Income Taxes (Tables)

12 Months Ended

Dec. 31, 2013

Income Taxes [Abstract]

Components of income tax expense (benefit)

The components of income tax expense (benefit) are as follows:

(in thousands)	Year Ended December 31, 2013			Year Ended December 31, 2012
Federal - current	$	750		$	18,930
State - current		1,394			15,911
Total current		2,144			34,841
Federal - deferred		(1,270	)		38,167
State - deferred		(165	)		-
Change in valuation allowance		1,435			(38,167	)
Total deferred		-			-
Income tax expense (benefit)	$	2,144		$	34,841

Income tax reconciliation

The components of pretax income (loss) and the difference between income taxes computed at the statutory federal rate and the provision for income taxes are as follows:

(in thousands)	Year Ended December 31, 2013			Year Ended December 31, 2012
Income (loss) before income taxes	$	(3,874	)	$	180,770
Tax expense (benefit) :
Tax at statutory federal rate	$	(1,356	)	$	63,270
State income taxes		256			15,911
Federal interest		750			-
State interest		1,138			-
Permanent items		(79	)		(6,173	)
Other		-			-
Change in valuation allowance		1,435			(38,167	)
Income tax expense (benefit)	$	2,144		$	34,841

A reconciliation of the United States federal statutory rate to the Company's effective income tax rate is as follows:

	Year Ended December 31, 2013	Year Ended December 31, 2012
Tax at statutory federal rate	35.0%	35.0%
State income taxes	(6.6%)	8.8%
Federal interest	(19.4%)	-
State interest	(29.4%)	-
Permanent difference, tax credits and other adjustments	2.1%	(3.4%)
Other	0.0%	-
Change in valuation allowance	(37.0%)	(21.1%)
Effective income tax rate	(55.3)%	19.3%

Net deferred tax asset

The Carteret Tax Basis and federal NOL carryforward deductions utilized as part of the Company's 2012 federal income tax return as filed were as follows:

(in thousands)
Carteret Tax Basis	$	152,000
Federal NOL carryforwards utilized	$	25,000

Calculation of net federal uncertain tax position reserve

A roll forward of the uncertain tax positions reserve, excluding accrued federal and state interest is as follows:

(in thousands)	December 31, 2013		December 31, 2012
Uncertain tax position reserve excluding accrued interest, at beginning of period	$	34,157	$	-
Federal uncertain tax position reserve excluding accrued interest		-		18,429
State uncertain tax position reserve excluding accrued interest		-		15,728
Uncertain tax position reserve excluding accrued interest, at end of period	$	34,157	$	34,157

Uncertain tax positions tax reserve

The Company's uncertain tax positions tax reserve, including accrued interest is as follows:

(in thousands)	December 31, 2013		December 31, 2012
Federal uncertain tax positions reserve, including accrued federal interest	$	19,179	$	18,429
State uncertain tax positions reserve, including accrued state interest		16,866		15,728
Total uncertain tax positions reserve, including accrued federal and state interest	$	36,045	$	34,157

Interest expense related to the uncertain tax positions

The interest expense related to the uncertain tax positions is as follows:

(in thousands)	Year Ended December 31, 2013		Year Ended December 31, 2012
Federal	$	750	$	-
State jurisdictions		1,138		-
Interest expense - taxes	$	1,888	$	-

Federal net operating loss carryforwards

The federal NOL carryforwards as of December 31, 2013 are as follows:

Tax Year Originating	Tax Year Expiring	Amount
2013	2033		$	3,600,000

State net operating loss carryforwards

The state NOL carryforwards as of December 31, 2013 are as follows:

Tax Year Originating	Tax Year Expiring	Amount
2011	2031		$	1,900,000
2013	2033			3,400,000
			$	5,300,000

Calculation of net deferred tax assets from NOL carryforwards

The Company has calculated a net deferred tax asset arising primarily from NOL carryforwards as follows.

	December 31, 2013			December 31, 2012
Net deferred tax asset	$	1,400,000		$	-
Valuation allowance		(1,400,000	)		-
Net deferred tax asset recognized	$	-		$	-

Indemnification asset

The Company's indemnification asset which reflects the potential amounts reimbursable pursuant to the tax gross-up provision of the Settlement Agreement for the federal uncertain tax position reserve recognized, is as follows:

(in thousands)	December 31, 2013			December 31, 2012
Indemnification asset – federal tax gross-up		$	18,429		$	18,930