Note 11 - Income Taxes

12 Months Ended

Dec. 31, 2014

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,
	2014			2013			2012
	(Dollars in thousands)
Current (provision) benefit for income taxes:
Federal	$	(28,942	)	$	11,766		$	(766	)
State		(6,159	)		(1,880	)		—
		(35,101	)		9,886			(766	)
Deferred (provision) benefit for income taxes:
Federal		(84,704	)		(56,752	)		338,500
State		(14,294	)		(22,117	)		115,500
		(98,998	)		(78,869	)		454,000
(Provision) benefit for income taxes	$	(134,099	)	$	(68,983	)	$	453,234

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

	December 31,
	2014			2013
	(Dollars in thousands)
Inventory valuation adjustments	$	84,443		$	114,063
Financial accruals		39,653			42,450
Federal net operating loss carryforwards		102,971			161,265
State net operating loss carryforwards		40,731			48,901
Tax credit carryforwards		4,428			4,445
Goodwill impairment charges		7,150			8,566
Other, net		(413	)		301
Total deferred tax asset		278,963			379,991
Less: Valuation allowance		(2,561	)		(4,591	)
Net deferred tax asset	$	276,402		$	375,400

Each quarter we assess our deferred tax asset to determine whether all or any portion of the asset is more likely than not unrealizable under ASC 740. We are required to establish a valuation allowance for any portion of the asset we conclude is more likely than not to be unrealizable. Our assessment considers, among other things, the nature, frequency and severity of our prior and cumulative losses, forecasts of our future taxable income, the duration of statutory carryforward periods, our utilization experience with operating loss and tax credit carryforwards, and tax planning alternatives.

As of December 31, 2014, we had a $279.0 million deferred tax asset which was partially offset by a deferred tax asset valuation allowance of $2.6 million related to state net operating loss carryforwards that are limited by shorter carryforward periods. In addition, as of such date, $119.0 million (or approximately $294.2 million and $278.7 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 Internal Revenue Code Section 382 (“Section 382”) gross annual deduction limitation of $15.6 million for both federal and state purposes. The remaining $24.7 million represents state net operating loss carryfowards that are not limited by Section 382. Our gross federal and state net operating loss carryforwards of approximately $294 million and $743 million, respectively, if unused, will begin to expire in 2028 and 2015, 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, 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 was subject to the Section 382 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) was not limited by Section 382. The remaining deferred tax asset represented deductible timing differences, primarily related to inventory impairments and financial accruals, which have no expiration date.

Our 2014 provision for income taxes was $134.1 million related primarily to our $350.0 million of pretax income. The effective tax rate differs from the federal statutory rate of 35% due to the following items:

	Year Ended December 31,
	2014			2013			2012
	(Dollars in thousands)
Income before taxes	$	349,964		$	257,698		$	78,187
(Provision) benefit for income taxes at federal statutory rate	$	(122,488	)	$	(90,194	)	$	(27,365	)
(Increases) decreases in tax resulting from:
State income taxes, net of federal benefit		(12,961	)		(9,426	)		(2,947	)
Net deferred tax asset valuation (allowance) benefit		2,030			13,115			483,724
(Increases) decreases in liability for unrecognized tax benefits		(1,605	)		16,105			—
Domestic production activities deduction		1,562			—			—
Other, net		(637	)		1,417			(178	)
(Provision) benefit for income taxes	$	(134,099	)	$	(68,983	)	$	453,234
Effective tax rate		38.3	%		26.8	%		—

As of December 31, 2014, our liability for unrecognized tax benefits was $2.5 million, of which $1.6 million, if recognized, would affect our effective tax rate. Our liabilities for unrecognized tax benefits are included in accrued liabilities on the accompanying consolidated balance sheets. We classify estimated interest expense and penalties related to unrecognized tax benefits in our provision for income taxes. As of December 31, 2014, accrued interest and penalties related to unrecognized tax benefits was $0.3 million, all of which was recorded during 2014. A reconciliation of the beginning and ending amount of gross unrecognized tax benefits, excluding accrued interest, is as follows:

	Year Ended December 31,
	2014		2013
	(Dollars in thousands)
Balance, beginning of the year	$	472	$	13,484
Changes based on tax positions related to the current year		1,567		472
Changes for tax position in prior years		497		—
Reductions due to lapse of statute of limitations		—		(13,484	)
Settlements		—		—
Balance, end of the year	$	2,536	$	472

We do not expect a significant change in the liability for unrecognized tax benefits during the next twelve months. In addition, as of December 31, 2014, we remained subject to examination by various tax jurisdictions for the tax years ended December 31, 2009 through 2014.