Note 7 - Income Taxes

12 Months Ended

Dec. 31, 2015

Notes to Financial Statements

Income Tax Disclosure [Text Block]

7. Income Taxes

Income tax expense attributable to earnings before income taxes consists of (in thousands):

	Years ended December 31,
	2015		2014		2013
Current:
Federal	$	160,235	$	130,761	$	144,299
State and local		22,306		19,705		18,811
		182,541		150,466		163,110
Deferred:
Federal		71,292		72,547		41,811
State and local		9,135		6,796		6,265
		80,427		79,343		48,076
Total tax expense	$	262,968	$	229,809	$	211,186

Income tax expense attributable to earnings before income taxes differed from the amounts computed using the statutory federal income tax rate of 35% as follows (in thousands):

	Years ended December 31,
	2015			2014			2013
Income tax at federal statutory rate	$	241,571		$	211,610		$	193,749
State tax, net of federal effect		18,671			17,357			13,551
Nondeductible meals and entertainment		1,420			1,395			1,543
Change in effective state tax rate, net of federal benefit		1,761			256			3,708
Change in valuation allowance		-			-			(755	)
Other, net		(455	)		(809	)		(610	)
Total tax expense	$	262,968		$	229,809		$	211,186

Income taxes receivable was $76.7 million and $79.8 million at December 31, 2015 and 2014, respectively. These amounts have been included in other current assets in our Consolidated Balance Sheets. The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at December 31, 2015 and 2014, are presented below (in thousands):

	December 31,
	2015			2014
Deferred tax assets:
Insurance accruals	$	33,522		$	30,565
Allowance for doubtful accounts		2,335			2,291
Compensation accrual		13,991			15,260
Deferred compensation accrual		24,687			25,042
Federal benefit of state uncertain tax positions		12,751			12,268
Capital loss carry-forward		-			1,443
Other		4,036			3,954
Total gross deferred tax assets		91,322			90,823
Valuation allowance		(552	)		(1,994	)
Total deferred tax assets, net of valuation allowance		90,770			88,829
Deferred tax liabilities:
Plant and equipment, principally due to differences in depreciation		786,840			707,071
Prepaid permits and insurance, principally due to expensing for income tax purposes		33,064			30,012
Other		11,086			11,539
Total gross deferred tax liabilities		830,990			748,622
Net deferred tax liability	$	740,220		$	659,793

Guidance on accounting for uncertainty in income taxes prescribes recognition and measurement criteria and requires that we assess whether the benefits of our tax positions taken are more likely than not of being sustained under tax audits.  We have made adjustments to the balance of unrecognized tax benefits, a component of other long-term liabilities on our Consolidated Balance Sheet, as follows (in millions):

	December 31,
	2015			2014			2013
Beginning balance	$	31.6		$	29.7		$	25.8
Additions based on tax positions related to the current year		9.4			8.2			7.0
Additions/(reductions) based on tax positions taken in prior years		(2.5	)		0.4			(1.2	)
Reductions due to settlements		(3.0	)		(3.7	)		(0.1	)
Reductions due to lapse of applicable statute of limitations		(3.5	)		(3.0	)		(1.8	)
Ending balance	$	32.0		$	31.6		$	29.7

At December 31, 2015 and 2014, we had a total of $32.0 million and $31.6 million, respectively, in gross unrecognized tax benefits.  Of these amounts, $20.8 million and $20.5 million represent the amount of unrecognized tax benefits that, if recognized, would impact our effective tax rate in 2015 and 2014, respectively.  Interest and penalties related to income taxes are classified as interest expense in our Consolidated Financial Statements.  The amount of accrued interest and penalties recognized during the years ended December 31, 2015, 2014, and 2013, was $1.9 million, $1.8 million, and $1.9 million, respectively. Future changes to unrecognized tax benefits will be recognized as income tax expense and interest expense, as appropriate.  The total amount of accrued interest and penalties for such unrecognized tax benefits at December 31, 2015 and 2014, was $4.0 million and $3.5 million, respectively.

Tax years 2012 and forward remain subject to examination by federal tax jurisdictions, while tax years 2005 and forward remain open for state jurisdictions.