Note 10.  Income Taxes

The components of income tax expense are as follows for the years ended December 31, 2016,  2015 and 2014:  





Total income tax expense was different than an amount computed by applying the graduated federal statutory income tax rates to income before taxes.  The reasons for the differences are as follows for the years ended December 31, 2016,  2015 and 2014:  





During the years  ended December 31, 2016 and 2015, the Company recognized excess tax expense (benefits) of approximately $0.2 million and ($0.2) million in additional paid-in capital related to stock compensation plans.  During the year ended December 31, 2014, the Company reclassified tax benefits of approximately $1.5 million from additional paid-in capital to deferred tax liabilities associated with unrealized excess tax benefits related to stock compensation plans.  As of December 31, 2016, these tax benefits are available to offset future taxable income.  The Company recognized tax expense of $0.6 million and $0.4 million and tax benefits of $5.4 million in accumulated other comprehensive income associated with the adjustments to various employee benefit plan liabilities for the years ended December 31, 2016,  2015 and 2014, respectively, in accordance with FASB ASC 715.

The tax effects of temporary differences that give rise to significant portions of the deferred income tax assets and deferred income tax liabilities at December 31, 2016 and 2015 are presented below:





In the fourth quarter of 2016, the Company recorded an out-of-period adjustment to establish deferred tax liabilities associated with the 2015 issuance of the 8% Notes with an offset to additional paid-in capital in the amount of $5.5 million.

At December 31, 2016, the Company had federal net operating losses (“NOLs”) of $69.3 million, net of adjustments for unrecognized income tax benefits (“UTBs”) and unrealized excess tax benefits on stock compensation. The Company’s NOLs, if not utilized to reduce taxable income in future periods, will expire in varying amounts from 2022 through 2036.  The Company believes that it is more likely than not that the reversal of current deferred tax liabilities and the results of future operations will be sufficient to realize the deferred tax assets. 

The Company recognizes interest related to UTBs in interest expense and penalties on UTBs in income tax expense.  A reconciliation of the change in the UTB balance for the years ended December 31, 2016 and 2015 is as follows:



All of the Company’s UTBs as of December 31, 2016 and 2015 were adjusted through income tax expense.  The Company does not expect to have any material changes to its UTBs over the next twelve months.

While the Company believes it has adequately provided for all tax positions, amounts asserted by taxing authorities could be greater than its accrued position.  Accordingly, additional provisions could be recorded in the future as revised estimates are made or the underlying matters are settled or otherwise resolved.  In general, the tax years that remain open and subject to federal and state audit examinations are 2013-2016 as of December 31, 2016.