax rate follows:
| Year ended December 31,
| 2016 |  | 2015 |  | 2014
Statutory U.S. federal tax rate | 35.0 | % |  | 35.0 | % |  | 35.0 | %
Increase (decrease) in rate resulting from: |  |  |  |  |
Effect of noncontrolling interest | (4.7 | ) |  | 5.3 |  |  | (2.5 | )
State and local income taxes, net of related federal taxes | 5.8 |  |  | 1.4 |  |  | 2.7 |
Income taxes on foreign earnings | (1.3 | ) |  | 9.4 |  |  | (0.4 | )
Change in pre-acquisition tax liability and other costs | — |  |  | 3.5 |  |  | — |
Tax associated with accrued and unpaid dividends | 3.2 |  |  | (13.6 | ) |  | — |
Goodwill impairment | — |  |  | (35.6 | ) |  | — |
Nondeductible compensation | 2.0 |  |  | (5.0 | ) |  | 0.2 |
Federal income tax credits | (7.3 | ) |  | — |  |  | — |
Other, net | (0.4 | ) |  | 1.7 |  |  | (1.6 | )
Effective tax rate | 32.3 | % |  | 2.1 | % |  | 33.4 | %
Net income tax refunds of $(10.6) million were received in 2016 and net income taxes of $4.9 million and $36.8 million were paid in 2015 and 2014, respectively. Significant components of the Company's deferred tax liabilities and assets are as follows:
| December 31,
(in thousands) | 2016 |  | 2015
Deferred tax liabilities: |  |  |
Property, plant and equipment and Rail Group assets leased to others | $ | (179,250 | ) |  | $ | (170,588 | )
Equity method investments | (45,244 | ) |  | (45,673 | )
Other | (22,286 | ) |  | (22,261 | )
| (246,780 | ) |  | (238,522 | )
Deferred tax assets: |  |  |
Employee benefits | 25,403 |  |  | 27,160 |
Accounts and notes receivable | 2,964 |  |  | 2,611 |
Inventory | 9,979 |  |  | 11,918 |
Federal income tax credits | 7,150 |  |  | — |
Net operating loss carryforwards | 3,322 |  |  | 4,542 |
Other | 16,224 |  |  | 13,583 |
Total deferred tax assets | 65,042 |  |  | 59,814 |
Valuation allowance | (310 | ) |  | (593 | )
| 64,732 |  |  | 59,221 |
Net deferred tax liabilities | $ | (182,048 | ) |  | $ | (179,301 | )
On December 31, 2016, the Company had $4.0 million, $66.9 million and $0.1 million of U.S. Federal, state and non-U.S. net operating loss carryforwards that begin to expire in 2034, 2017 and 2035, respectively. The Company also has $6.0 million of general business credits that expire after 2036 and $1.1 million of foreign tax credits that begin to expire after 2025. During 2016, the Company entered into agreements with several unrelated third-parties to fund qualified railroad track maintenance expenditures. In return, railroad track miles were assigned to the Company which enabled the Company to claim railroad track maintenance credits pursuant to section 45G of the Internal Revenue Code of 1986. $2.6 million of tax benefit was realized as a result of the agreements for the year ended December 31, 2016, resulting in a $0.8 million current tax provision benefit. $6.0 million of credits have been deferred to future periods which, upon realization, will result in a $1.8 million current tax provision benefit. The railroad track maintenance credits are general business credits included in federal income tax credits above. The Company or one of its subsidiaries files income tax returns in the U.S., various foreign jurisdictions and various state and local jurisdictions. The Company is no longer subject to examinations by foreign jurisdictions for years before 2011 and is no longer subject to examinations by U.S. tax authorities for years before 2013. During 2016, the Internal Revenue Service completed an examination of the Company’s U.S. income tax returns for years 2011 and 2012. The Company is no longer subject to examination by state tax authorities in most states for tax years before 2013. A reconciliation of the January 1, 2014 to December 31, 2016 amount of unrecognized tax benefits is as follows:
(in thousands) |
Balance at January 1, 2014 | $ | 1,110 |
Additions based on tax positions related to the current year | 125 |
Additions based on tax positions related to prior years | 384 |
Reductions as a result of a lapse in statute of limitations | (132 | )
Balance at December 31, 2014 | 1,487 |
Additions based on tax positions related to the current year | 55 |
Additions based on tax positions related to prior years | 691 |
Reductions based on tax positions related to prior years | (518 | )
Reductions as a result of a lapse in statute of limitations | (284 | )
Balance at December 31, 2015 | 1,431 |
Additions based on tax positions related to the current year | 113 |
Additions based on tax positions related to prior years | — |
Reductions based on tax positions related to prior years | (40 | )
Reductions as a result of a lapse in statute of limitations | (52 | )
Balance at December 31, 2016 | $ | 1,452 |
The Company anticipates a $1.1 million decrease in the reserve during the next 12 months due to the settling of state tax appeals and a lapse in statute of limitations. Dependent upon the lapse in statute and the outcome of the state tax appeals, the total liability for unrecognized tax benefits as of December 31, 2016 could impact the effective tax rate. The Company has elected to classify interest and penalties as interest expense and penalty expense, respectively, rather than as income tax expense. The Company has $0.4 million accrued for the payment of interest and penalties at December 31, 2016. The net interest and penalties expense for 2016 is $0.2 million, due to increased uncertain tax positions. The Company had $0.6 million accrued for the payment of interest and penalties at December 31, 2015. The net interest and penalties expense for 2015 was $0.1 million.

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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=6907707&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=6907707&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=6907707&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=6907707&loc=d3e32537-109319 + Details
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