Note 11 - Income Taxes

12 Months Ended

Dec. 31, 2013

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

11. Income Taxes

The (provision) benefit for income taxes includes the following components:

	Year Ended December 31,
	2013			2012			2011
	(Dollars in thousands)
Current (provision) benefit for income taxes:
Federal	$	11,766		$	(766	)	$	(130	)
State		(1,880	)		—			186
		9,886			(766	)		56
Deferred (provision) benefit for income taxes:
Federal		(56,752	)		338,500			—
State		(22,117	)		115,500			—
		(78,869	)		454,000			—
(Provision) benefit for income taxes	$	(68,983	)	$	453,234		$	56

The components of our net deferred income tax asset are as follows:

	December 31,
	2013			2012
	(Dollars in thousands)
Inventory valuation adjustments	$	114,063		$	136,239
Financial accruals		43,478			39,482
Federal net operating loss carryforwards		161,265			230,220
State net operating loss carryforwards		48,901			60,742
Tax credit carryforwards		4,445			—
Goodwill impairment charges		8,566			11,019
Other, net		(727	)		366
Total deferred tax asset		379,991			478,068
Less: Valuation allowance		(4,591	)		(22,696	)
Net deferred tax asset	$	375,400		$	455,372

Each quarter we assess our deferred tax asset to determine whether all or any portion of the asset is more likely than not unrealizable in accordance with ASC 740. ASC 740 requires an assessment of available positive and negative evidence and, if the available positive evidence outweighs the available negative evidence, such that we are able to conclude that it is more likely than not (likelihood of more than 50%) that our deferred tax asset will be realized, we are required to reverse any corresponding deferred tax asset valuation allowance.

As of December 31, 2013, we had a $380.0 million deferred tax asset which was partially offset by a deferred tax asset valuation allowance of $4.6 million related to state net operating loss carryforwards that are limited by shorter carryforward periods. In addition, as of such date, $125.5 million (or approximately $310 million and $297 million, respectively, of federal and state net operating loss carryforwards on a gross basis) of our deferred tax asset related to net operating loss carryforwards is subject to the $15.6 million gross annual deduction limitation for both federal and state purposes. The remaining $84.7 million (or approximately $165 million and $598 million, respectively, of federal and state net operating loss carryforwards on a gross basis) is not currently limited by Internal Revenue Code Section 382 (“Section 382”). Our gross federal and state net operating loss carryforwards of approximately $475 million and $895 million, respectively, if unused, will begin to expire in 2028 and 2014, respectively. The remaining deferred tax asset represented deductible timing differences, primarily related to inventory impairments and financial accruals, which have no expiration date.

As of December 31, 2012, we had a $478.1 million deferred tax asset which was partially offset by a deferred tax asset valuation allowance of $22.7 million. During the 2012 fourth quarter, based on an evaluation of available positive and negative information and our projection of the income we expected to generate in future years, we concluded that it was more likely than not that most of our deferred tax asset would be realized. As a result, in accordance with ASC 740, we recognized a $453.2 million income tax benefit that resulted from the reversal of all but $22.7 million of our deferred tax asset valuation allowance. Of the remaining valuation allowance as of December 31, 2012, $12.2 million related primarily to potential Section 382 limitations that expired during June 2013 (and as a result this portion of our deferred tax asset valuation allowance was reversed as of June 30, 2013), and $10.5 million related to net operating loss carryforwards in certain states that are limited by shorter carryforward periods. During the 2013 fourth quarter, we recorded a $5.9 million reduction of the valuation allowance related to state net operating loss carryforwards, $1.0 million of which represented an income tax benefit related to state net operating loss carryforwards that we utilized during 2013, and as a result, we concluded were more likely than not realizable, and $4.9 million of which represented a corresponding reduction of the deferred tax asset related to state net operating loss carryforwards that expired without being utilized.

Our 2013 provision for income taxes was $69.0 million, which represented income tax expense of $99.6 million related to our $257.7 million of pretax income, offset by the aggregate income tax benefit of $30.6 million we recognized during the year (comprised primarily of $12.2 million related to the reversal of our deferred tax asset valuation allowance attributable to the expiration of Section 382 limitations, $16.1 million related to the reversal of our liability and related accrued interest for unrecognized tax benefits due to the expiration of the applicable statute of limitations and $1.0 million related to the reversal of our deferred tax asset valuation allowance attributable to state net operating loss carryforwards that we utilized during 2013). The effective tax rate differs from the federal statutory rate of 35% due to the following items:

	Year Ended December 31,
	2013			2012			2011
	(Dollars in thousands)
Income (loss) before taxes	$	257,698		$	78,187		$	(16,473	)
(Provision) benefit for income taxes at federal statutory rate	$	(90,194	)	$	(27,365	)	$	5,765
(Increases) decreases in tax resulting from:
State income taxes, net of federal benefit		(9,426	)		(2,947	)		615
Net deferred tax asset valuation (allowance) benefit		13,115			483,724			(6,415	)
Reversal of liability for unrecognized tax benefits		16,105			—			—
Other, net		1,417			(178	)		91
Benefit (provision) for income taxes	$	(68,983	)	$	453,234		$	56
Effective tax rate		26.8	%		—			0.3	%

During the year ended December 31, 2013, we reversed our liability and related accrued interest for unrecognized tax benefits due to the expiration of the applicable statute of limitations. As of December 31, 2013, we remained subject to examination by various tax jurisdictions for the tax years ended December 31, 2008 through 2012. A reconciliation of the beginning and ending amount of gross unrecognized tax benefits, excluding accrued interest, is as follows:

	Year Ended December 31,
	2013			2012
	(Dollars in thousands)
Balance, beginning of the year	$	13,484		$	13,484
Changes based on tax positions related to the current year		—			—
Changes for tax position in prior years		—			—
Reductions due to lapse of statute of limitations		(13,484	)		—
Settlements		—			—
Balance, end of the year	$	—		$	13,484

We do not expect a significant increase in the liability for unrecognized tax benefits during the next twelve months.