Note 3 - Income Taxes

9 Months Ended

Sep. 30, 2016

Notes to Financial Statements

Income Tax Disclosure [Text Block]

Note 3.   Income Taxes

Major components of our income tax provision (benefit) for the three and nine months ended September 30, 2016 and 2015 are as follows (in thousands):

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2016			2015			2016		2015
Current:
Domestic	$	4,123		$	(4,776	)	$	4,122	$	(2,911	)
Foreign		5,773			451			8,416		606
Total current income tax provision (benefit)		9,896			(4,325	)		12,538		(2,305	)
Deferred:
Domestic		(5,723	)		1,812			3,642		5,400
Foreign		5,280			(2,987	)		6,423		(7,288	)
Total deferred income tax provision (benefit)		(443	)		(1,175	)		10,065		(1,888	)
Total income tax provision (benefit)	$	9,453		$	(5,500	)	$	22,603	$	(4,193	)

As of September 30, 2016, we have a net deferred tax asset in the U.S. of $24.8 million, a net deferred tax liability in Canada of $125.6 million, and a net deferred tax asset in Mexico of $2.9 million, for a consolidated worldwide net deferred tax liability of $97.9 million. Our ability to utilize our deferred tax assets depends on future taxable income generated from operations. At September 30, 2016 and December 31, 2015, the balances of the valuation allowances on our deferred tax assets were $107 million and $116 million, respectively, primarily for net operating losses and tax credit carryforwards. The amount of the deferred tax asset considered recoverable, however, could be reduced in the near term if estimates of future taxable income are reduced.

During the quarter ended June 30, 2016, there was a change in judgment about the realizability of our deferred tax assets in Mexico. Based on revised projections of future taxable income, tax net operating losses are now projected to be fully utilized. The valuation allowance in Mexico decreased to $1.3 million based on this change in judgment.

The current income tax provisions for the three and nine months ended September 30, 2016 and 2015 vary from the amounts that would have resulted from applying the statutory income tax rate to pre-tax income primarily due to the effects of percentage depletion for all periods presented and the impact of taxation in foreign jurisdictions.