INCOME TAXES

12 Months Ended

Dec. 31, 2012

INCOME TAXES [Abstract]

INCOME TAXES

INCOME TAXES

Components of income tax benefit were as follows:

	Year Ended December 31,
	2012			2011		2010
	(Thousands of Dollars)
Current:
U.S. federal	$	465		$	129	$	(1,906	)
U.S. state	(42		)	8		(158		)
Total current	423			137		(2,064		)
Deferred:
U.S. federal	433			251		2,302
U.S. state	10			13		181
Total deferred	443			264		2,483
Total income tax benefit	$	866		$	401	$	419

The difference between income tax expense recorded in our consolidated statements of income and income taxes computed by applying the statutory federal income tax rate (35% for all years presented) to income before income tax expense is due to the fact that the majority of our income is not subject to federal income tax based on our status as a limited liability company.

The tax effects of significant temporary differences representing deferred income tax assets and liabilities were as follows:

	December 31,
	2012			2011
	(Thousands of Dollars)
Deferred income tax assets:
Share/option compensation	$	4,444		$	6,226
Pension	15,815			8,658
Capital loss	270			—
Other state	1,263			1,027
Net operating loss	1,104			—
Foreign tax credits	20			3
Other employee benefits	—			379
Deferred income tax assets	22,916			16,293
Deferred income tax liabilities:
Investment in Riverwalk Logistics, L.P. and NuStar Energy	(213		)	(212		)
Other employee benefits	(1,351		)	—
Total net deferred income tax assets	$	21,352		$	16,081

At December 31, 2012, our U.S. corporate operations had capital loss carryforwards for tax purposes, which were subject to a five-year carryforward limitation and were set to expire in 2017. The realization of deferred income tax assets recorded as of December 31, 2012 is dependent upon our ability to generate future taxable income in the United States. We believe that it is more-likely-than-not that the deferred tax assets as of December 31, 2012 will be realized, based upon expected future taxable income and potential tax planning strategies.