Annual report pursuant to Section 13 and 15(d)

Income Taxes

v3.8.0.1
Income Taxes
12 Months Ended
Dec. 31, 2017
Income Tax Disclosure [Abstract]  
Income Taxes
Note 4. Income Taxes

The Tax Cuts and Jobs Act (the "Tax Act") was enacted on December 22, 2017. The Tax Act reduces the U.S. federal corporate income tax rate from 35% to 21% and makes several other changes to long-held tax rules. We have not completed our accounting for the tax effects of the Tax Act; however, we have made a reasonable estimate of the effects of the Tax Act on our deferred tax balances and have remeasured them based upon the rates at which they are expected to reverse in the future. We have recognized a provisional income tax benefit of $104.9 million in our provision for income taxes in the current year ended December 31, 2017. We will continue to refine our estimates related to the Tax Act as clarifying guidance and interpretations are issued and our 2017 tax returns are completed.

The components of the provision for income taxes are as follows:
 
 
Year Ended December 31,
(In thousands)
 
2017
 
2016
 
2015
Current:
 
 
 
 
 
 
Federal
 
$
169,053

 
$
126,903

 
$
120,437

State
 
25,644

 
20,111

 
21,248

 
 
194,697

 
147,014

 
141,685

Deferred:
 
 
 
 
 
 
Federal
 
(81,551
)
 
29,354

 
38,549

State
 
(1,088
)
 
5,454

 
5,093

 
 
(82,639
)
 
34,808

 
43,642

Total provision for income taxes
 
$
112,058

 
$
181,822

 
$
185,327



The following is a reconciliation of income tax expense calculated using the U.S. statutory federal income tax rate with our income tax expense for 2017, 2016 and 2015:
 
 
Year Ended December 31,
(In thousands)
 
2017
 
2016
 
2015
Tax provision at statutory rate
 
$
201,541

 
$
167,156

 
$
171,506

State income taxes, net of federal benefit
 
20,277

 
16,711

 
17,097

Revaluation of deferred taxes in connection with the Tax Act
 
(104,864
)
 

 

Other, net
 
(4,896
)
 
(2,045
)
 
(3,276
)
Total provision for income taxes
 
$
112,058

 
$
181,822

 
$
185,327



Deferred tax assets and liabilities, which are included in "Other assets" and "Deferred income taxes" on our Balance Sheets, consist of the following:
 
 
December 31,
(In thousands)
 
2017
 
2016
Deferred tax assets:
 
 
 
 
Claims and insurance reserves
 
$
29,008

 
$
43,409

Accrued vacation
 
17,832

 
24,227

Deferred compensation
 
29,220

 
40,742

Other
 
15,157

 
11,593

Total deferred tax assets
 
91,217

 
119,971

 
 
 
 
 
Deferred tax liabilities:
 
 
 
 
Depreciation and amortization
 
(266,730
)
 
(376,034
)
Unrecognized revenue
 
(10,007
)
 
(11,465
)
Other
 
(1,703
)
 
(2,334
)
Total deferred tax liabilities
 
(278,440
)
 
(389,833
)
Net deferred tax liability
 
$
(187,223
)
 
$
(269,862
)


As of December 31, 2017, the Company had various state tax credit carryforwards of approximately $4.2 million that are scheduled to expire in one to 14 years.

We are subject to U.S. federal income tax, as well as income tax of multiple state tax jurisdictions. We remain open to examination by the Internal Revenue Service for tax years 2012 through 2017. We also remain open to examination by various state tax jurisdictions for tax years 2012 through 2017.

The Company's liability for unrecognized tax benefits was immaterial as of December 31, 2017 and 2016. Interest and penalties related to uncertain tax positions, which are immaterial, are recorded in our "Provision for income taxes" on our Statements of Operations. Changes in our liability for unrecognized tax benefits could affect our effective tax rate, if recognized, but we do not expect any material changes within the next twelve months.