Income Taxes

The Company’s corporate organizational structure requires the filing of two separate consolidated U.S. Federal income tax returns. Taxable income of one group cannot be offset by tax attributes, including net operating losses, of the other group.

A reconciliation of the effective tax rate to the U.S. federal statutory tax rate is as follows:



	Three months ended March 31,
	2014		2013
Federal statutory tax rate	35.0	%	35.0	%
State income taxes, net of federal benefit	2.3		2.6
Change in valuation allowance	—		(0.1	)
Domestic production activities deduction	(2.7	)	(2.4	)
Other	0.1		0.2
Effective income tax rate	34.7	%	35.3	%

Fluctuations in effective tax rates were historically impacted by permanent tax differences with no associated income tax impact and existing deferred tax asset valuation allowances.

Deferred taxes are presented in the balance sheets as follows (in thousands):



	March 31, 2014			December 31, 2013
Current deferred tax assets	$	2,500		$	2,522
Non-current deferred tax assets	15,100			15,012
Non-current deferred tax liabilities	(27,351		)	(27,575		)
Net deferred tax assets (liabilities)	$	(9,751	)	$	(10,041	)