NOTE 4.

INCOME TAXES

The provision for income taxes consists of the following:


(in thousands)	Year Ended December 31,
	2013		2012		2011
Current	$	5,208	$	4,886	$	5,741
Deferred		22,769		23,204		25,715

	$	27,977	$	28,090	$	31,456

The reconciliation of the federal statutory tax rate to the Company’s effective tax rate is as follows:


	Year Ended December 31,
	2013			2012			2011
Federal statutory rate		35.0	%		35.0	%		35.0	%
State taxes, net of federal benefit		4.1			4.2			4.1
Other		0.1			(0.6	)		(0.3	)

		39.2	%		38.6	%		38.8	%

The following table shows the deferred income taxes related to the temporary differences between the tax bases of assets and liabilities and the respective amounts included in “Deferred Income Taxes, net” on the Company’s Consolidated Balance Sheets:


(in thousands)	December 31,
	2013		2012
Deferred Tax Liabilities:
Accelerated Depreciation	$	257,537	$	248,515
Prepaid Costs Currently Deductible		4,794		4,597
Other		—		2,451

Total Deferred Tax Liabilities		262,331		255,563

Deferred Tax Assets:
Accrued Costs Not Yet Deductible		6,638		6,138
Allowance for Doubtful Accounts		775		1,163
Net Operating Loss Carry Forwards and Credits		2,736		12,103
Deferred Revenues		305		1,300
Share-Based Compensation		5,862		8,295
Other		4,812		—

Total Deferred Tax Assets		21,128		28,999

Deferred Income Taxes, net	$	241,203	$	226,564

In 2013, 2012 and 2011 the Company obtained an excess tax benefit of $1.3 million, $1.0 million and 1.0 million, respectively, from the exercise of non-qualified stock options and early dispositions of stock obtained through the exercise of incentive stock options by employees. The tax benefit was recorded as common stock in conjunction with the proceeds received from the exercise of the stock options.

As of December 31, 2012, the Company’s federal net operating losses for tax return purposes were $12.3 million, which were fully utilized during 2013. As of December 31, 2013, the Company had state and foreign tax credit carry forwards of $2.6 million, which will begin to expire in 2022, if not utilized.

The Company recognizes the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the more-likely-than-not threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement with the relevant tax authority. The Company evaluated all of its tax positions for which the statute of limitations remained open and determined there were no material unrecognized tax benefits as of December 31, 2013 and 2012. In addition, there have been no material changes in unrecognized benefits during 2013, 2012 and 2011.

The Company is subject to income taxes in the U.S. federal jurisdiction, and various states and foreign jurisdictions. Tax regulations within each jurisdiction are subject to interpretation of the related tax laws and regulations and require the application of significant judgment. With few exceptions, the Company is no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations by tax authorities for the years before 2009.

Our income tax returns are subject to examination by federal, state and foreign tax authorities. There may be differing interpretations of tax laws and regulations, and as a result, disputes may arise with these tax authorities involving the timing and amount of deductions and allocation of income.

The Company recognizes interest and penalties related to unrecognized tax benefits in the provision for income taxes for all periods presented. Such interest and penalties were not significant for the years ended December 31, 2013, 2012 and 2011.

In September 2013, the U.S. Department of the Treasury and the Internal Revenue Service released final regulations regarding the deductibility and capitalization of expenditures related to tangible property. The final regulations are effective for taxable years beginning on or after January 1, 2014. We are currently assessing these regulations and their impact to our financial statements. We do not anticipate that these regulations will have a material impact on our consolidated financial position.