Annual report pursuant to Section 13 and 15(d)

Income Taxes

v3.6.0.2
Income Taxes
12 Months Ended
Dec. 31, 2016
Income Tax Disclosure [Abstract]  
Income Taxes
Income Taxes
Income tax expense (benefit) included the following:
 
Year Ended December 31,
 
2016
 
2015
 
2014
Current:
 
 
 
 
 
Federal
$
(44,925
)
 
$
44,694

 
$
15,171

State
786

 
(2,318
)
 
1,781

Total current
$
(44,139
)
 
$
42,376

 
$
16,952

Deferred:
 
 
 
 
 
Federal
$
2,630

 
$
3,360

 
$
7,176

State
(5,280
)
 
2,546

 
(1,215
)
Total deferred
(2,650
)
 
5,906

 
5,961

Income tax expense (benefit)
$
(46,789
)
 
$
48,282

 
$
22,913


A reconciliation between the income tax expense (benefit) computed on pre-tax income (loss) at the statutory federal rate and the actual provision for income tax expense (benefit) is as follows:
 
Year Ended December 31,
 
2016
 
2015
 
2014
Computed expected tax expense (benefit)
$
(44,318
)
 
$
45,734

 
$
32,474

State and local income taxes, net of federal benefit
(5,119
)
 
1,604

 
532

Non-controlling interest
(1,393
)
 
(10,272
)
 
(11,097
)
Changes in non-deductible goodwill

 
13,660

 
1,411

Other, net
4,041

 
(2,444
)
 
(407
)
Income tax expense (benefit)
$
(46,789
)
 
$
48,282

 
$
22,913


The following table sets forth the tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities:
 
As of December 31,
 
2016
 
2015
Deferred income tax assets:
 
 
 
Accounts receivable, allowance
$
197

 
$
198

Inventories
8,273

 
9,530

Accrued liabilities and other
1,564

 
1,605

Post-retirement benefits
16,623

 
18,437

Derivative instruments designated as cash flow hedges
721

 
800

Non-current accrued liabilities and other
20,970

 
24,383

Net operating loss carryover
23,923

 
21,212

Tax credits
1,141

 
1,150

Other
6,999

 
4,332

Deferred income tax assets
$
80,411

 
$
81,647

Deferred income tax liabilities:
 
 
 
Deferred gain on the Offering of the Partnership
$
50,115

 
$
50,178

Deferred charges
358

 
401

Unrealized gains
(1,208
)
 
4,645

Property, plant and equipment
369,406

 
370,225

Other non-current
16,233

 
11,631

Intangibles
12,506

 
11,361

Deferred income tax liabilities
$
447,410

 
$
448,441


In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those 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. Based upon the level of taxable income and projections for future taxable income, over the periods which the deferred tax assets are deductible, management believes it is more likely than not that we will realize the benefits of these deductible differences in future periods.
At December 31, 2016, we have net operating loss carryforwards for state and local income tax purposes of $409,458 which are available to offset future state taxable income in various years through 2033.
We have elected to recognize interest expense related to the underpayment of income taxes in interest expense, and penalties relating to underpayment of income taxes as a reduction to other income, net, in the consolidated statements of operations. We are subject to U.S. federal income tax, and income tax in multiple state jurisdictions with California, Texas, New Mexico, Oklahoma and Louisiana comprising the majority of our state income tax. The federal tax years 2000 to 2011 are closed to audit. In general, the state tax years open to audit range from 2011 to 2015. Our liability for unrecognized tax benefits and accrued interest did not increase during the year ended December 31, 2016, as there were no unrecognized tax benefits recorded in 2016.