Gulf Island Fabrication, Inc. Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

INCOME TAXES

INCOME TAXES

12 Months Ended

Dec. 31, 2013

7. INCOME TAXES

Significant components of the Company’s deferred tax assets and liabilities as of December 31 were as follows (in thousands):


	2013		2012
Deferred tax liabilities:
Property, plant and equipment	$	38,397	$	37,721

Total deferred tax liabilities:		38,397		37,721
Deferred tax assets:
Employee benefits		677		588
Uncompleted contracts		931		3,472
Stock based compensation expense		65		126
Allowance for uncollectible accounts		311		5,107
Federal net operating loss		7,584		3,608
Other		359		138

Total deferred tax assets:		9,927		13,039

Net deferred tax liabilities:	$	28,470	$	24,682

Our federal net operating losses can be carried forward twenty years. For the year ending December 31, 2013 we expect our net operating loss to increase. We utilized $17.1 million for the year ended December 31, 2012 and expect to utilize the remaining $21.8 million of this federal net operating loss in 2014.

Significant components of income tax expense for the years ended December 31 were as follows (in thousands):


	2013		2012			2011
Current:
Federal	$	—	$	—		$	—
State		254		534			239

Total current		254		534			239

Deferred:
Federal		4,049		(1,749	)		(828	)
State		—		(99	)		(55	)

Total deferred		4,049		(1,848	)		(883	)

Income taxes	$	4,303	$	(1,314	)	$	(644	)

A reconciliation of income taxes computed at the U.S. federal statutory tax rate to the Company’s income tax expense for the years ended December 31 is as follows (in thousands):


	2013			%			2012			%			2011			%
U.S. statutory rate	$	4,037			35.0	%	$	(1,892	)		35.0	%	$	(857	)		35.0	%
Increase (decrease) resulting from:
State income taxes		317			2.7			783			(14.5	)		289			(11.8	)
Qualified Production Activities
Income—Deduction		—			—			—			—			—			—
Federal Work Opportunity Tax Credit		—			—			—			—			—			—
Other		(51	)		(0.4	)		(205	)		3.8			(76	)		3.1

Income tax expense	$	4,303			37.30	%	$	(1,314	)		24.3	%	$	(644	)		26.3	%

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

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