(13)

Income Taxes

Income Tax Provision

The income tax provision from continuing operations was as follows (in thousands):

Year Ended December 31,	2016			2015		2014
Current:
Federal	$	68,088		$	58,408	$	56,342
State		13,884			14,572		7,944
		81,972			72,980		64,286
Deferred:
Federal		4,893			6,046		10,433
State		(400	)		679		236
		4,493			6,725		10,669
Total	$	86,465		$	79,705	$	74,955

December

31,

2016

and

2015,

we had income taxes receivable of

$2.4

million and

$23.8

million, respectively, included as a component of other current assets in our Consolidated Balance Sheets.

The reconciliation between amounts computed using the federal income tax rate of

35%

and our income tax provision from continuing operations is shown in the following tabulation (in thousands):

Year Ended December 31,	2016			2015			2014
Federal tax provision at statutory rate	$	99,233		$	91,947		$	73,673
State taxes, net of federal income tax benefit		10,784			9,357			6,526
Equity investment basis difference		9,470			11,048			1,422
Non-deductible items		1,436			882			1,766
Permanent differences related to employee stock purchase program		139			156			68
Net change in valuation allowance		(5,133	)		(3,303	)		(4,121	)
General business credits		(27,950	)		(29,093	)		(4,002	)
Other		(1,514	)		(1,289	)		(377	)
Income tax provision	$	86,465		$	79,705		$	74,955

Deferred Taxes

Individually significant components of the deferred tax assets and (liabilities) are presented below (in thousands):

December 31,	2016			2015
Deferred tax assets:
Deferred revenue and cancellation reserves	$	49,332		$	39,323
Allowances and accruals, including state NOL carryforward amounts		49,074			43,185
Interest on derivatives		—			206
Credits and other		1,781			2,581
Capital loss carryforward		—			10,414
Valuation allowance		(227	)		(5,360	)
Total deferred tax assets		99,960			90,349

Deferred tax liabilities:
Inventories		(22,253	)		(21,313	)
Goodwill		(41,107	)		(31,258	)
Property and equipment, principally due to differences in depreciation		(93,943	)		(84,355	)
Prepaid expenses and other		(1,732	)		(6,552	)
Total deferred tax liabilities		(159,035	)		(143,478	)
Total	$	(59,075	)	$	(53,129	)

We consider 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 future taxable income during the periods in which those temporary differences become deductible. We consider the scheduled reversal of deferred tax liabilities (including the impact of available carryback and carryforward periods), projected future taxable income and tax-planning strategies in making this assessment.

As of

December

31,

2016,

we had a

$0.2

million valuation allowance recorded associated with state net operating losses. The valuation allowance decreased

$5.1

million in the current year primarily as a result of our equity investment in a partnership with U.S. Bancorp Community Development Corporation, expected state net operating loss utilization, and a certain amount of capital loss expiration. See also Note

18.

As of

December

31,

2016,

we no longer have an amount of capital loss carryforward. During

2016,

we utilized the capital loss carryforward primarily related to capital gains generated as a result of our equity investment in a partnership with U.S. Bancorp Community Development Corporation. The remaining amount of capital loss and associated valuation allowance of

$0.2

million were written off due to expiration as of

December

31,

2016.

State net operating loss carryforward amounts totaled approximately

$1.5

million, tax effected, at

December

31,

2016

and have expiration dates through

2036.

We believe that it is more likely than not that the benefit from certain state NOL carryforward amounts will not be realized. In recognition of this risk, we have recorded a valuation allowance of

$0.2

million on the deferred tax assets relating to these state NOL carryforwards. Additionally, we have

$1.5

million, tax effected, in state tax credit carryforwards with expiration dates through

2026.

We believe it is more likely than not that the benefits from these state tax credit carryforwards will be realized.

Unrecognized Tax Benefits

The following is a reconciliation of our unrecognized tax benefits (in thousands):

Balance, December 31, 2014	$	1,495
Decrease related to tax positions taken - prior year		(464	)
Balance, December 31, 2015		1,031
Decrease related to tax positions taken - prior year		(1,031	)
Balance, December 31, 2016	$	—

The unrecognized tax benefits recorded were acquired as part of the acquisition of DCH. We recorded a tax indemnification asset related to the unrecognized tax benefit as we determined the amount would be recoverable from the seller. We have

unrecognized tax benefits recorded as of

December

31,

2016.

Open tax years at

December

31,

2016

included the following:

Federal		2013	-	2016
19 states		2012	-	2016