XML 62 R19.htm IDEA: XBRL DOCUMENT v2.4.0.6
Income Taxes
 12 Months Ended
Dec. 31, 2012
Income Taxes [Abstract]  
Income Taxes
11. Income Taxes

The provision for income taxes from continuing operations are as follows (in thousands):

 

                         
    Year ended December 31,  
    2012     2011     2010  

Current:

                        

Federal

   $ 5,378     $ 857     $ 1,211  

State

     685       (474 )      606  
   

 

 

    

 

 

    

 

 

  
      6,063       383       1,817  
   

 

 

    

 

 

    

 

 

  

Deferred:

                        

Federal

     341       283       601  

State

     (76 )      171       156  
   

 

 

    

 

 

    

 

 

  
      265       454       757  
   

 

 

    

 

 

    

 

 

  

Total provision

   $ 6,328     $ 837     $ 2,574  
   

 

 

    

 

 

    

 

 

  

 

Deferred income tax assets and liabilities are comprised of the following components (in thousands):

 

                 
    December 31,  
    2012     2011  

Gross deferred income tax assets:

                

Workers' compensation claims liabilities

   $ 4,833     $ 4,266  

Safety incentives payable

     3,422       2,064  

Allowance for doubtful accounts

     148       175  

Deferred compensation

     44       180  

Tax effect of unrealized losses, net

     936       883  

Alternative minimum tax credit carryforward

     0       740  

State credit carryforward

     805       490  

State loss carryforward

     0       15  

Other

     284       305  
   

 

 

    

 

 

  
      10,472       9,118  

Less valuation allowance

     1,773       1,333  
   

 

 

    

 

 

  
      8,699       7,785  
   

 

 

    

 

 

  

Gross deferred income tax liabilities:

                

Tax depreciation in excess of book depreciation

     (2,017 )      (1,851 ) 

Tax amortization of goodwill

     (9,141 )      (8,128 ) 
   

 

 

    

 

 

  
      (11,158 )      (9,979 ) 
   

 

 

    

 

 

  

Net deferred income tax liabilities

   $ (2,459 )    $ (2,194 ) 
   

 

 

    

 

 

  

The effective tax rate for continuing operations differed from the U.S. statutory federal tax rate due to the following:

 

                         
    Year ended December 31,  
    2012     2011     2010  

Statutory federal tax rate

     35.0 %      34.0 %      34.0 % 

State taxes, net of federal benefit

     .4       (4.2 )      5.3  

Valuation allowance on capital loss carryforward and state tax credit carryforward

     2.3       3.1       (4.4 ) 

Adjustment for final positions on filed returns

     (.3 )      (.3 )      1.5  

Officer life insurance proceeds

     0       (22.4 )      0  

Nondeductible expenses and other, net

     4.4       3.9       5.8  

Federal tax-exempt interest income

     (.4 )      (.9 )      (.7 ) 

Federal and state tax credits

     (8.9 )      (7.7 )      (15.6 ) 
   

 

 

    

 

 

    

 

 

  
      32.5 %      5.5 %      25.9 % 
   

 

 

    

 

 

    

 

 

  

The Company has established a valuation allowance for certain deferred tax assets due to uncertainties regarding the Company’s ability to generate future taxable investment gains in order to utilize certain investment impairment losses and investment loss carryforwards for tax purposes. The realization of a significant portion of net deferred tax assets is based in part on our estimates of the timing of reversals of certain temporary differences and on the generation of taxable income before such reversals. At December 31, 2012, we maintained a valuation allowance for approximately $1.8 million of federal and state tax benefits that are not expected to be utilized.

The Company is subject to income taxes in U.S. federal and multiple state and local tax jurisdictions. In the major jurisdictions where the Company operates, it is generally no longer subject to income tax examinations by tax authorities for years before 2007. As of December 31, 2012 and 2011, we had no unrecognized tax benefits. We are currently under exam by the Internal Revenue Service and the State of California.

The Company is subject to income taxes in multiple state and local tax jurisdictions. A portion of the consolidated income the Company generates is not subject to state income tax. Depending on the percentage of this income to total consolidated income, the Company’s state effective rate can fluctuate from expectations. As a result of the mix of income subject to state income tax, total state tax expense decreased by approximately $498,000 and $502,000 in 2012 and 2011, respectively. In 2010, state tax expense increased by approximately $50,000.

At December 31, 2012, the Company had capital loss carryforwards of approximately $2.5 million. Unless utilized in earlier tax years, the carryforwards expire in 2015. At December 31, 2012, the Company also had state tax credit carryforwards of $1.2 million, which have no expiration date.