Income Taxes

12 Months Ended

Dec. 31, 2021

Income Tax Disclosure [Abstract]

INCOME TAXES

10. INCOME TAXES.

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

	Years Ended December 31,
	2021		2020			2019
Current provision (benefit)	$	1,469	$	—		$	(22	)
Deferred provision (benefit)		—		(17	)		2
Total	$	1,469	$	(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,
	2021			2020			2019
Statutory rate		21.0	%		21.0	%		21.0	%
State income taxes, net of federal benefit		6.0			5.7			5.7
Change in valuation allowance		(18.8	)		(9.4	)		(22.4	)
Income from loan forgiveness		(5.5	)		—			—
Fair value adjustments		—			(12.7	)		—
Noncontrolling interest		—			(3.4	)		(3.3	)
Non-deductible items		0.4			(0.4	)		(0.1	)
Other		(0.1	)		(0.8	)		(1.0	)
Effective rate		3.0	%		(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,
	2021			2020
Deferred tax assets:
Net operating loss carryforwards	$	46,159		$	61,208
Capital loss		28,640			29,684
Disallowed interest		1,059			6,255
R&D, Energy and AMT credits		3,742			3,864
Pension liability		2,189			3,235
Railcar contracts		618			302
Stock-based compensation		479			441
Allowance for doubtful accounts and other assets		367			461
Other		2,646			1,963
Total deferred tax assets		85,899			107,413
Deferred tax liabilities:
Property and equipment		(8,896	)		(16,243	)
Intangibles		(749	)		(749	)
Derivatives		(606	)		(4,497	)
Other		(300	)		(472	)
Total deferred tax liabilities		(10,551	)		(21,961	)
Valuation allowance		(75,584	)		(85,688	)
Net deferred tax liabilities, included in other liabilities	$	(236	)	$	(236	)

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 $168,720,000 and state net operating loss carryforwards of approximately $173,825,000 at December 31, 2021. These net operating loss carryforwards expire as follows (in thousands):

Tax Years	Federal		State
2022–2026	$	3,831	$	3,374
2027–2031		16,289		76,288
2032–2036		55,671		24,796
2037 and after*		92,929		69,367
Total NOLs	$	168,720	$	173,825

* Includes indefinite life federal net operating losses of $80.7 million generated after 2017.

Approximately $99,236,000 is available to utilize against federal taxable income for 2022.

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 $107,699,000 may be carried forward for 5 years and will expire in 2025. State capital loss of $103,098,000 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 $75,584,000 and $85,688,000 as of December 31, 2021 and 2020, 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, 2021, the Company recorded a decrease in valuation allowance of $10,104,000. This was primarily related to utilization of net operating losses as the Company generated taxable income for the year. 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 adjustments 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	2018 – 2020
Alabama	2018 – 2020
Arizona	2017 – 2020
Arkansas	2018 – 2020
California	2017 – 2020
Colorado	2017 – 2020
Connecticut	2018 – 2020
Georgia	2018 – 2020
Idaho	2018 – 2020
Illinois	2018 – 2020
Indiana	2018 – 2020
Iowa	2018 – 2020
Kansas	2018 – 2020
Louisiana	2018 – 2020
Michigan	2018 – 2020
Minnesota	2018 – 2020
Mississippi	2018 – 2020
Missouri	2018 – 2020
Nebraska	2018 – 2020
New Mexico	2018 – 2020
Oklahoma	2018 – 2020
Oregon	2018 – 2020
Pennsylvania	2018 – 2020
Rhode Island	2018 – 2020
South Carolina	2018 – 2020
Tennessee	2018 – 2020
Texas	2017 – 2020

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.