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Income Taxes
9 Months Ended
Sep. 30, 2017
Income Tax Disclosure [Abstract]  
Income Taxes
Income Taxes
Since inception, the Company has operated solely within the United States. The Company’s effective income tax rate was 31.6% and 29.9%, and 33.4% and 33.4% for the three and nine months ended September 30, 2017 and 2016, respectively. The significant drivers of the effective tax rate are the loss on extinguishment of debt resulting from the retirement of the 8.5% Notes (see Note 6), allocation of income to noncontrolling interests and the domestic production activities deduction.
Management assesses its deferred tax assets to determine whether all or any portion of the asset is more likely than not unrealizable under ASC 740. The Company is required to establish a valuation allowance for any portion of the asset that management concludes is more likely than not to be unrealizable. 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. The Company's assessment considers all evidence, both positive and negative, including the nature, frequency and severity of any current and cumulative losses, taxable income in carry back years, the scheduled reversal of deferred tax liabilities, tax planning strategies, and projected future taxable income in making this assessment. At September 30, 2017, the Company had no valuation allowance recorded.
At September 30, 2017, the Company had no remaining federal net operating loss carryforwards and $56.5 million of remaining state net operating loss carryforwards. State net operating loss carryforwards begin to expire in 2031. In addition, as of September 30, 2017, the Company had unused federal and state built-in losses of $52.1 million and $7.3 million, respectively. The five year testing period for built-in losses expires in 2017 and the unused built-in loss carryforwards begin to expire in 2032. The Company had AMT credit carryovers of $1.4 million at September 30, 2017, which have an indefinite life.
FASB ASC Topic 740, Income Taxes (“ASC 740”), prescribes a recognition threshold and a measurement criterion for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be considered more likely than not to be sustained upon examination by taxing authorities. The Company records interest and penalties related to uncertain tax positions as a component of the provision for income taxes. The Company has no unrecognized tax benefits.
The Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction and various state jurisdictions. The Company is subject to U.S. federal income tax examination for calendar tax years ended 2013 through 2016 and forward. The Company is subject to various state income tax examinations for calendar tax years ended 2009 through 2016 and forward.