CHS 2014 Annual Report Download - page 45

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Our foreign tax credit of $5.6 million will expire on tax provision is required to meet before being recognized in
August 31, 2019 and our alternative minimum tax credit our consolidated financial statements. This interpretation
of $5.6 million will not expire. Our general business requires us to recognize in our consolidated financial state-
credits of $18.5 million, comprised primarily of low sulfur ments tax positions determined more likely than not to be
diesel credits, will begin to expire on August 31, 2026. sustained upon examination, based on the technical merits
of the position. Reconciliation of the gross beginning and
As of August 31, 2014, deferred tax assets of $86.5 mil- ending amounts of unrecognized tax benefits for the
lion and $2.6 million were included in other current periods presented follows:
assets and other assets, respectively. As of August 31,
(DOLLARS IN THOUSANDS) 2014 2013 2012
2013, net deferred tax assets of $39.3 million were
Balance at beginning of period $ 67,271 $ 67,271 $ 67,271
included in other current assets.
Additions attributable to prior
year tax positions 35,718 — —
The reconciliation of the statutory federal income tax
Reductions attributable to prior
rates to the effective tax rates for the years ended
year tax positions (9,867) — —
August 31, 2014, 2013 and 2012 is as follows:
Reductions attributable to
2014 2013 2012 statute expiration (20,941) — —
Statutory federal income tax rate 35.0% 35.0% 35.0% Balance at end of period $ 72,181 $ 67,271 $ 67,271
State and local income taxes, net
of federal income tax benefit 1.6 0.9 0.5
Patronage earnings (20.5) (22.9) (24.2) During fiscal 2014, we increased our unrecognized tax
Domestic production activities benefits for excise tax credits related to the blending
deduction (10.0) (8.5) (3.5) and sale of renewable fuels deducted for income taxes.
Export activities at rates other
than the U.S. statutory rate 1.2 0.6 0.4 If we were to prevail on all tax positions taken relating to
Valuation allowance 1.7 2.3 0.6 uncertain tax positions, all of the unrecognized tax ben-
Tax credits (3.1) (0.5) (1.3) efits would benefit the effective tax rate. We do not
believe it is reasonably possible that the total amounts
Non-controlling interests — (0.1) (1.9)
of unrecognized tax benefits will significantly increase
Other (1.6) 1.5 0.1 or decrease during the next 12 months.
Effective tax rate 4.3% 8.3% 5.7%
We recognize interest and penalties related to unrecog-
We file income tax returns in the U.S. federal jurisdiction, nized tax benefits in our provision for income taxes. No
and various state and foreign jurisdictions. Our uncer- amount was recognized in our Consolidated Statements
tain tax positions are affected by the tax years that are of Operations for interest related to unrecognized tax
under audit or remain subject to examination by the benefits for the year ended August 31, 2014. For the
relevant taxing authorities. In addition to the current years ended August 31, 2013 and 2012, we recognized
year, fiscal 2006 through 2013 remain subject to exami- $0.2 million and $0.2 million, respectively, for interest
nation, at least for certain issues. related to unrecognized tax benefits. We recorded no
interest payable related to unrecognized tax benefits on
We account for our income tax provisions in accordance our Consolidated Balance Sheets as of August 31, 2014
with Accounting Standards Codification (ASC) Topic 740, and $0.6 million as of August 31, 2013.
Income Taxes, which prescribes a minimum threshold that a
CHS 2014 43