Income Taxes.

12 Months Ended

Dec. 31, 2020

Income Tax Disclosure [Abstract]

INCOME TAXES.

11. INCOME TAXES.

The Company recorded a provision (benefit) for income taxes as follows (in thousands):

	Years Ended December 31,
	2020			2019
Current provision (benefit)	$	—		$	(22	)
Deferred provision (benefit)		(17	)		2
Total	$	(17	)	$	(20	)

A reconciliation of the differences between the United States statutory federal income tax rate and the effective tax rate as provided in the consolidated statements of operations is as follows:

	Years Ended December 31,
	2020			2019
Statutory rate		21.0	%		21.0	%
State income taxes, net of federal benefit		5.7			5.7
Change in valuation allowance		(9.4	)		(22.4	)
Fair value adjustments		(12.7	)		—
Noncontrolling interest		(3.4	)		(3.3	)
Non-deductible items		(0.4	)		(0.1	)
Other		(0.8	)		(1.0	)
Effective rate		(0.0	)%		(0.1	)%

Deferred income taxes are provided using the asset and liability method to reflect temporary differences between the financial statement carrying amounts and the tax bases of assets and liabilities using presently enacted tax rates and laws. The components of deferred income taxes included in the consolidated balance sheets were as follows (in thousands):

	December 31,
	2020			2019
Deferred tax assets:
Net operating loss carryforwards	$	61,208		$	61,775
Capital loss		29,684			—
Disallowed interest		6,255			8,242
R&D, Energy and AMT credits		3,864			3,864
Pension liability		3,235			2,979
Railcar contracts		302			379
Stock-based compensation		441			551
Allowance for doubtful accounts and other assets		461			578
Property and equipment		—			3,325
Other		1,963			3,458
Total deferred tax assets		107,413			85,151
Deferred tax liabilities:
Property and equipment		(16,243	)		—
Intangibles		(749	)		(749	)
Derivatives		(4,497	)		(153	)
Other		(472	)		(437	)
Total deferred tax liabilities		(21,961	)		(1,339	)
Valuation allowance		(85,688	)		(84,065	)
Net deferred tax liabilities, included in other liabilities	$	(236	)	$	(253	)

A portion of the Company’s net operating loss carryforwards are subject to provisions of the tax law that limit the use of losses incurred by a corporation prior to the date certain ownership changes occur. These limitations also apply to certain depreciation deductions associated with assets on hand at the time of the ownership change and otherwise allowable during the five-year period following the ownership change. As the five-year limitation period lapsed in 2019, these disallowed deductions are reflected in property and equipment in the schedule above but continue to be subject to the annual limitation that applies to the pre-change net operating losses. Due to the limitation on the use of net operating losses and depreciation deductions, a significant portion of these carryforwards will expire regardless of whether the Company generates future taxable income. After reducing these net operating loss carryforwards for the amount which will expire due to this limitation, the Company had remaining federal net operating loss carryforwards of approximately $227,817,000 and state net operating loss carryforwards of approximately $211,680,000 at December 31, 2020. These net operating loss carryforwards expire as follows (in thousands):

Tax Years	Federal		State
2021–2025	$	4,103	$	—
2026–2030		9,678		56,174
2031–2035		106,886		57,567
2036 and after*		107,150		97,940
Total NOLs	$	227,817	$	211,681

* Includes indefinite life federal net operating losses of $77.5 million generated after 2017.

Certain of these net operating losses are not immediately available, but become available to be utilized in each of the years ended December 31, as follows (in thousands):

Year	Federal		State
2021	$	152,026	$	135,458
2022		6,308		5,318
2023		6,308		5,318
2024		6,308		5,135
2025		6,308		5,089
Beyond 2025		50,559		55,363
Total	$	227,817	$	211,681

To the extent amounts are not utilized in any year, they may be carried forward to the next year until expiration. These amounts may change if there are future additional limitations on their utilization.

Federal capital loss of $113,928,000 may be carried forward for 5 years and will expire in 2025. State capital loss of $110,279,000 may be carried forward for 5 years for most of the states in which the Company files returns and will expire in 2025.

In assessing whether the deferred tax assets are realizable, a more likely than not standard is applied. If it is determined that it is more likely than not that deferred tax assets will not be realized, a valuation allowance must be established against the deferred tax assets. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which the associated temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment.

A valuation allowance was established in the amount of $85,688,000 and $84,065,000 as of December 31, 2020 and 2019, respectively, based on the Company’s assessment of the future realizability of certain deferred tax assets. The valuation allowance on deferred tax assets is related to future deductible temporary differences and net operating loss carryforwards for which the Company has concluded it is more likely than not that these items will not be realized in the ordinary course of operations.

For the year ended December 31, 2020, the Company recorded an increase in valuation allowance of $1,623,000. This was primarily the offsetting impact of an increase in deferred tax assets associated with the capital loss carryforward offset by changes in depreciation and other adjustments associated with property plant and equipment, and mark-to-market adjustment related to derivatives in 2020. For the year ended December 31, 2019, the Company recorded an increase in the valuation allowance of $43,477,000. Of this increase, $22,641,000 was primarily the offsetting impact of an increase in deferred tax assets associated with additional net operating losses in 2019. The remaining increase of $20,836,000 relates to a deferred asset related to previously disallowed depreciation discussed above.

The Company is subject to income tax in the United States federal jurisdiction and various state jurisdictions and has identified its federal tax return and tax returns in state jurisdictions below as “major” tax filings. These jurisdictions, along with the years still open to audit under the applicable statutes of limitation, are as follows:

Jurisdiction	Tax Years
Federal	2017 – 2019
Alabama	2017 – 2019
Arizona	2016 – 2019
Arkansas	2017 – 2019
California	2016 – 2019
Colorado	2015 – 2019
Connecticut	2017 – 2019
Georgia	2017 – 2019
Idaho	2017 – 2019
Illinois	2017 – 2019
Indiana	2017 – 2019
Iowa	2017 – 2019
Kansas	2017 – 2019
Louisiana	2017 – 2019
Michigan	2017 – 2019
Minnesota	2017 – 2019
Mississippi	2017 – 2019
Missouri	2017 – 2019
Nebraska	2017 – 2019
New Mexico	2017 – 2019
Oklahoma	2017 – 2019
Oregon	2017 – 2019
Pennsylvania	2017 – 2019
Rhode Island	2017 – 2019
South Carolina	2017 – 2019
Tennessee	2017 – 2019
Texas	2016 – 2019

However, because the Company had net operating losses and credits carried forward in several of the jurisdictions, including the United States federal and California jurisdictions, certain items attributable to closed tax years are still subject to adjustment by applicable taxing authorities through an adjustment to tax attributes carried forward to open years.