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11. INCOME TAXES | 12 Months Ended
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Dec. 31, 2016
Income Tax Disclosure [Abstract] |
INCOME TAXES | The Company recorded a provision (benefit) for income taxes as follows (in thousands):
|  | Years Ended December 31, |
|  | 2016 |  |  | 2015 |  |  | 2014 |
Current provision (benefit) |  | $ | 141 |  |  | $ | (8,011 | ) |  | $ | 11,040 |
Deferred provision (benefit) |  |  | (1,122 | ) |  |  | (2,023 | ) |  |  | 4,097 |
Total |  | $ | (981 | ) |  | $ | (10,034 | ) |  | $ | 15,137 |
A reconciliation of the differences between the United States statutory federal income tax rate and the effective tax rate as provided in the consolidated statements of operations is as follows:
|  | Years Ended December 31, |
|  | 2016 |  |  | 2015 |  |  | 2014 |
Statutory rate |  |  | 35.0 | % |  |  | 35.0 | % |  |  | 35.0 | %
State income taxes, net of federal benefit |  |  | 6.4 |  |  |  | 9.2 |  |  |  | 10.0 |
Change in valuation allowance |  |  | (298.8 | ) |  |  | (4.2 | ) |  |  | (11.5 | )
Fair value adjustments and warrant inducements |  |  | 37.2 |  |  |  | 2.0 |  |  |  | 31.8 |
Domestic production gross receipts deduction |  |  | – |  |  |  | (2.9 | ) |  |  | (2.0 | )
Section 382 reduction to loss carryover |  |  | – |  |  |  | 0.1 |  |  |  | (24.2 | )
Stock compensation |  |  | 58.8 |  |  |  | (0.8 | ) |  |  | – |
Non-deductible items |  |  | 8.9 |  |  |  | (0.5 | ) |  |  | 0.6 |
Change in tax status of subsidiary |  |  | – |  |  |  | – |  |  |  | (1.6 | )
Other |  |  | (27.5 | ) |  |  | (3.2 | ) |  |  | (1.3 | )
Effective rate |  |  | (180.0 | )% |  |  | 34.7 | % |  |  | 36.8 | %
Deferred income taxes are provided using the asset and liability method to reflect temporary differences between the financial statement carrying amounts and the tax bases of assets and liabilities using presently enacted tax rates and laws. The components of deferred income taxes included in the consolidated balance sheets were as follows (in thousands):
|  | December 31, |
|  | 2016 |  |  | 2015 |
Deferred tax assets: |  |  |  |  |  |  |  |
Net operating loss carryforwards |  | $ | 45,709 |  |  | $ | 53,867 |
Railcar contracts |  |  | 3,348 |  |  |  | 5,143 |
Pension liability |  |  | 2,204 |  |  |  | 2,647 |
R&D and AMT credits |  |  | 2,465 |  |  |  | 2,303 |
Derivatives |  |  | 1,228 |  |  |  | – |
Litigation accrual |  |  | – |  |  |  | 1,290 |
Capital leases |  |  | – |  |  |  | 1,021 |
Stock-based compensation |  |  | 946 |  |  |  | 724 |
Allowance for doubtful accounts and other assets |  |  | 856 |  |  |  | – |
Other |  |  | 4,316 |  |  |  | 5,367 |
Total deferred tax assets |  |  | 61,072 |  |  |  | 72,362 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
Fixed assets |  |  | (45,757 | ) |  |  | (30,272 | )
Intangibles |  |  | (1,091 | ) |  |  | (1,091 | )
Debt basis |  |  | – |  |  |  | (912 | )
Other |  |  | (1,593 | ) |  |  | (1,423 | )
Total deferred tax liabilities |  |  | (48,441 | ) |  |  | (33,698 | )
Valuation allowance |  |  | (12,683 | ) |  |  | (39,838 | )
Net deferred tax liabilities |  | $ | (52 | ) |  | $ | (1,174 | )
Classified in balance sheet as: |  |  |  |  |  |  |  |
Other liabilities |  | $ | (52 | ) |  | $ | (1,174 | )
A portion of the Company’s net operating loss carryforwards will be subject to provisions of the tax law that limit the use of losses incurred by a company prior to the date certain ownership changes occur. Due to the limitation, a significant portion of these net operating loss carryforwards will expire regardless of whether the Company generates future taxable income. After reducing these net operating loss carryforwards for the amount which will expire due to this limitation, the Company had remaining federal net operating loss carryforwards of approximately $117,683,000 and state net operating loss carryforwards of approximately $101,838,000 at December 31, 2016. These net operating loss carryforwards expire as follows (in thousands):
Tax Years |  | Federal |  |  | State |
2017–2021 |  | $ | – |  |  | $ | 22,425 |
2022–2026 |  |  | 3,781 |  |  |  | 4,109 |
2027–2031 |  |  | 1,654 |  |  |  | 30,102 |
2032–2036 |  |  | 112,248 |  |  |  | 45,202 |
|  | $ | 117,683 |  |  | $ | 101,838 |
Certain of these net operating losses are not immediately available, but become available to be utilized in each of the years ended December 31, as follows (in thousands):
Year |  | Federal |  |  | State |
2017 |  | $ | 16,328 |  |  | $ | 40,037 |
2018 |  |  | 6,441 |  |  |  | 4,809 |
2019 |  |  | 6,441 |  |  |  | 4,809 |
2020 |  |  | 6,374 |  |  |  | 4,781 |
2021 |  |  | 6,308 |  |  |  | 4,754 |
Thereafter |  |  | 75,791 |  |  |  | 42,648 |
|  | $ | 117,683 |  |  | $ | 101,838 |
To the extent amounts are not utilized in any year, they may be carried forward to the next year until expiration. These amounts may change if there are future additional limitations on their utilization. In assessing whether the deferred tax assets are realizable, a more likely than not standard is applied. If it is determined that it is more likely than not that deferred tax assets will not be realized, a valuation allowance must be established against the deferred tax assets. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which the associated temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. A valuation allowance was established in the amount of $12,683,000, $39,838,000 and $4,147,000 at December 31, 2016, 2015 and 2014, respectively, based on the Company’s assessment of the future realizability of certain deferred tax assets. For the year ended December 31, 2015, the Company recorded an increase in the valuation allowance of $35,691,000, including $34,469,000 related to the acquisition of PE Central. For the year ended December 31, 2016, the Company recorded a decrease in the valuation allowance of $27,155,000, including approximately $13,500,000 related to finalization of the deferred tax attributes of PE Central at the date of acquisition, and approximately $11,500,000 related to the sale of a noncontrolling interest in Pacific Aurora. During the year ended December 31, 2015, the Company recognized $1,500,000 in tax benefit related to adjustments to its tax asset valuation allowance from a prior year. The valuation allowance on deferred tax assets is related to future deductible temporary differences and net operating loss carryforwards (exclusive of net operating losses associated with items recorded directly to equity) for which the Company has concluded it is more likely than not that these items will not be realized in the ordinary course of operations. At December 31, 2016, the Company had no increase or decrease in unrecognized income tax benefits for the year as a result of uncertain tax positions taken in a prior or current period. There was no accrued interest or penalties relating to tax uncertainties at December 31, 2016. Unrecognized tax benefits are not expected to increase or decrease within the next twelve months. The Company is subject to income tax in the United States federal jurisdiction and various state jurisdictions and has identified its federal tax return and tax returns in state jurisdictions below as “major” tax filings. These jurisdictions, along with the years still open to audit under the applicable statutes of limitation, are as follows:
Jurisdiction | Tax Years
Federal | 2013 – 2015
Arizona | 2013 – 2015
California | 2012 – 2015
Colorado | 2012 – 2015
Idaho | 2013 – 2015
Illinois | 2013 – 2015
Indiana | 2013 – 2015
Iowa | 2013 – 2015
Kansas | 2014 – 2015
Minnesota | 2014 – 2015
Missouri | 2014 – 2015
Nebraska | 2013 – 2015
Oklahoma | 2014 – 2015
Oregon | 2013 – 2015
Texas | 2012 – 2015
However, because the Company had net operating losses and credits carried forward in several of the jurisdictions, including the United States federal and California jurisdictions, certain items attributable to closed tax years are still subject to adjustment by applicable taxing authorities through an adjustment to tax attributes carried forward to open 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=65882285&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=65882285&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=65882285&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=65882285&loc=d3e32537-109319 + Details
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