XML 34 R16.htm IDEA: XBRL DOCUMENT
v3.19.1

Note 8 - Income Taxes | 12 Months Ended
--- | ---
Dec. 31, 2018
Notes to Financial Statements |
Income Tax Disclosure [Text Block] |
8. | INCOME TAXES
Income tax expense (benefit) for the years ended December 31, 2018 , 2017 , and 2016 is comprised of:
(in thousands) |  | 2018 |  |  | 2017 |  |  | 2016 |
Federal, current |  | $ | - |  |  | $ | (7,780 | ) |  | $ | 11,951 |
Federal, deferred |  |  | 14,117 |  |  |  | (28,055 | ) |  |  | (2,925 | )
State, current |  |  | 1,410 |  |  |  | (1,737 | ) |  |  | 1,811 |
State, deferred |  |  | (20 | ) |  |  | 5,430 |  |  |  | (451 | )
Actual income tax expense |  | $ | 15,507 |  |  | $ | (32,142 | ) |  | $ | 10,386 |
Income tax expense for the years ended December 31, 2018 , 2017 , and 2016 is summarized below:
(in thousands) |  | 2018 |  |  | 2017 |  |  | 2016 |
Computed "expected" income tax expense |  | $ | 12,182 |  |  | $ | 8,154 |  |  | $ | 9,527 |
State income taxes, net of federal income tax effect |  |  | 2,610 |  |  |  | 862 |  |  |  | 953 |
Per diem allowances |  |  | 1,446 |  |  |  | 2,145 |  |  |  | 2,205 |
Tax contingency accruals |  |  | (57 | ) |  |  | (43 | ) |  |  | (273 | )
Valuation allowance, net |  |  | - |  |  |  | (1,167 | ) |  |  | - |
Tax credits |  |  | (1,042 | ) |  |  | (1,084 | ) |  |  | (694 | )
Impact of Tax Act remeasurement |  |  | - |  |  |  | (40,123 | ) |  |  | - |
Excess tax benefits on share-based compensation |  |  | 50 |  |  |  | (457 | ) |  |  | - |
Other, net |  |  | 318 |  |  |  | (429 | ) |  |  | (1,332 | )
Income tax expense (benefit) |  | $ | 15,507 |  |  | $ | (32,142 | ) |  | $ | 10,386 |
Income tax expense varies from the amount computed by applying the applicable federal corporate income tax rate for 2016 through 2017 of 35% , and 21% for 2018 , to income before income taxes primarily due to state income taxes, net of federal income tax effect, adjusted for permanent differences, the most significant of which is the effect of the per diem pay structure for drivers and the impacts of tax reform discussed below. Drivers who meet the requirements to receive per diem receive non-taxable per diem pay in lieu of a portion of their taxable wages. This per diem program increases our drivers' net pay per mile, after taxes, while decreasing gross pay, before taxes. As a result, salaries, wages, and employee benefits are slightly lower and our effective income tax rate is higher than the statutory rate. Generally, as pre-tax income increases, the impact of the driver per diem program on our effective tax rate decreases, because aggregate per diem pay becomes smaller in relation to pre-tax income, while in periods where earnings are at or near breakeven, the impact of the per diem program on our effective tax rate is significant. Due to the partially nondeductible effect of per diem pay, our tax rate will fluctuate in future periods based on fluctuations in earnings. On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Act. The Tax Act makes broad and complex changes to the U.S. tax code, including, but not limited to, the following that impact us: ( 1 ) reducing the U.S. federal corporate income tax rate from 35 percent to 21 percent; ( 2 ) eliminating the corporate alternative minimum tax; ( 3 ) creating a new limitation on deductible interest expense; ( 4 ) 100% expensing of qualified fixed assets; ( 5 ) repeal of the like-kind exchange program property other than real property; ( 6 ) removal of the performance-based exception on executive compensation over $1 million; and ( 7 ) limiting certain other deductions. The SEC staff issued Staff Accounting Bulletin No. 118 ("SAB 118" ), which provides guidance on accounting for the tax effects of the Tax Act. SAB 118 provides for a measurement period that should not extend beyond one year from the Tax Act enactment date for companies to complete the accounting relating to the Tax Act under ASC 740. In accordance with SAB 118, a company must reflect the income tax effects of those aspects of the Tax Act for which the accounting under ASC 740 is complete. To the extent that a company's accounting for certain income tax effects of the Tax Act is incomplete but it is able to determine a reasonable estimate, it must record a provisional estimate in its financial statements. If a company cannot determine a provisional estimate to be included in its financial statements, it should continue to apply ASC 740 on the basis of the provisions of the tax laws that were in effect immediately before the enactment of the Tax Act. As the result of our initial analysis of the impact of the Tax Act, we recorded a provisional amount of net tax benefit of $40.1 million in 2017 related to the remeasurement of our deferred tax balances and other effects. We completed our accounting for the income tax effects of the Tax Act in 2018, and no material adjustments were required to the provisional amounts initially recorded. The temporary differences and the approximate tax effects that give rise to our net deferred tax liability at December 31, 2018 and 2017 are as follows:
(in thousands) |  | 2018 |  |  | 2017 |
Deferred tax assets: |  |  |  |  |  |  |  |
Insurance and claims |  | $ | 9,593 |  |  | $ | 8,797 |
Net operating loss carryovers |  |  | 10,260 |  |  |  | 4,755 |
Tax credits |  |  | 11,985 |  |  |  | 11,875 |
Other |  |  | 8,350 |  |  |  | 4,414 |
Valuation allowance |  |  | (63 | ) |  |  | (63 | )
Total deferred tax assets |  |  | 40,125 |  |  |  | 29,778 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
Property and equipment |  |  | (87,939 | ) |  |  | (76,325 | )
Investment in partnership |  |  | (26,066 | ) |  |  | (14,197 | )
Deferred fuel hedge |  |  | (73 | ) |  |  | (99 | )
Other |  |  | (569 | ) |  |  | - |
Prepaid expenses |  |  | (2,945 | ) |  |  | (2,501 | )
Total deferred tax liabilities |  |  | (117,592 | ) |  |  | (93,122 | )
Net deferred tax liability |  | $ | (77,467 | ) |  | $ | (63,344 | )
The net deferred tax liability of $77.5 million primarily relates to differences in cumulative book versus tax depreciation of property and equipment, partially off-set by tax credit carryovers and insurance claims that have been reserved but not paid. The carrying value of our deferred tax assets assumes that we will be able to generate, based on certain estimates and assumptions, sufficient future taxable income in certain tax jurisdictions to utilize these deferred tax benefits. If these estimates and related assumptions change in the future, we may be required to establish a valuation allowance against the carrying value of the deferred tax assets, which would result in additional income tax expense. On a periodic basis, we assess the need for adjustment of the valuation allowance. Based on forecasted taxable income resulting from the reversal of deferred tax liabilities, primarily generated by accelerated depreciation for tax purposes in prior periods, and tax planning strategies available to us, no valuation allowance has been established at December 31, 2018 or 2017 , except for approximately $0.1 million in each year related to certain state net operating loss carry forwards. If these estimates and related assumptions change in the future, we may be required to modify our valuation allowance against the carrying value of the deferred tax assets. As of December 31, 2018 , we had a $2.7 million liability recorded for unrecognized tax benefits, which includes interest and penalties of $0.9 million . We recognize interest and penalties accrued related to unrecognized tax benefits in tax expense. As of December 31, 2017 , we had a $2.8 million liability recorded for unrecognized tax benefits, which included interest and penalties of $0.8 million . Interest and penalties recognized for uncertain tax positions provided for a $0.1 million expense in each of 2018 and 2016 and a $0.1 million benefit in 2017 . The following tables summarize the annual activity related to our gross unrecognized tax benefits (in thousands) for the years ended December 31, 2018 , 2017 , and 2016 :
|  | 2018 |  |  | 2017 |  |  | 2016 |
Balance as of January 1, |  | $ | 1,924 |  |  | $ | 2,051 |  |  | $ | 2,394 |
Increases related to prior year tax positions |  |  | 4 |  |  |  | 19 |  |  |  | - |
Decreases related to prior year positions |  |  | (9 | ) |  |  | (10 | ) |  |  | - |
Increases related to current year tax positions |  |  | - |  |  |  | - |  |  |  | - |
Decreases related to settlements with taxing authorities |  |  | - |  |  |  | - |  |  |  | (88 | )
Decreases related to lapsing of statute of limitations |  |  | (123 | ) |  |  | (136 | ) |  |  | (255 | )
Balance as of December 31, |  | $ | 1,796 |  |  | $ | 1,924 |  |  | $ | 2,051 |
If recognized, approximately $2.5 million of unrecognized tax benefits would impact our effective tax rate as of both December 31, 2018 and 2017 . Any prospective adjustments to our reserves for income taxes will be recorded as an increase or decrease to our provision for income taxes and would impact our effective tax rate. Our 2013 and 2015 through 2018 tax years remain subject to examination by the IRS for U.S. federal tax purposes, our major taxing jurisdiction. We have one tax position taken on our 2013 federal return that is under audit by the Internal Revenue Service. The position relates to a non-recurring tax credit of approximately $6.5 million . In the normal course of business, we are also subject to audits by state and local tax authorities. While it is often difficult to predict the final outcome or the timing of resolution of any particular tax matter, we believe that our reserves reflect the more likely than not outcome of known tax contingencies. We adjust these reserves, as well as the related interest, in light of changing facts and circumstances. Settlement of any particular issue would usually require the use of cash. Favorable resolution would be recognized as a reduction to our annual tax rate in the year of resolution. We do not expect any significant increases or decreases for uncertain income tax positions during the next year. Our federal tax credits of $12.0 million are available to offset future federal taxable income, if any, through 2038 . We have a federal alternative minimum tax credit carryforward of $1.0 million that, under the Tax Act, will be fully refundable by tax year 2021. Our state net operating loss carryforwards and state tax credits of $75.7 million and $0.7 million , respectively expire over various periods through 2038 based on jurisdiction.

X
- References No definition available. + Details
Name: | us-gaap_DisclosureTextBlockAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- 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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration