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Income Taxes | 12 Months Ended
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Dec. 31, 2011
Income Taxes |
13. | Income Taxes
Components of the income tax provision applicable to federal, state and foreign income taxes for the years ended December 31, 2011, 2010 and 2009 are as follows (in thousands):
|  | 2011 |  |  | 2010 |  |  | 2009 |
Federal income tax expense (benefit): |  |  |  |  |  |  |  |  |  |  |  |
Current |  | $ | 16,336 |  |  | $ | (77,310 | ) |  | $ | (117,493 | )
Deferred |  |  | 146,842 |  |  |  | 145,198 |  |  |  | 103,574 |
|  |  | 163,178 |  |  |  | 67,888 |  |  |  | (13,919 | )
State income tax expense (benefit): |  |  |  |  |  |  |  |  |  |  |  |
Current |  |  | 6,056 |  |  |  | 19 |  |  |  | (1,883 | )
Deferred |  |  | 13,196 |  |  |  | 3,246 |  |  |  | (1,875 | )
|  |  | 19,252 |  |  |  | 3,265 |  |  |  | (3,758 | )
Foreign income tax expense (benefit): |  |  |  |  |  |  |  |  |  |  |  |
Current |  |  | 6,579 |  |  |  | 2,657 |  |  |  | 338 |
Deferred |  |  | (1,071 | ) |  |  | (954 | ) |  |  | (256 | )
|  |  | 5,508 |  |  |  | 1,703 |  |  |  | 82 |
Total income tax expense (benefit): |  |  |  |  |  |  |  |  |  |  |  |
Current |  |  | 28,971 |  |  |  | (74,634 | ) |  |  | (119,038 | )
Deferred |  |  | 158,967 |  |  |  | 147,490 |  |  |  | 101,443 |
Total income tax expense (benefit) |  | $ | 187,938 |  |  | $ | 72,856 |  |  | $ | (17,595 | )
The difference between the statutory federal income tax rate and the effective income tax rate for the years ended December 31, 2011, 2010 and 2009 is summarized as follows:
|  | 2011 |  |  | 2010 |  |  | 2009 |
Statutory tax rate |  |  | 35.0 | % |  |  | 35.0 | % |  |  | 35.0 | %
State income taxes |  |  | 2.5 |  |  |  | 1.1 |  |  |  | 4.7 |
Permanent differences |  |  | (0.1 | ) |  |  | 2.3 |  |  |  | (5.7 | )
Other, net |  |  | (0.6 | ) |  |  | (0.2 | ) |  |  | 0.1 |
Effective tax rate |  |  | 36.8 | % |  |  | 38.2 | % |  |  | 34.1 | %
The Domestic Production Activities Deduction was enacted as part of the American Jobs Creation Act of 2004 (as revised by the Emergency Economic Stabilization Act of 2008,) and allows a deduction of 6% in 2009 and 9% in 2010 and thereafter on the lesser of qualified production activities income or taxable income. The permanent differences for 2010 and 2009 reflect the recapture of a portion of this deduction due to the carryback of the 2010 and 2009 net operating losses to prior years. This recapture resulted in a negative effective rate impact in 2009 due to the Company having a loss before income taxes in that year. The permanent difference for 2011 does not include any deduction as it is limited to taxable income and the Company had a tax loss in 2011. The tax effect of significant temporary differences representing deferred tax assets and liabilities and changes therein were as follows (in thousands):
|  | December 31, 2011 |  |  | Net Change |  |  | December 31, 2010 |  |  | Net Change |  |  | December 31, 2009 |  |  | Net Change |  |  | December 31, 2008 |
Deferred tax assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Current: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net operating loss carryforwards |  | $ | 114,576 |  |  | $ | 114,576 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Workers’ compensation allowance |  |  | 24,004 |  |  |  | 714 |  |  |  | 23,290 |  |  |  | (1,334 | ) |  |  | 24,624 |  |  |  | (1,360 | ) |  |  | 25,984 |
Other |  |  | 18,800 |  |  |  | 146 |  |  |  | 18,654 |  |  |  | (962 | ) |  |  | 19,616 |  |  |  | (2,735 | ) |  |  | 22,351 |
|  |  | 157,380 |  |  |  | 115,436 |  |  |  | 41,944 |  |  |  | (2,296 | ) |  |  | 44,240 |  |  |  | (4,095 | ) |  |  | 48,335 |
Non-current: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net operating loss carryforwards |  |  | 18,434 |  |  |  | 11,969 |  |  |  | 6,465 |  |  |  | 1,593 |  |  |  | 4,872 |  |  |  | 4,872 |  |  |  | — |
Expense associated with employee stock options |  |  | 12,728 |  |  |  | 1,476 |  |  |  | 11,252 |  |  |  | 2,123 |  |  |  | 9,129 |  |  |  | 2,500 |  |  |  | 6,629 |
Federal benefit of foreign deferred tax liabilities |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (9,160 | ) |  |  | 9,160 |  |  |  | (256 | ) |  |  | 9,416 |
Federal benefit of state deferred tax liabilities |  |  | 20,260 |  |  |  | 7,105 |  |  |  | 13,155 |  |  |  | 3,383 |  |  |  | 9,772 |  |  |  | 2,702 |  |  |  | 7,070 |
Other |  |  | 10,670 |  |  |  | (5,361 | ) |  |  | 16,031 |  |  |  | 6,546 |  |  |  | 9,485 |  |  |  | 4,120 |  |  |  | 5,365 |
|  |  | 62,092 |  |  |  | 15,189 |  |  |  | 46,903 |  |  |  | 4,485 |  |  |  | 42,418 |  |  |  | 13,938 |  |  |  | 28,480 |
Total deferred tax assets |  |  | 219,472 |  |  |  | 130,625 |  |  |  | 88,847 |  |  |  | 2,189 |  |  |  | 86,658 |  |  |  | 9,843 |  |  |  | 76,815 |
Deferred tax liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Current: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Other |  |  | (14,655 | ) |  |  | 474 |  |  |  | (15,129 | ) |  |  | (3,766 | ) |  |  | (11,363 | ) |  |  | 1,044 |  |  |  | (12,407 | )
Non-current: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Property and equipment basis difference |  |  | (835,823 | ) |  |  | (289,168 | ) |  |  | (546,655 | ) |  |  | (133,542 | ) |  |  | (413,113 | ) |  |  | (110,786 | ) |  |  | (302,327 | )
Other |  |  | (12,901 | ) |  |  | (1,231 | ) |  |  | (11,670 | ) |  |  | (709 | ) |  |  | (10,961 | ) |  |  | (7,091 | ) |  |  | (3,870 | )
|  |  | (848,724 | ) |  |  | (290,399 | ) |  |  | (558,325 | ) |  |  | (134,251 | ) |  |  | (424,074 | ) |  |  | (117,877 | ) |  |  | (306,197 | )
Total deferred tax liabilities |  |  | (863,379 | ) |  |  | (289,925 | ) |  |  | (573,454 | ) |  |  | (138,017 | ) |  |  | (435,437 | ) |  |  | (116,833 | ) |  |  | (318,604 | )
Net deferred tax liability |  | $ | (643,907 | ) |  | $ | (159,300 | ) |  | $ | (484,607 | ) |  | $ | (135,828 | ) |  | $ | (348,779 | ) |  | $ | (106,990 | ) |  | $ | (241,789 | )
In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. The Company expects the deferred tax assets at December 31, 2011 and 2010 to be realized as a result of the reversal of existing taxable temporary differences giving rise to deferred tax liabilities and the generation of taxable income; therefore, no valuation allowance is considered necessary. Other deferred tax assets consist primarily of the tax effect of various allowance accounts and tax-deferred expenses expected to generate future tax benefits of approximately $29.5 million. Other deferred tax liabilities consist primarily of the tax effect of receivables from insurance companies and tax-deferred income not yet recognized for tax purposes. For income tax purposes, the Company generated approximately $327 million of federal net operating losses and approximately $136 million of state net operating losses during the year ended December 31, 2011. Of these amounts, approximately $11.1 million will be carried back to prior years, and the remaining balance can be carried forward to future years along with prior year carryovers in the amount of $118 million. Net operating losses that can be carried forward, if unused, are scheduled to expire as follows: 2014 — $9.6 million; 2015 — $12.9 million; 2016 — $8.2 million; 2018 — $2.4 million; 2028 — $15.3 million; 2029 — $59.8 million; 2030 — $35.7 million and 2031 — $426 million. As of December 31, 2011, the Company had no unrecognized tax benefits. The Company has established a policy to account for interest and penalties related to uncertain income tax positions as operating expenses. As of December 31, 2011, the tax years ended December 31, 2008 through December 31, 2010 are open for examination by U.S. taxing authorities. As of December 31, 2011, the tax years ended December 31, 2007 through December 31, 2010 are open for examination by Canadian taxing authorities. On January 1, 2010, the Company converted its Canadian operations from a Canadian branch to a controlled foreign corporation for federal income tax purposes. Because the statutory tax rates in Canada are lower than those in the United States, this transaction triggered a $5.1 million reduction in deferred tax liabilities, which is being amortized as a reduction to deferred income tax expense over the weighted average remaining useful life of the Canadian assets. As a result of the above conversion, the Company’s Canadian assets are no longer directly subject to United States taxation, provided that the related unremitted earnings are permanently reinvested in Canada. Effective January 1, 2010, the Company has elected to permanently reinvest these unremitted earnings in Canada, and intends to do so for the foreseeable future. As a result, no deferred United States federal or state income taxes have been provided on such unremitted foreign earnings, which totaled approximately $25.2 million as of December 31, 2011.

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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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