Income Taxes

12 Months Ended

Dec. 31, 2012

Income Tax Disclosure [Abstract]

Income Taxes

(7) Income Taxes

The Company provides for income taxes using the liability method. Accordingly, deferred taxes are recorded for the differences between the tax and book basis that will reverse in future periods (in thousands).

		2012		2011		2010
Current tax provision		$	1,742	$	1,772	$	1,516
Deferred tax provision (benefit)			(8,384)		(4,540)		(7,537)
		$	(6,642)	$	(2,768)	$	(6,021)
	A reconciliation of the provision (benefit) for income taxes is as follows (in thousands):
		2012		2011		2010
Federal income tax at statutory rate (35%)		$	(6,692)	$	(3,071)	$	(6,185)
State income taxes, net			(396)		(182)		(366)
Non-deductible expenses			258		153		156
Other			188		332		374
Tax provision (benefit)		$	(6,642)	$	(2,768)	$	(6,021)

	The principal component of the Company's net deferred tax liability are as follows (in thousands):
		Years Ended December 31,
		2012		2011
Deferred income tax assets:
	Accrued expenses	$	1,455	$	-
	Deferred transaction costs		863		-
	Net operating loss carryforward - non-current		51,488		45,569
	Investment in the Partnership		5,981		20,483
	Other comprehensive income		-		77
	Alternative minimum tax carry forward (AMT)		8		8
			59,795		66,137
	Less: valuation allowance		(5,981)		(20,483)
			53,814		45,654
Deferred income tax liabilities:
	Property, plant, equipment, and intangible assets - current		(7,075)		(501)
	Property, plant, equipment, and intangible assets - non-current		(184,889)		(129,207)
	Other comprehensive income		(56)		-
	Other		(2,424)		(1,634)
			(194,444)		(131,342)
Net deferred tax liability		$	(140,630)	$	(85,688)

At December 31, 2012, the Company had a net operating loss carryforward of approximately $135.7million that expires from 2027through 2032. The Company also has various state net operating loss carryforwards of approximately $79.1 million which will begin expiring in 2027. Management believes that it is more likely than not that the future results of operations will generate sufficient taxable income to utilize these net operating loss carryforwards before they expire. Although the Company has generated net operating losses in the past, the Company expects to have future taxable income from its investment in the Partnership, generated by the remedial allocations of income among the unitholders and the income generated by operations including effect of reversals of accelerated depreciation.

Deferred tax liabilities relating to property, plant, equipment and intangible assets represent, primarily, the Company's share of the book basis in excess of tax basis for assets inside of the Partnership. The Company has also recorded a deferred tax asset in the amount of $6.0million relating to the difference between its book and tax basis of its investment in the Partnership. Because the Company can only realize this deferred tax asset upon the liquidation of the Partnership and to the extent of capital gains, the Company has provided a full valuation allowance against this deferred tax asset.

The Company adopted the provisions of FASB ASC 740-10-25-16 on January 1, 2007. A reconciliation of the beginning and ending amount of the unrecognized tax benefits is as follows (In thousands):

Balance as of December 31, 2010	$	2,331
Decreases related to prior year tax positions		(6)
Increases related to current year tax positions		325
Balance as of December 31, 2011	$	2,650
Decreases related to prior year tax positions		(383)
Increases related to current year tax positions		320
Balance as of December 31, 2012	$	2,587

Unrecognized tax benefits of $2.6 million, if recognized, would affect the effective tax rate. It is unknown when this uncertain tax position will be resolved. In the event additional interest and penalties are incurred prior to resolution, per company policy, such penalties and interest will be recorded to income tax expense.

At December 31, 2012, tax years 2009 through 2012 remain subject to examination by the Internal Revenue Services and tax years 2008 through 2012 remain subject to examination by various state taxing authorities.