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Note 7 - Income Taxes | 12 Months Ended
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Dec. 31, 2015
Notes to Financial Statements |
Income Tax Disclosure [Text Block] |
7. | Income Taxes
We recognize deferred tax assets and liabilities for future tax consequences attributable to differences between our financial statement carrying amounts of existing assets and liabilities and their respective tax bases. We measure deferred tax assets and liabilities using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to reverse. We recognize the effect on deferred tax assets and liabilities resulting from a change in tax rates in income in the period that includes the date of the change. Under certain circumstances, we recognize liabilities in our financial statements for positions taken on uncertain tax issues. When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others may be subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, we believe it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits on the balance sheet along with any associated interest and penalties that would be payable to the taxing authorities upon examination. Interest and penalties associated with unrecognized tax benefits are classified as income tax expense in the statement of operations. Federal and state and local income tax expense (benefit) is summarized as follows (in thousands):
|  | Year Ended December 31, |
|  | 2015 |  |  | 2014 |  |  | 2013 |
Current: |  |  |  |  |  |  |  |  |  |  |  |
Federal |  | $ | - |  |  | $ | - |  |  | $ | - |
State and local |  |  | 1,259 |  |  |  | 996 |  |  |  | 118 |
State and local - reserve for uncertain tax positions |  |  | (581 | ) |  |  | (198 | ) |  |  | (136 | )
Current income tax expense (benefit) |  |  | 678 |  |  |  | 798 |  |  |  | (18 | )
Deferred: |  |  |  |  |  |  |  |  |  |  |  |
Federal |  |  | 24,067 |  |  |  | 28,231 |  |  |  | 12,218 |
State and local |  |  | 1,703 |  |  |  | 2,707 |  |  |  | 947 |
Deferred income tax expense |  |  | 25,770 |  |  |  | 30,938 |  |  |  | 13,165 |
Total income tax expense |  | $ | 26,448 |  |  | $ | 31,736 |  |  | $ | 13,147 |
Significant components of our deferred tax liabilities and assets are as follows (in thousands):
|  | December 31, |
|  | 2015 |  |  | 2014 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
Net book value of property and equipment |  | $ | 20,986 |  |  | $ | 20,195 |
Broadcast licenses, goodwill and other intangibles |  |  | 350,647 |  |  |  | 341,654 |
Total deferred tax liabilities |  |  | 371,633 |  |  |  | 361,849 |
Deferred tax assets: |  |  |  |  |  |  |  |
Liability for accrued vacation |  |  | 2,172 |  |  |  | 1,900 |
Liability for accrued bonus |  |  | 4,786 |  |  |  | 3,440 |
Loan acquisition costs |  |  | 391 |  |  |  | 447 |
Allowance for doubtful accounts |  |  | 700 |  |  |  | 572 |
Liability under health and welfare plan |  |  | 1,108 |  |  |  | 1,111 |
Liability for pension plan |  |  | 14,172 |  |  |  | 16,900 |
Federal operating loss carryforwards |  |  | 38,466 |  |  |  | 55,425 |
State and local operating loss carryforwards |  |  | 5,867 |  |  |  | 7,102 |
Alternative minimum tax carryforwards |  |  | 386 |  |  |  | 386 |
Unearned income |  |  | 73 |  |  |  | 214 |
Stock options |  |  | 163 |  |  |  | 119 |
Acquisition costs |  |  | 1,129 |  |  |  | 776 |
Restricted stock |  |  | 1,875 |  |  |  | 1,479 |
Other |  |  | 172 |  |  |  | 206 |
Total deferred tax assets |  |  | 71,460 |  |  |  | 90,077 |
Valuation allowance for deferred tax assets |  |  | (1,683 | ) |  |  | (2,052 | )
Net deferred tax assets |  |  | 69,777 |  |  |  | 88,025 |
Deferred tax liabilities, net of deferred tax assets |  | $ | 301,856 |  |  | $ | 273,824 |
We have approximately $112.0 million in federal operating loss carryforwards, which expire during the years 2027 through 2031. Additionally, we have an aggregate of approximately $153.5 million of various state operating loss carryforwards. We project to have taxable income in the carryforward periods. Therefore, we believe that it is more likely than not that the federal net operating loss carryforwards will be fully utilized. A valuation allowance has been provided for a portion of the state net operating loss carryforwards. We believe that we will not meet the more likely than not threshold in certain states due to the uncertainty of generating sufficient income. Therefore, the state valuation allowance at December 31, 2015 and 2014 was $1.7 million and $2.1 million, respectively. Our total valuation allowance provided for deferred income tax assets decreased $0.4 million for the year ended December 31, 2015 due to changes in estimated utilization of state operating loss carryforwards. Our total valuation allowance provided for deferred income tax assets decreased $0.7 million for the year ended December 31, 2014 due to changes in estimated utilization of state operating loss carryforwards. A reconciliation of income tax expense at the statutory federal income tax rate and income taxes as reflected in the consolidated financial statements for the years ended December 31, 2015, 2014 and 2013 is as follows (in thousands):
|  | Year Ended December 31, |
|  | 2015 |  |  | 2014 |  |  | 2013 |
Statutory federal rate applied to income before income tax expense |  | $ | 23,012 |  |  | $ | 27,929 |  |  | $ | 11,002 |
Current year permanent items |  |  | 1,192 |  |  |  | 849 |  |  |  | 669 |
State and local taxes, net of federal tax benefit |  |  | 2,831 |  |  |  | 4,050 |  |  |  | 1,432 |
Change in valuation allowance |  |  | (369 | ) |  |  | (696 | ) |  |  | (409 | )
Reserve for uncertain tax positions |  |  | (581 | ) |  |  | (198 | ) |  |  | (136 | )
Other items, net |  |  | 363 |  |  |  | (198 | ) |  |  | 589 |
Income tax expense as recorded |  | $ | 26,448 |  |  | $ | 31,736 |  |  | $ | 13,147 |
Effective income tax rate |  |  | 40.2 | % |  |  | 39.8 | % |  |  | 41.8 | %
As of each year end, we are required to adjust our pension liability to an amount equal to the funded status of our pension plans with a corresponding adjustment to other comprehensive income on a net of tax basis. During 2015, we decreased our recorded non-current pension liability by $5.8 million and recognized other comprehensive income of $3.5 million, net of a $2.3 million tax expense. During 2014, we increased our recorded non-current pension liability by $17.1 million and recognized other comprehensive loss of $10.4 million, net of a $6.7 million tax benefit. During 2013, we decreased our recorded non-current pension liability by $16.0 million and recognized other comprehensive gain of $9.8 million, net of a $6.2 million tax expense. In 2015, 2014 and 2013, we made income tax payments (net of refunds) of $1.8 million, $0.4 million and $0.5 million, respectively. At December 31, 2015 and 2014, we had current income taxes payable of approximately $0.8 million and $1.9 million, respectively. We prescribe a recognition threshold and measurement attribution for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. For benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. As of December 31, 2015 and 2014, we had approximately $0.7 million and $1.3 million, respectively, of unrecognized tax benefits. All of these unrecognized tax benefits would impact our effective tax rate if recognized. The liability for unrecognized tax benefits is recorded net of any federal tax benefit that would result from payment. We have accrued estimates of interest and penalties related to unrecognized tax benefits in income tax expense. As of December 31, 2015 and 2014, we had recorded a liability for potential penalties and interest of approximately $0.3 million and $0.6 million, respectively, related to uncertain tax positions. The following table summarizes the activity related to our unrecognized tax benefits, net of federal benefit, excluding interest and penalties for the years ended December 31, 2015, 2014 and 2013 (in thousands):
|  | Year Ended December 31, |
|  | 2015 |  |  | 2014 |  |  | 2013 |
Balance at beginning of period |  | $ | 657 |  |  | $ | 782 |  |  | $ | 880 |
Reduction in benefit from lapse in statute of limitations |  |  | (303 | ) |  |  | (125 | ) |  |  | (98 | )
Balance at end of period |  | $ | 354 |  |  | $ | 657 |  |  | $ | 782 |
While it is difficult to calculate with any certainty, we estimate a decrease of $0.3 million, exclusive of interest and penalties, will be recorded for uncertain tax positions over the next twelve months resulting from expiring statutes of limitations for state tax issues. We file income tax returns in the U.S. federal and multiple state jurisdictions. With few exceptions, we are no longer subject to U.S. federal, or state and local tax examinations by tax authorities for years prior to 2001. This extended open adjustment period is due to material amounts of net operating loss carryforwards, which exist at the federal level and in multiple-state jurisdictions arising from the 2002 and 2003 tax years.

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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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