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Income Taxes | 12 Months Ended
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Dec. 31, 2013
Income Taxes |
12. | Income Taxes
Components of the income tax provision applicable to federal, state and foreign income taxes for the years ended December 31, 2013, 2012 and 2011 are as follows (in thousands):
|  | 2013 |  |  | 2012 |  |  | 2011 |
Federal income tax expense (benefit): |  |  |  |  |  |  |  |  |  |  |  |
Current |  | $ | 41,558 |  |  | $ | (512 | ) |  | $ | 16,336 |
Deferred |  |  | 47,136 |  |  |  | 156,003 |  |  |  | 146,842 |
|  |  | 88,694 |  |  |  | 155,491 |  |  |  | 163,178 |
State income tax expense: |  |  |  |  |  |  |  |  |  |  |  |
Current |  |  | 11,733 |  |  |  | 12,455 |  |  |  | 6,056 |
Deferred |  |  | 4,229 |  |  |  | 5,483 |  |  |  | 13,196 |
|  |  | 15,962 |  |  |  | 17,938 |  |  |  | 19,252 |
Foreign income tax expense (benefit): |  |  |  |  |  |  |  |  |  |  |  |
Current |  |  | 4,572 |  |  |  | 3,817 |  |  |  | 6,579 |
Deferred |  |  | (796 | ) |  |  | (1,050 | ) |  |  | (1,071 | )
|  |  | 3,776 |  |  |  | 2,767 |  |  |  | 5,508 |
Total income tax expense: |  |  |  |  |  |  |  |  |  |  |  |
Current |  |  | 57,863 |  |  |  | 15,760 |  |  |  | 28,971 |
Deferred |  |  | 50,569 |  |  |  | 160,436 |  |  |  | 158,967 |
Total income tax expense: |  | $ | 108,432 |  |  | $ | 176,196 |  |  | $ | 187,938 |
The difference between the statutory federal income tax rate and the effective income tax rate for the years ended December 31, 2013, 2012 and 2011 is summarized as follows:
|  | 2013 |  |  | 2012 |  |  | 2011 |
Statutory tax rate |  |  | 35.0 | % |  |  | 35.0 | % |  |  | 35.0 | %
State income taxes |  |  | 3.7 |  |  |  | 2.5 |  |  |  | 2.5 |
Permanent differences |  |  | (1.5 | ) |  |  | (0.2 | ) |  |  | (0.1 | )
Other, net |  |  | (0.6 | ) |  |  | (0.3 | ) |  |  | (0.6 | )
Effective tax rate |  |  | 36.6 | % |  |  | 37.0 | % |  |  | 36.8 | %
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 9% in 2010 and thereafter on the lesser of qualified production activities income or taxable income. 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 permanent difference for 2012 does not include any deduction as it is limited to taxable income and the Company did not have taxable income in 2012 due to the utilization of net operating loss carryforwards. The permanent difference for 2013 includes a deduction of $10.0 million as the Company fully utilized its remaining net operating loss carryforwards. The tax effect of significant temporary differences representing deferred tax assets and liabilities and changes therein were as follows (in thousands):
|  | December 31, 2013 |  |  | Net Change |  |  | December 31, 2012 |  |  | Net Change |  |  | December 31, 2011 |  |  | Net Change |  |  | December 31, 2010 |
Deferred tax assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Current: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net operating loss carryforwards |  | $ | — |  |  | $ | (18,914 | ) |  | $ | 18,914 |  |  | $ | (95,662 | ) |  | $ | 114,576 |  |  | $ | 114,576 |  |  | $ | — |
Workers’ compensation allowance |  |  | 27,612 |  |  |  | 2,534 |  |  |  | 25,078 |  |  |  | 1,074 |  |  |  | 24,004 |  |  |  | 714 |  |  |  | 23,290 |
Other |  |  | 19,647 |  |  |  | (804 | ) |  |  | 20,451 |  |  |  | 1,651 |  |  |  | 18,800 |  |  |  | 146 |  |  |  | 18,654 |
|  |  | 47,259 |  |  |  | (17,184 | ) |  |  | 64,443 |  |  |  | (92,937 | ) |  |  | 157,380 |  |  |  | 115,436 |  |  |  | 41,944 |
Non-current: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net operating loss carryforwards |  |  | 13,452 |  |  |  | 1,690 |  |  |  | 11,762 |  |  |  | (6,672 | ) |  |  | 18,434 |  |  |  | 11,969 |  |  |  | 6,465 |
Expense associated with employee stock options |  |  | 16,208 |  |  |  | 1,536 |  |  |  | 14,672 |  |  |  | 1,944 |  |  |  | 12,728 |  |  |  | 1,476 |  |  |  | 11,252 |
Federal benefit of state deferred tax liabilities |  |  | 22,838 |  |  |  | 816 |  |  |  | 22,022 |  |  |  | 1,762 |  |  |  | 20,260 |  |  |  | 7,105 |  |  |  | 13,155 |
Other |  |  | 14,703 |  |  |  | (421 | ) |  |  | 15,124 |  |  |  | 4,454 |  |  |  | 10,670 |  |  |  | (5,361 | ) |  |  | 16,031 |
|  |  | 67,201 |  |  |  | 3,621 |  |  |  | 63,580 |  |  |  | 1,488 |  |  |  | 62,092 |  |  |  | 15,189 |  |  |  | 46,903 |
Total deferred tax assets |  |  | 114,460 |  |  |  | (13,563 | ) |  |  | 128,023 |  |  |  | (91,449 | ) |  |  | 219,472 |  |  |  | 130,625 |  |  |  | 88,847 |
Deferred tax liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Current: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Other |  |  | (14,307 | ) |  |  | (2,823 | ) |  |  | (11,484 | ) |  |  | 3,171 |  |  |  | (14,655 | ) |  |  | 474 |  |  |  | (15,129 | )
Non-current: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Property and equipment basis difference |  |  | (939,594 | ) |  |  | (33,997 | ) |  |  | (905,597 | ) |  |  | (69,774 | ) |  |  | (835,823 | ) |  |  | (289,168 | ) |  |  | (546,655 | )
Other |  |  | (15,471 | ) |  |  | (186 | ) |  |  | (15,285 | ) |  |  | (2,384 | ) |  |  | (12,901 | ) |  |  | (1,231 | ) |  |  | (11,670 | )
|  |  | (955,065 | ) |  |  | (34,183 | ) |  |  | (920,882 | ) |  |  | (72,158 | ) |  |  | (848,724 | ) |  |  | (290,399 | ) |  |  | (558,325 | )
Total deferred tax liabilities |  |  | (969,372 | ) |  |  | (37,006 | ) |  |  | (932,366 | ) |  |  | (68,987 | ) |  |  | (863,379 | ) |  |  | (289,925 | ) |  |  | (573,454 | )
Net deferred tax liability |  | $ | (854,912 | ) |  | $ | (50,569 | ) |  | $ | (804,343 | ) |  | $ | (160,436 | ) |  | $ | (643,907 | ) |  | $ | (159,300 | ) |  | $ | (484,607 | )
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, 2013 and 2012 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 $34.4 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 has approximately $177 million of state net operating losses that can be carried forward as of December 31, 2013. The state net operating losses that can be carried forward, if unused, are scheduled to expire as follows: 2015 — $260,000; 2016 — $8.3 million; 2025 — $1.6 million: 2026 — $6.0 million; 2028 — $12.7 million; 2029 — $33.7 million; 2030 — $26.2 million and 2031 — $88.2 million. As of December 31, 2013, 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, 2013, the tax years ended December 31, 2010 through December 31, 2012 are open for examination by U.S. taxing authorities. As of December 31, 2013, the tax years ended December 31, 2009 through December 31, 2012 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 $38.5 million as of December 31, 2013. The unrecognized deferred tax liability associated with these earnings was approximately $5.9 million, net of available foreign tax credits. This liability would be recognized if the Company received a dividend of the unremitted earnings.

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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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