Annual report pursuant to Section 13 and 15(d)

INCOME TAXES (Tables)

INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2016

The provision for income taxes consisted of the following:

	Year ended December 31,
	2016		2015		2014
	(thousands of dollars)
Current federal provision	$	1,691	$	4,062	$	8,756
Current state provision		18		285		296

Deferred federal provision (benefit)		8,645		5,367		(1,893	)
Deferred state provision (benefit)		150		50		(12	)

Income tax expense	$	10,504	$	9,764	$	7,147

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, 2016, 2015, and 2014, is as follows:

	2016			2015			2014
	(thousands of dollars)
Income taxes at U.S. statutory rate	$	10,476		$	9,927		$	7,952
State taxes, net of federal benefit		285			230			181
Permanent and other items		(257	)		(393	)		(915	)
Increase (decrease) in valuation allowance		-			-			(71	)
Total tax expense	$	10,504		$	9,764		$	7,147

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,
	2016			2015
	(thousands of dollars)
Deferred tax liabilities:
Plant, pipeline and equipment	$	(22,598	)	$	(14,996	)
Intangible assets		(786	)		(284	)
Other assets		(10	)		(14	)
Investment in AMAK		(3,109	)		( 2,522	)
Total deferred tax liabilities	$	(26,503	)	$	(17,816	)

Deferred tax assets:
Accounts receivable		322			283
Inventory		1,283			1,785
Mineral interests		376			376
Unrealized loss on swap agreements		20			62
Post-retirement benefits		423			330
Stock-based compensation		1,372			969
Intangible assets		-			-
Deferred revenue		-			-
Gross deferred tax assets		3,796			3,805
Valuation allowance		(376	)		(376	)
Total net deferred tax assets	$	3,420		$	3,429
Net deferred tax liabilities	$	(23,083	)	$	(14,387	)

Current and Non-Current Classifications of Deferred Tax Balances

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

	2016			2015
	(thousands of dollars)
Current:
Deferred tax asset	$	1,615		$	2,116
Non-current:
Deferred tax assets		6,124			4,637
Deferred tax liability		(30,446	)		(20,764	)
Valuation allowance		(376	)		(376	)
Non-current deferred tax liability, net		(24,698	)		(16,503	)

Total deferred liabilities, net	$	(23,083	)	$	(14,387	)