Note 5 - Income Taxes

12 Months Ended

Dec. 31, 2015

5. Income Taxes

The components of the provision for income taxes consisted of the following:

(In thousands)	201 5		2014		2013
Current:
Federal	$	9,280	$	10,402	$	15,964
State		946		2,015		1,889
		10,226		12,417		17,853

Deferred:
Federal		13,042		8,648		3,909
State		1,678		774		394
		14,720		9,422		4,303
Total provision	$	24,946	$	21,839	$	22,156

The statutory federal income tax rate is reconciled to the effective income tax rate as follows:

	2015			2014			2013
Statutory federal income tax rate		35	%		35	%		35	%
Per diem and other non-deductible expenses		3			4			4
Increase in taxes arising from state income taxes, net of federal income tax benefit		3			3			3
Effective tax rate		41	%		42	%		42	%

As of December 31, the net deferred tax liability consisted of the following:

(In thousands)	201 5		2014
Deferred tax assets:
Reserves and accrued liabilities	$	7,219	$	6,049
Other		2,721		2,847
		9,940		8,896
Deferred tax liabilities:
Depreciation		141,255		125,697
Prepaid expenses		3,049		2,843
		144,304		128,540
Net deferred tax liability	$	134,364	$	119,644

We have not provided a valuation allowance against deferred tax assets at December 31, 2015 or 2014. We believe the deferred tax assets will be realized principally through future reversals of existing taxable temporary differences (deferred tax liabilities) and future taxable income.

Our reserves for unrecognized tax benefits were $683,000 as of December 31, 2015 and $562,000 as of December 31, 2014. The $121,000 increase in the amount reserved in 2015 relates to current period tax positions offset by the removal of the reserve relating to 2010 tax positions. The amount reserved as of December 31, 2014 was added in 2010 through 2014 relating to current period tax positions. If recognized, $470,000 of the unrecognized tax benefits as of December 31, 2015 would impact our effective tax rate. Potential interest and penalties related to unrecognized tax benefits of $91,000 were recognized in our financial statements as of December 31, 2015, and of $72,000 were recorded as of December 31, 2014. We do not expect the reserves for unrecognized tax benefits to change significantly within the next twelve months.

The federal statute of limitations remains open for 2012 and forward. We file tax returns in numerous state jurisdictions with varying statutes of limitations.