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INCOME TAXES | 12 Months Ended
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Dec. 31, 2012
INCOME TAXES |
INCOME TAXES | NOTE F – INCOME TAXES Significant components of the provision or benefit for income taxes for the years ended December 31 were as follows:
|  | 2012 |  | 2011 |  | 2010 |
|  | (in thousands) |
Current provision (benefit): |  |  |  |  |  |  |
Federal |  | $ | – |  | $ | (872 | ) | $ | (10,756 | )
State |  | 694 |  | 487 |  | 549 |
Foreign |  | 405 |  | 489 |  | 288 |
|  | 1,099 |  | 104 |  | (9,919 | )
Deferred provision (benefit): |  |  |  |  |  |  |
Federal |  | (8,656 | ) | 2,664 |  | (7,831 | )
State |  | (1,699 | ) | 415 |  | (3,596 | )
Foreign |  | (4 | ) | (23 | ) | (30 | )
|  | (10,359 | ) | 3,056 |  | (11,457 | )
Total provision (benefit) for income taxes |  | $ | (9,260 | ) | $ | 3,160 |  | $ | (21,376 | )
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the deferred tax provision or benefit for the years ended December 31 were as follows:
|  | 2012 |  | 2011 |  | 2010 |
|  |  |  | (in thousands) |  |  |
Amortization, depreciation, and basis differences for property, plant and equipment and other long-lived assets |  | $ | 137 |  | $ | 15,059 |  | $ | (11,552 | )
Amortization of intangibles |  | (1,604 | ) | – |  | – |
Changes in reserves for workers’ compensation and cargo claims |  | (3,319 | ) | (970 | ) | 1,759 |
Revenue recognition |  | (253 | ) | 654 |  | 1,201 |
Allowance for doubtful accounts |  | 229 |  | (705 | ) | (428 | )
Foreign tax credit carryforward |  | (133 | ) | (240 | ) | 286 |
Nonunion pension and other retirement plans |  | 702 |  | (4,885 | ) | (963 | )
Deferred compensation plans |  | 669 |  | 853 |  | 696 |
Federal net operating loss carryforwards |  | (2,538 | ) | (680 | ) | – |
State net operating loss carryforwards |  | (725 | ) | 705 |  | (302 | )
State depreciation adjustments |  | 20 |  | (1,179 | ) | 74 |
Share-based compensation |  | (702 | ) | (941 | ) | (971 | )
Valuation allowance decrease |  | (3,180 | ) | (782 | ) | (558 | )
Leases |  | 806 |  | (316 | ) | (585 | )
Other accrued expenses |  | (1,586 | ) | (863 | ) | 629 |
Other |  | 1,118 |  | (2,654 | ) | (743 | )
Deferred tax provision (benefit) |  | $ | (10,359 | ) | $ | 3,056 |  | $ | (11,457 | )
Significant components of deferred tax assets and liabilities at December 31 were as follows:
|  | 2012 |  | 2011 |
|  | (in thousands) |
Deferred tax assets: |  |  |  |  |
Accrued expenses |  | $ | 51,715 |  | $ | 45,970 |
Pension liabilities |  | 34,163 |  | 35,529 |
Postretirement liabilities other than pensions |  | 7,127 |  | 6,701 |
Share-based compensation |  | 6,034 |  | 7,138 |
Federal and state net operating loss carryovers |  | 14,071 |  | 3,799 |
Other |  | 2,092 |  | 1,223 |
Total deferred tax assets |  | 115,202 |  | 100,360 |
Valuation allowance |  | (2,511 | ) | (5,644 | )
Total deferred tax assets, net of valuation allowance |  | 112,691 |  | 94,716 |
Deferred tax liabilities: |  |  |  |  |
Amortization, depreciation, and basis differences for property, plant and equipment and other long-lived assets |  | 73,558 |  | 71,755 |
Intangibles |  | 37,282 |  | 954 |
Revenue recognition |  | 4,268 |  | 3,013 |
Prepaid expenses |  | 3,647 |  | 3,368 |
Total deferred tax liabilities |  | 118,755 |  | 79,090 |
Net deferred tax assets (liabilities) |  | $ | (6,064 | ) | $ | 15,626 |
Reconciliation between the effective income tax rate, as computed on income or loss before income taxes, and the statutory federal income tax rate for the years ended December 31 is presented in the following table:
|  | 2012 |  | 2011 |  | 2010 |
|  | (in thousands) |
Income tax provision (benefit) at the statutory federal rate |  | $ | (5,947 | ) | $ | 3,323 |  | $ | (18,829 | )
Federal income tax effects of: |  |  |  |  |  |  |
State income taxes |  | 352 |  | (316 | ) | 976 |
Nondeductible expenses |  | 1,415 |  | 1,079 |  | 1,179 |
Life insurance proceeds and changes in cash surrender value |  | (752 | ) | (906 | ) | (882 | )
Dividends received deduction |  | (5 | ) | – |  | (14 | )
Alternative fuel credit |  | – |  | (995 | ) | (979 | )
Decrease in valuation allowances |  | (3,180 | ) | (211 | ) | (558 | )
Other |  | (539 | ) | (182 | ) | 520 |
Federal income tax provision (benefit) |  | (8,656 | ) | 1,792 |  | (18,587 | )
State income tax provision (benefit) |  | (1,005 | ) | 902 |  | (3,047 | )
Foreign income tax provision |  | 401 |  | 466 |  | 258 |
Total provision (benefit) for income taxes |  | $ | (9,260 | ) | $ | 3,160 |  | $ | (21,376 | )
Effective tax (benefit) rate |  | (54.5 | )% | 33.3 | % | (39.7 | )%
Income taxes paid totaled $5.3 million, $5.2 million, and $4.7 million in 2012, 2011, and 2010, respectively, before income tax refunds of $7.1 million, $4.6 million, and $35.7 million in 2012, 2011, and 2010, respectively. The tax benefit for exercised options and the tax benefit of dividends on share-based payment awards, which were reflected in paid-in capital, were immaterial in amount for 2012, 2011, and 2010. The Company had state net operating loss carryovers of $89.9 million and state contribution carryovers of $1.1 million at December 31, 2012. These state net operating loss and contribution carryovers expire in five to twenty years, with the majority of state expirations in fifteen or twenty years. As of December 31, 2012, the Company had valuation allowances of $1.5 million for state net operating loss and deferred tax assets related to future state income tax benefits, $0.6 million related to foreign tax credit carryovers, and $0.3 million related to foreign net operating loss carryovers, due to the uncertainty of realization of these items. Foreign tax credit carryovers expire in six to ten years. Valuation allowances were increased by $0.8 million in 2012 for certain state net operating losses and state deferred tax assets of the Company’s subsidiaries for which realization was determined to be not more likely than not due to tax losses. In 2011, the Company established a valuation allowance of $4.0 million for deferred tax assets for nonunion defined benefit pension liabilities accumulated in other comprehensive loss within stockholders’ equity. In 2012, primarily as a result of temporary differences attributable to the acquisition of Panther which resulted in substantial deferred tax liabilities which will reverse in future periods, management determined that realization of this asset was more likely than not and that this valuation allowance was no longer required. As a result, the valuation allowance was decreased by $4.0 million during 2012. Federal income tax returns filed for tax years through 2008 are closed by the applicable statute of limitations. During 2012, the U.S. Internal Revenue Service (the “IRS”) notified the Company that the tax return for 2010 would be audited. The field work on this examination began in late 2012. In 2010, the IRS completed an examination of the Company’s federal income tax returns for 2009 and 2008. Upon completion of the audit field work, the Company and the IRS agreed to certain proposed adjustments relating to the timing of deductions and credits and, in 2010, the Company paid the amounts due for tax of $1.3 million and interest of less than $0.1 million. The Company is under examination by certain other taxing authorities, and a subsidiary of the Company was examined by the IRS for 2009 which resulted in no changes. Although the outcome of such audits is always uncertain and could result in payment of additional taxes, the Company does not believe the results of any of these audits will have a material effect on its financial position, results of operations, or cash flows. For periods subsequent to the June 15, 2012 acquisition date, Panther will be included in consolidated federal income tax returns filed by the Company and in consolidated or combined state income tax returns in states permitting or requiring consolidated or combined income tax returns for affiliated groups such as the Company and its subsidiaries. For periods prior to the acquisition date, Panther and its subsidiaries filed as an affiliated group on a stand-alone basis. Panther federal tax returns for years through 2008 are closed by the statute of limitations. The 2009 federal tax return of Panther was examined by the IRS and a report of no change is pending review by the Congressional Joint Committee on Taxation. Panther has federal net operating loss carryovers of approximately $20 million for periods ending on or prior to June 15, 2012. State net operating loss carryovers for the same periods are approximately $16 million. Federal net operating loss carryovers will expire if not used within twenty years. State carryover periods for Panther vary from five to twenty years. For federal tax purposes and for most states, the use of such carryovers is limited by Section 382 of the Internal Revenue Code. The limitation applies by restricting the amount of net operating loss carryovers that may be used in individual tax years subsequent to the acquisition date. However, it is not expected that the Section 382 limitation will result in the expiration of net operating loss carryovers prior to their availability under Section 382. The Company has determined that no reserves for uncertain tax positions were required at December 31, 2012 and 2011 or during the years then ended. The Company is not aware of any matters that would result in a material change in reserves for uncertain tax positions in 2013. During 2012, settlement of certain state income tax obligations related to amended state income tax returns resulted in a $0.1 million net reduction in interest expense accrued. At December 31, 2012, no accrued interest related to state income taxes to be paid on amended returns was required. Interest accrued on state obligations at December 31, 2011 totaled $0.1 million. Interest of less than $0.1 million in 2012 and 2011 and $0.2 million in 2010 was paid related to federal and state income taxes. Interest of $0.2 million was accrued in 2012 for certain foreign income tax obligations.

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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 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 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=6881521&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 15 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319 Reference 5: 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 6: 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 7: 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 8: 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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