Annual report pursuant to section 13 and 15(d)

INCOME TAXES (Tables)

INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2013

The provision for income taxes consisted of the following:

	Year ended December 31,
	2013			2012		2011
	(thousands of dollars)
Current federal provision	$	6,748		$	4,821	$	3,072
Current state provision		233			199		191

Deferred federal provision		1,173			882		3,237
Deferred state provision (benefit)		(7	)		2		5

Income tax expense	$	8,147		$	5,904	$	6,505

Difference Between Effective Tax Rate In Income Tax Expense And Federal Statutory Rate

The difference between the effective tax rate in income tax expense and the Federal statutory rate of 35% for the years ended December 31, 2013 and 2012, and 34% for the year ended December 31, 2011, is as follows:

	2013			2012			2011
	(thousands of dollars)
Income taxes at U.S. statutory rate	$	9,675		$	5,679		$	6,933
State taxes, net of federal benefit		139			132			127
Permanent and other items		(644	)		(250	)		(567	)
Increase (decrease) in valuation allowance		(1,023	)		343			12
Total tax expense	$	8,147		$	5,904		$	6,505

Tax Effects Of Temporary Differences That Give Rise To Significant Portions Of Federal And State Deferred Tax Assets And Deferred Tax Liabilities

Tax effects of temporary differences that give rise to significant portions of federal and state deferred tax assets and deferred tax liabilities were as follows:

	December 31,
	2013			2012
	(thousands of dollars)
Deferred tax liabilities:
Plant, pipeline and equipment	$	(8,507	)	$	(8,260	)
Contractual based asset		(43	)		(124	)
Investment in AMAK		( 4,757	)		( 1,712	)
Total deferred tax liabilities	$	(13,307	)	$	(10,096	)

Deferred tax assets:
Accounts receivable		260			201
Inventory		131			95
Mineral interests		376			376
Unrealized loss on interest rate swap		214			313
Environmental		71			123
Post-retirement benefits		373			370

Stock-based compensation		1,015			716
Deferred revenue		654			332
Gross deferred tax assets		3,094			2,526
Valuation allowance		(447	)		(1,470	)
Total net deferred tax assets	$	2,647		$	1,056
Net deferred tax liabilities	$	(10,660	)	$	(9,040	)

Current And Non-Current Classifications Of Deferred Tax Balances

The current and non-current classifications of the deferred tax balances are as follows:

	2013			2012
	(thousands of dollars)
Current:
Deferred tax asset	$	1,324		$	1,054

Non-current:

Deferred tax assets		1,764			2,434
Deferred tax liability		(13,301	)		(11,058	)
Valuation allowance		(447	)		(1,470	)
Non-current deferred tax liability, net		(11,984	)		(10,094	)

Total deferred liabilities, net	$	(10,660	)	$	(9,040	)