Entity information:
1
3.
INCOME TAXES
:
 
Provision for Income Taxes
 
The tax provisions
are summarized as follows (in thousands):
 
   
Year Ended December 31,
  
   
2017
    
2016
    
201
5
  
                         
Current provision-
                        
Federal
   $
22,443
     $
15,236
     $
7,513
  
State
    
4,030
      
2,300
      
2,592
  
                         
     
26,473
      
17,536
      
10,105
  
                         
Deferred provision-
                        
Federal
    
(64,821
 )    
8,260
      
29,561
  
State
    
2,618
      
71
      
2,084
  
                         
     
(62,203
 )    
8,331
      
31,645
  
                         
Provision (benefit) for income taxes
   $
(35,730
 )   $
25,867
     $
41,750
  
 
A reconciliation of taxes based on the federal statutory rates and the provisions (benefits) for income taxes are summarized as follows (in thousands):
 
   
Year Ended December 31,
  
   
2017
    
20
16
    
2015
  
                         
Income taxes at the federal statutory rate
   $
47,749
     $
23,255
     $
37,733
  
State income taxes, net of federal benefit
    
3,246
      
1,552
      
3,053
  
Tax effect of permanent differences
    
(4,097
 )    
887
      
959
  
Revaluation of deferred taxes
    
(82,862
 )    
−
      
−
  
Other, net
    
234
      
173
      
5
  
                         
(B
enefit) provision for income taxes
   $
(35,730
 )   $
25,867
     $
41,750
  
 
The components of income taxes
recorded in other comprehensive income and paid in capital consisted of the following (in thousands):
 
   
Year Ended December 31,
  
   
201
7
    
2016
    
201
5
  
Income tax expense (benefit) related to components of other comprehensive income:
                        
Change in fair value of cash flow swaps
   $
−
     $
−
     $
92
  
Change in fair value of available-for-sale securities
    
183
      
13
      
7
  
Total
   $
183
     $
13
     $
99
  
                         
Paid in capital
– stock based compensation
   $
−
     $
294
     $
337
  
 
The following summarizes the
components of net deferred income tax liabilities included in the balance sheet (in thousands):
 
   
December 31,
  
   
201
7
    
201
6
  
Deferred income tax (assets) liabilities:
                
Inventory
   $
(3,637
 )   $
(5,074
 )
Accounts receivable
    
(157
 )    
(203
 )
Capital lease obligations
    
(19,480
 )    
(31,263
 )
Stock options
    
(6,899
 )    
(11,655
 )
Accrued liabilities
    
(2,533
 )    
(3,610
 )
State net operating loss carry forward
    
(2,262
 )    
(1,921
 )
State tax credit
    
(410
 )    
(380
 )
Other
    
(3,627
 )    
(5,170
 )
Difference between book and tax basis- Depreciation and amortization
    
174,266
      
256,352
  
     
135,261
      
197,076
  
Valuation allowance
    
50
      
255
  
                 
Net deferred income tax liability
   $
135,311
     $
197,331
  
 
On
December 22, 2017,
the Tax Act was enacted.
  The Tax Act includes, among other items, a reduction of the U.S. federal corporate tax rate from
35%
to
21%
effective
January 1, 2018.
The Tax Act makes broad and complex changes to the U.S. tax code, some of which affect the Company’s 
2017
year end results. Staff Accounting Bulletin
No.
118
(SAB
118
) provides guidance that allows registrants to provide a reasonable estimate of the Tax Act in their financial statements and adjust the reported impact in a measurement period
not
to exceed
one
year.  At
December 31, 2017,
the Company made a reasonable estimate of the effects of the Tax Act on its existing deferred tax balances and recognized a provisional net tax benefit of
$82.9
million, which is included as a component of income tax expense.  The provision benefit recorded is primarily a result of the remeasurement of the Company’s deferred tax assets and liabilities at the rate in which they will reverse. The Company will continue to refine its calculations as additional analysis is completed.  In addition, the Company’s estimates
may
also be affected as it gains a more thorough understanding of the tax law. 
 
At
December 31,
201
7,
the Company had approximately
$44.4
million in state net operating loss carry forwards that expire from
2017
through
2037.
The Company has a valuation allowance of
$50,000
associated with state net operating losses. The valuation allowance decreased by
$205,000
due to expiration of certain losses that had previously had a valuation allowance.
 
The Company
had unrecognized income tax benefits totaling
$2.6
million as a component of accrued liabilities at
December 31, 2017,
and
$2.4
million at
December 31, 2016,
the total of which, if recognized, would impact the Company’s effective tax rate. An unfavorable settlement would require a charge to income tax expense and a favorable resolution would be recognized as a reduction to income tax expense. The Company recognizes interest accrued related to unrecognized tax benefits in income tax expense. During the years ended
December 31, 2017,
2016
and
2015,
the Company recognized approximately
$21,050,
$34,800,
and
$11,600
in interest.
No
amounts were accrued for penalties. The Company had approximately
$166,000,
$145,000
and
$110,100
for the payment of interest accrued at
December 31, 2017,
2016
and
2015,
respectively.
 
The Company does
not
anticipate a
significant change in the amount of unrecognized tax benefits in the next
12
months. As of
December 31, 2017,
the tax years ended
December 31,
2014
through
2017
remained subject to audit by federal tax authorities and the tax years ended
December 31,
2013
through
2017,
remained subject to audit by state tax authorities.
 
A reconciliation of the change in the unrecognized tax benefits is as follows
(in thousands):
 
   
201
7
    
201
6
    
201
5
  
Unrecognized tax benefits at beginning of period
   $
2,401
     $
2,332
     $
2,087
  
Gross increases
– tax positions in current year
    
619
      
429
      
692
  
Gross increases
– tax positions in a prior year
    
 
      
 
      
−
  
Reductions due to lapse of statute of limitations
    
(465
 )    
(360
 )    
(447
 )
Unrecognized tax benefits at end of period
   $
2,555
     $
2,401
     $
2,332