6.	Income Taxes

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax liabilities and assets are as follows:

	December 31,
	2013		2012
	(In thousands)

Deferred tax liabilities:
Property and equipment	$	8,235	$	9,205
Intangible assets		14,425		10,437
Prepaid expenses		601		616
Total deferred tax liabilities		23,261		20,258
Deferred tax assets:
Allowance for doubtful accounts		232		233
Compensation		3,355		3,195
Other accrued liabilities		128		76
Loss carry forwards		7		58
		3,722		3,562
Less: valuation allowance		7		58
Total net deferred tax assets		3,715		3,504
Net deferred tax liabilities	$	19,546	$	16,754
Current portion of deferred tax assets	$	1,025	$	892
Non-current portion of deferred tax liabilities		(20,571)		(17,646)
Net deferred tax liabilities	$	(19,546)	$	(16,754)

At December 31, 2013, we have state and local tax loss carry forwards of approximately $162,000, which will expire in 2023. During 2013, we utilized approximately $790,000 in state and local tax loss carry forwards, approximately $381,000 in state and local tax loss carry forwards expired and accordingly, the valuation allowances decreased by $51,000. At December 31, 2013, the valuation allowance for net deferred tax assets relates to state loss carry forwards. Deferred tax assets are required to be reduced by a valuation allowance if it is more likely than not that some portion or all of the deferred tax asset will not be realized.

At December 31, 2013 and 2012, net deferred tax liabilities include a deferred tax asset of $2,089,000 and $1,199,000, respectively, relating to deferred compensation and stock-based compensation expense. Full realization of the tax asset related to stock based compensation requires stock options to be exercised at a price equaling or exceeding the sum of the grant price plus the fair value of the option at the grant date and restricted stock to vest at a price equaling or exceeding the fair market value at the grant date. Accounting guidance, however, does not allow a valuation allowance to be recorded unless the company’s future taxable income is expected to be insufficient to recover the asset. Accordingly, there can be no assurance that the price of the Company’s common stock will increase to levels sufficient to realize the entire tax benefit currently reflected in the balance sheets at December 31, 2013 and 2012. See Note 7 — Stock-Based Compensation for further discussion of stock-based compensation expense.

The significant components of the provision for income taxes are as follows:

	Years Ended December 31,
	2013		2012		2011
	(In thousands)

Current:
Federal	$	6,210	$	6,160	$	1,820
State		1,125		1,150		510
Total current		7,335		7,310		2,330
Total deferred		2,805		4,540		6,100
	$	10,140	$	11,850	$	8,430
Taxes are allocated as follows:
Continuing operations	$	9,992	$	11,939	$	8,604
Discontinued operations		148		(89)		(174)
	$	10,140	$	11,850	$	8,430

In addition, we recognized a tax benefit of $9,200 and tax expense of $25,000 and $0 as a result of stock option exercises for the difference between compensation expense for financial statement and income tax purposes for the years ended December 31, 2013, 2012 and 2011, respectively.

The reconciliation of income tax at the U.S. federal statutory tax rates to income tax expense (benefit) is as follows:

	Years Ended December 31,
	2013		2012		2011
	(In thousands)

Tax expense at U.S. statutory rates	$	8,894	$	10,486	$	7,260
State tax expense, net of federal benefit		1,192		1,356		1,116
Other, net		105		42		69
Change in valuation allowance on loss carry forwards		(51)		(34)		(15)
	$	10,140	$	11,850	$	8,430
Discontinued operations		148		89		174
	$	9,992	$	11,939	$	8,604

The Company files income taxes in the U.S. federal jurisdiction, and in various state and local jurisdictions. The Company is no longer subject to U.S. federal examinations by the Internal Revenue Service (IRS) for years prior to 2008. During the first quarter of 2012, the IRS commenced an examination of the Company’s 2010 U.S. federal income tax return which was completed in the third quarter of 2012 and resulted in no changes to the return. The Company is subject to examination for income and non-income tax filings in various states.

Included in the balance sheet at December 31, 2012 are tax accruals of approximately $16,000 for uncertain tax positions. Recognition of any of the related unrecognized tax benefits would affect the Company’s effective tax rate. As of December 31, 2013 there were no accrued balances recorded related to uncertain tax positions.

We classify income tax-related interest and penalties as interest expense and corporate general and administrative expense, respectively. For the years ended December 31, 2013 and 2012, we had no tax-related interest or penalties and had $0 accrued at December 31, 2013 and 2012.

In March 2012, the Compensation Committee recommended, and the Board approved, a $350,000 discretionary bonus to the CEO for the year ended December 31, 2011. As a result of the CEO’s total gross compensation, approximately $177,000 was nondeductible pursuant to Section 162(m) of the Internal Revenue Code of 1986, as amended.