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INCOME TAXES | 12 Months Ended
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Dec. 31, 2011
INCOME TAXES [Abstract] |
INCOME TAXES | 11. INCOME TAXES The income tax expense on income from continuing operations for each of the three years in the period ended December 31, 2011 consisted of the following (in millions):
|  | 2011 |  |  | 2010 |  |  | 2009 |
Current: |  |  |  |  |  |  |  |  |  |  |  |
Federal |  | $ | 40 |  |  | $ | 43 |  |  | $ | 24 |
State and foreign |  |  | 4 |  |  |  | 6 |  |  |  | 2 |
Current |  |  | 44 |  |  |  | 49 |  |  |  | 26 |
Deferred: |  |  |  |  |  |  |  |  |  |  |  |
Federal |  |  | (10 | ) |  |  | (3 | ) |  |  | (23 | )
State and foreign |  |  | (2 | ) |  |  | (1 | ) |  |  | 2 |
Deferred |  |  | (12 | ) |  |  | (4 | ) |  |  | (21 | )
Total continuing operations tax expense |  | $ | 32 |  |  | $ | 45 |  |  | $ | 5 |
Income tax expense for 2011, 2010, and 2009 differs from amounts computed by applying the statutory federal rate to income from continuing operations before income taxes for the following reasons (in millions):
|  | 2011 |  |  | 2010 |  |  | 2009 |
Computed federal income tax expense |  | $ | 30 |  |  | $ | 40 |  |  | $ | 4 |
State income taxes |  |  | 2 |  |  |  | 5 |  |  |  | 4 |
Tax effect of HS&TC consolidation |  |  | -- |  |  |  | -- |  |  |  | (2 | )
Other-net |  |  | -- |  |  |  | -- |  |  |  | (1 | )
Income tax expense |  | $ | 32 |  |  | $ | 45 |  |  | $ | 5 |
The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at December 31 of each year are as follows (in millions):
|  | 2011 |  |  | 2010 |
Deferred tax assets: |  |  |  |  |  |  |  |
Benefit plans |  | $ | 82 |  |  | $ | 77 |
Insurance reserves |  |  | 10 |  |  |  | 10 |
Capitalized development costs |  |  | 16 |  |  |  | 14 |
Other |  |  | 10 |  |  |  | 6 |
Total deferred tax assets |  |  | 118 |  |  |  | 107 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
Basis differences for property and equipment |  |  | 293 |  |  |  | 287 |
Tax-deferred gains on real estate transactions |  |  | 213 |  |  |  | 216 |
Capital Construction Fund |  |  | 3 |  |  |  | 3 |
Joint ventures and other investments |  |  | 1 |  |  |  | 7 |
Other |  |  | 21 |  |  |  | 17 |
Total deferred tax liabilities |  |  | 531 |  |  |  | 530 |
Net deferred tax liability |  | $ | 413 |  |  | $ | 423 |
The Company's income taxes payable has been reduced by the tax benefits from share-based compensation. The Company receives an income tax benefit for exercised stock options calculated as the difference between the fair market value of the stock issued at the time of exercise and the option exercise price, tax effected. The Company also receives an income tax benefit for non-vested stock when they vest, measured as the fair market value of the stock at the time of vesting, tax effected. The net tax benefits from share-based transactions were $2.0 million and $0.6 million for 2011 and 2010, respectively, and the portion of the tax benefit related to the excess of the amount reported as the tax deduction over expense was reflected as an increase to additional capital in the consolidated statements of shareholders' equity. A reconciliation of the beginning and ending amount of gross unrecognized tax benefits is as follows (in millions):
Balance at January 1, 2009 |  | $ | 6 |
Additions for tax positions of prior years |  |  | -- |
Additions for tax positions of current year |  |  | 3 |
Reductions for tax positions of prior years |  |  | -- |
Reductions for lapse of statute of limitations |  |  | (1 | )
Balance at December 31, 2009 |  |  | 8 |
Additions for tax positions of prior years |  |  | -- |
Additions for tax positions of current year |  |  | 2 |
Reductions for tax positions of prior years |  |  | (1 | )
Reductions for lapse of statute of limitations |  |  | (1 | )
Balance at December 31, 2010 |  |  | 8 |
Additions for tax positions of prior years |  |  | 1 |
Additions for tax positions of current year |  |  | (1 | )
Reductions for tax positions of prior years |  |  | -- |
Reductions for lapse of statute of limitations |  |  | (1 | )
Balance at December 31, 2011 |  | $ | 7 |
Of the total unrecognized benefits, $7 million and $8 million, at December 31, 2011 and 2010, respectively, represent the amount that, if recognized, would favorably affect the Company's effective rate in future periods. The Company does not expect a material change in gross unrecognized benefits in the next 12 months. The Company recognizes potential accrued interest and penalties related to unrecognized tax benefits in income tax expense. To the extent interest and penalties are not ultimately assessed with respect to the settlement of uncertain tax positions, amounts accrued will be reduced and reflected as a reduction of the overall income tax provision. As of December 31, 2011 the amounts of accrued interest and penalties were not material. The Company is no longer subject to U.S. federal income tax audits for years before 2008. The Company is routinely involved in state and local income tax audits. Substantially all material income tax matters have been concluded for years through 2006.

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- 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. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 109 -Paragraph 136, 172 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 109 -Paragraph 43, 44, 45, 46, 47, 48, 49 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 08 -Paragraph h -Article 4 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32559-109319 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=6881521&loc=d3e23780-122690 + Details
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