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INCOME TAXES | 12 Months Ended
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Dec. 31, 2013
INCOME TAXES |
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, 2013 consisted of the following (in millions):
|  | Years Ended December 31, |
|  | 2013 |  | 2012 |  | 2011 |
Current: |  |  |  |  |  |  |
Federal |  | $ | (24.3 | ) | $ | 38.9 |  | $ | 26.5 |
State |  | (1.0 | ) | 3.2 |  | 1.8 |
Total |  | (25.3 | ) | 42.1 |  | 28.3 |
Deferred |  | 57.5 |  | (9.1 | ) | (3.2 | )
Provision for income taxes |  | $ | 32.2 |  | $ | 33.0 |  | $ | 25.1 |
Income tax expense for 2013, 2012, and 2011 differs from amounts computed by applying the statutory federal rate to income from continuing operations before income taxes for the following reasons:
|  | Years Ended December 31, |
|  | 2013 |  | 2012 |  | 2011 |
Computed federal income tax expense |  | 35.0 | % | 35.0 | % | 35.0 | %
Discontinued operations |  | 0.0 | % | (0.2 | )% | (0.1 | )%
State income tax |  | 2.9 | % | 0.6 | % | 2.1 | %
Deferred tax adjustment |  | 0.0 | % | (1.6 | )% | 0.0 | %
Separation costs |  | 0.0 | % | 2.0 | % | 0.0 | %
Unrecognized tax benefits |  | (2.1 | )% | 1.7 | % | 0.0 | %
Other — net |  | 1.7 | % | 1.3 | % | (1.6 | )%
Provision for income taxes |  | 37.5 | % | 38.8 | % | 35.4 | %
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):
|  | As of December 31, |
|  | 2013 |  | 2012 |
Deferred tax assets: |  |  |  |  |
Benefit plans |  | $ | 41.8 |  | $ | 54.0 |
Insurance reserves |  | 10.0 |  | 9.7 |
Allowance for doubtful accounts |  | 1.3 |  | 1.7 |
Reserves |  | 6.0 |  | 1.7 |
Foreign losses and unremitted earnings |  | 3.1 |  | — |
Alternative minimum tax credits |  | 1.4 |  | — |
Other |  | (0.2 | ) | 0.3 |
Total deferred tax assets |  | 63.4 |  | 67.4 |
Deferred tax liabilities: |  |  |  |  |
Basis differences for property and equipment |  | 278.0 |  | 292.6 |
Capital Construction Fund |  | 83.4 |  | 3.3 |
Joint ventures and other investments |  | 4.6 |  | 3.8 |
Deferred revenue |  | 11.4 |  | 10.9 |
Amortization |  | 3.0 |  | 2.1 |
Total deferred tax liabilities |  | 380.4 |  | 312.7 |
Net deferred tax liability |  | $ | 317.0 |  | $ | 245.3 |
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 it vests, 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 $0.6 million and $1.3 million for 2013 and 2012, 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 paid in capital in the consolidated statements of shareholders’ equity. The Company’s deferred tax liabilities incurred during 2013 are primarily due to increased contributions to the CCF (see Note 7). Separation: Prior to the Separation, the Company joined in filing consolidated federal and consolidated or combined state income tax returns with the Former Parent Company. However, the Company’s tax provision had been computed as if it had filed separate, stand-alone federal and state income tax returns. The Company completed and filed the 2012 federal and state income tax return, which included A&B companies for the short period in 2012 before the Separation. The Company recorded a receivable from A&B and corresponding adjustment to current taxes payable to reflect the Company’s allocated portion of the 2012 federal and state income tax liabilities. In connection with the Separation, the Company incurred certain financial advisory, legal, tax and other professional fees, a portion of which is not deductible under the tax regulations. Accordingly, the Company’s income taxes for the year ended December 31, 2012, were increased by $1.7 million, related to the non-deductibility of certain Separation costs. Also in connection with the Separation, the Company entered into a Tax Sharing Agreement with A&B that governs the respective rights, responsibilities and obligations of the companies after the Separation with respect to tax liabilities and benefits, tax attributes, tax contests and other tax sharing regarding U.S. federal, state, local and foreign income taxes, other tax matters and related tax returns. A&B has liability to the Company with respect to the Company’s consolidated or combined U.S. federal, state, local and foreign income tax liability for the taxes that are attributed to A&B’s businesses and relative contribution to state and other taxable income of the Company consolidated or combined group relating to the taxable periods in which A&B was a part of that group. The Tax Sharing Agreement specifies the portion, if any, of this tax liability for which the Company and A&B will bear responsibility. In addition, the Company and A&B agreed to indemnify each other against any amounts for which they are not responsible. Under the Tax Sharing Agreement, the Company also generally will be responsible for any taxes that arise from the failure of the Separation, together with certain related transactions, to qualify as tax-free for U.S. federal income tax purposes within the meaning of Sections 355 and 368 of the Internal Revenue Code of 1986 (the “Code”), as amended, to the extent such failure to qualify is attributable to actions, events or transactions relating to the Company’s stock, assets or business, or a breach of the relevant representations or covenants made by the Company in the Tax Sharing Agreement, the materials submitted to the Internal Revenue Service in connection with the ruling request relating to the Separation or the representation letter provided to counsel in connection with such counsel’s issuance of a tax opinion relating to certain aspects of the Separation. Unrecognized Tax Benefits: A reconciliation of the beginning and ending amount of gross unrecognized tax benefits is as follows (in millions):
Balance at December 31, 2010 |  | $ | 3.5 |
Additions for tax positions of prior years |  | 0.3 |
Additions for tax positions of current year |  | (0.5 | )
Reductions for lapse of statute of limitations |  | (0.7 | )
Balance at December 31, 2011 |  | 2.6 |
Additions for tax positions of prior years |  | 4.0 |
Reductions for tax positions of current year |  | 3.7 |
Reductions for tax positions of prior years |  | (1.0 | )
Reductions for lapse of statute of limitations |  | (1.0 | )
Balance at December 31, 2012 |  | 8.3 |
Additions for tax positions of prior years |  | 2.0 |
Reductions for lapse of statute of limitations |  | (3.1 | )
Balance at December 31, 2013 |  | $ | 7.2 |
Of the total unrecognized benefits, $7.2 million, $8.3 million and $2.6 million, at December 31, 2013, 2012 and 2011, 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 twelve 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. Interest accrued related to the balance of unrecognized tax benefits totaled $0.3 million, $0.4 million and $0.2 million as of December 31, 2013, 2012 and 2011, respectively. The Company is no longer subject to U.S. federal income tax audits for years before 2010. The Company is routinely involved in state and local income tax audits. Substantially all material income tax matters have been concluded for years through 2008.

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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 15 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319 Reference 2: 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=26873400&loc=d3e23780-122690 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 08 -Paragraph h -Article 4 Reference 4: 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 5: 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 6: 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 + Details
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