INCOME TAXES

The Company’s statutory federal tax rate is 35%. State tax rates vary among states and average approximately 6.0% to 6.5%, although some state rates are higher and a small number of states do not impose an income tax. The effective tax rate for the three months ended September 30, 2013 was 33.4%. The effective tax rate for the nine months ended September 30, 2013 was 1.8%, due primarily to the alternative fuel tax credit. The effective tax rate for the three months ended September 30, 2012 was 44.6% and the effective tax benefit rate for the nine months ended September 30, 2012 was 104.2%. Due to the retroactive reinstatement in January 2013 of the alternative fuel tax credit that had previously expired on December 31, 2011, the $0.9 million benefit of the 2012 credit and the $0.8 million benefit of the year-to-date credit as of September 30, 2013 were recognized in the first nine months of 2013. In addition to the effect of the alternative fuel tax credit on the effective tax benefit rate in 2013, the difference between the Company’s effective tax rate and the federal statutory rate, for both 2013 and 2012, primarily results from state income taxes, nondeductible expenses, changes in the cash surrender value of life insurance and policy proceeds, and changes in valuation allowances for deferred tax assets. Valuation allowances for deferred tax assets were decreased $0.4 million and $3.7 million for the three- and nine-month periods ended September 30, 2012, respectively, based on management’s judgment regarding the realization of deferred tax assets as affected by the purchase of Panther in June 2012. Net decreases in valuation allowances of $0.8 million, which related primarily to valuation allowances for deferred tax assets for state net operating loss carryovers of ABF, were recorded in the first nine months of 2013.

Reconciliation between the effective income tax rate, as computed on income before income taxes, and the statutory federal income tax rate for the three and nine months ended September 30, 2013 and 2012, is presented in the following table:



	Three Months Ended September 30										Nine Months Ended September 30
	2013					2012					2013					2012
	(in thousands)
Income tax provision (benefit) at the statutory federal rate	$	7,351		35.0	%	$	4,122		35.0	%	$	1,948		35.0	%	$	(1,637	)	(35.0	)%
Federal income tax effects of:
Net reversal in valuation allowances	(550		)	(2.6	)	(396		)	(3.4	)	(766		)	(13.8	)	(3,729		)	(79.7	)
Alternative fuel tax credit	(288		)	(1.4	)	—			—		(1,708		)	(30.7	)	—			—
Effect of permanent differences and other	(247		)	(1.2	)	1,121			9.5		473			8.5		250			5.3
State income taxes	756			3.6		411			3.5		154			2.8		243			5.2
Total income tax provision (benefit)	$	7,022		33.4	%	$	5,258		44.6	%	$	101		1.8	%	$	(4,873	)	(104.2	)%

As of September 30, 2013, the Company’s deferred tax liabilities which will reverse in future years exceeded deferred tax assets. Due to the nonunion defined benefit pension plan curtailment, which was recorded in second quarter 2013 (see Note G), the related pension liability was reduced by $46.3 million and associated deferred tax assets were reduced by $18.0 million (reflected as a net increase in long-term deferred tax liabilities in the accompanying consolidated balance sheet as of September 30, 2013).

During the nine months ended September 30, 2013, the Company received refunds of $2.2 million of federal and state taxes that were paid in prior years, primarily from loss carrybacks, and the Company paid state and foreign income taxes of $1.2 million.