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Income Tax
12 Months Ended
Dec. 31, 2013
Income Tax  
Income Tax

22. Income Tax

        The components of the provision for income tax expense (benefit) are as follows (in thousands):

 
  Year ended December 31,  
 
  2013   2012   2011  

Current income tax (benefit) expense:

                   

Federal

  $ (11,078 ) $ (2,964 ) $ 15,039  

State

    (130 )   598     2,539  
               
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Total current

    (11,208 )   (2,366 )   17,578  
               
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Deferred income tax expense (benefit):

                   

Federal

    24,382     38,531     (4,732 )

State

    (505 )   2,163     803  
               
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Total deferred

    23,877     40,694     (3,929 )
               
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Provision for income tax

  $ 12,669   $ 38,328   $ 13,649  
               
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
               

        A reconciliation of the provision for income tax and the amount computed by applying the federal statutory rate of 35% to the income before income taxes for each of the years ended December 31, 2013, 2012 and 2011 is as follows (in thousands):

Year ended December 31, 2013:

 
  Corporation   Partnership   Eliminations   Consolidated  

Income before provision for income tax

  $ 31,145   $ 42,131   $ (20,162 ) $ 53,114  
                         
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
                         

Federal statutory rate

    35 %   0 %   0 %      
                     
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Federal income tax at statutory rate

    10,901     —     —   $ 10,901  

Permanent items

    40     —     —     40  

State income taxes net of federal benefit

    (729 )   39     —     (690 )

Prior period adjustments and tax rate changes

    (147 )   —     —     (147 )

Provision on income from Class A units(1)

    2,617     —     —     2,617  

Other

    (52 )   —     —     (52 )
                   
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Provision for income tax

  $ 12,630   $ 39   $ —   $ 12,669  
                   
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
                   

Year ended December 31, 2012:

 
  Corporation   Partnership   Eliminations   Consolidated  

Income before provision for income tax

  $ 74,192   $ 178,817   $ 2,284   $ 255,293  
                         
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
                         

Federal statutory rate

    35 %   0 %   0 %      
                     
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Federal income tax at statutory rate

    25,967     —     —   $ 25,967  

Permanent items

    28     —     —     28  

State income taxes net of federal benefit

    688     1,689     —     2,377  

Current year change in valuation allowance

    (5 )   —     —     (5 )

Prior period adjustments and tax rate changes

    (2,517 )   —     —     (2,517 )

Provision on income from Class A units(1)

    12,412     —     —     12,412  

Other

    66     —     —     66  
                   
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Provision for income tax

  $ 36,639   $ 1,689   $ —   $ 38,328  
                   
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
                   

Year ended December 31, 2011:

 
  Corporation   Partnership   Eliminations   Consolidated  

Income before provision for income tax

  $ 3,813   $ 122,642   $ (8,006 ) $ 118,449  
                         
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
                         

Federal statutory rate

    35 %   0 %   0 %      
                     
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Federal income tax at statutory rate

    1,335     —     —   $ 1,335  

Permanent items

    36     —     —     36  

State income taxes net of federal benefit

    102     2,742     —     2,844  

Current year change in valuation allowance

    (64 )   —     —     (64 )

Prior period adjustments and tax rate changes

    163     —     —     163  

Provision on income from Class A units(1)

    9,323     —     —     9,323  

Other

    12     —     —     12  
                   
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Provision for income tax

  $ 10,907   $ 2,742   $ —   $ 13,649  
                   
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
                   

(1)
The Corporation and the General Partner own Class A units of the Partnership that were received in the merger of the Corporation and the Partnership completed in February 2008. The Class A units share, on a pro-rata basis, in income or loss of the Partnership, except for items attributable to the Partnership's ownership or sale of shares of the Corporation's common stock (as discussed in Note 2). The provision for income tax on income from Class A units includes intra period allocations to continued operations and excludes allocations to equity.

        The deferred tax assets and liabilities resulting from temporary book-tax differences are comprised of the following (in thousands):

 
  December 31,  
 
  2013   2012  

Current deferred tax assets:

             

Accruals and reserves

  $ 221   $ 98  

Derivative instruments

    4,845     5,183  

Net operating loss carryforward

    18,134     —  

Capital loss carryforward

    904     —  

State tax credit

    74     —  
           
​ ​ ​ ​ ​ ​ ​ ​

Current deferred tax assets

    24,178     5,281  

Valuation allowance

    (978 )   —  
           
​ ​ ​ ​ ​ ​ ​ ​

Deferred income taxes

    23,200     5,281  
           
​ ​ ​ ​ ​ ​ ​ ​

Long-term deferred tax assets:

             

Accruals and reserves

    329     113  

Derivative instruments

    10,102     9,915  

Phantom unit compensation

    3,328     2,624  

Capital loss carryforward

    —     904  

Net operating loss carryforward

    9,283     1  
           
​ ​ ​ ​ ​ ​ ​ ​

Long-term deferred tax assets

    23,042     13,557  

Valuation allowance

    —     (904 )
           
​ ​ ​ ​ ​ ​ ​ ​

Net long-term deferred tax assets

    23,042     12,653  
           
​ ​ ​ ​ ​ ​ ​ ​

Long-term deferred tax liabilities:

             

Property, plant and equipment and intangibles

    (4,755 )   (3,861 )

Investment in affiliated groups

    (305,853 )   (198,220 )
           
​ ​ ​ ​ ​ ​ ​ ​

Long-term deferred tax liabilities

    (310,608 )   (202,081 )
           
​ ​ ​ ​ ​ ​ ​ ​

Long-term subtotal

    (287,566 )   (189,428 )
           
​ ​ ​ ​ ​ ​ ​ ​

Net deferred tax liability

  $ (264,366 ) $ (184,147 )
           
​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​
           

        Significant judgment is required in evaluating tax positions and determining the Corporation's provision for income taxes. During the ordinary course of business, there may be transactions and calculations for which the ultimate tax determination is uncertain. However, the Corporation did not have any material uncertain tax positions for the years ended December 31, 2013, 2012 or 2011. As of December 31, 2013, the Corporation had NOL carryforwards for federal and state income tax purposes of approximately $26.5 million and $1.5 million, respectively. The federal NOL carryforwards expire in 20 years and the state NOL carryforwards expire from 5 to 20 years. Included in the NOL carryforwards is approximately $0.6 million attributable to tax deductions related to equity compensation in excess of compensation recognized for financial reporting. As of December 31, 2013, the Corporation had a capital loss carryforward of approximately $0.9 million and a state tax credit of $0.1 million, respectively, that expire in 2014. The Corporation does not anticipate utilizing this capital loss carryforward or state tax credit and has provided a 100% valuation allowance against this deferred tax asset. While the Corporation's consolidated federal tax return and any significant state tax returns are not currently under examination, the tax years 2009 through 2012 remain open to examination by the major taxing jurisdictions to which the Corporation is subject.