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INCOME TAXES | 12 Months Ended
--- | ---
Dec. 31, 2011
INCOME TAXES |
INCOME TAXES |
10. INCOME TAXES The components of income before income taxes for the years ended December 31, 2009, 2010 and 2011 are as follows (in thousands):
|  | 2009 |  | 2010 |  | 2011 |
--- | --- | --- | --- | --- | --- | --- | ---
Domestic |  | $ | 41,399 |  | $ | 39,958 |  | $ | 28,397 |
Foreign |  |  | 26,344 |  |  | 17,230 |  |  | 14,068 |
Total |  | $ | 67,743 |  | $ | 57,188 |  | $ | 42,465 |
The following is a reconciliation from the tax computed at statutory income tax rates to the Company's income tax expense for the years ended December 31, 2009, 2010, and 2011 (in thousands):
|  | 2009 |  | 2010 |  | 2011 |
--- | --- | --- | --- | --- | --- | --- | ---
Tax computed at statutory U.S. federal income tax rates |  | $ | 23,741 |  | $ | 20,050 |  | $ | 14,863 |
Income taxes in excess (below) statutory U.S. tax rates: |  |  |  |  |  |  |  |  |  |
Guyana |  |  | 4,072 |  |  | 3,351 |  |  | 2,096 |
Bermuda and Turks & Caicos |  |  | 761 |  |  | 1,535 |  |  | 2,854 |
Valuation allowance on foreign tax credits |  |  | — |  |  | 5,250 |  |  | — |
Bargain purchase gain |  |  | — |  |  | (9,458 | ) |  | — |
Foreign tax reserve |  |  | (183 | ) |  | (125 | ) |  | 556 |
State taxes |  |  | 2,402 |  |  | (21 | ) |  | 149 |
Other, net |  |  | 368 |  |  | (975 | ) |  | 51 |
Income tax expense |  | $ | 31,160 |  | $ | 19,607 |  | $ | 20,569 |
The components of income tax expense (benefit) for the years ended December 31, 2009, 2010 and 2011 are as follows (in thousands):
|  | 2009 |  | 2010 |  | 2011 |
--- | --- | --- | --- | --- | --- | --- | ---
Current: |  |  |  |  |  |  |  |  |  |
United States—Federal |  | $ | 12,297 |  | $ | 6,517 |  | $ | (19,716 | )
United States—State |  |  | 2,467 |  |  | 1,654 |  |  | (16 | )
Foreign |  |  | 14,776 |  |  | 11,784 |  |  | 12,721 |
Total current income tax expense (benefit) |  |  | 29,540 |  |  | 19,955 |  |  | (7,011 | )
Deferred: |  |  |  |  |  |  |  |  |  |
United States—Federal |  |  | 1,836 |  |  | 2,333 |  |  | 29,553 |
United States—State |  |  | 1,273 |  |  | (1,467 | ) |  | 197 |
Foreign |  |  | (1,489 | ) |  | (1,214 | ) |  | (2,170 | )
Total deferred income tax expense (benefit) |  |  | 1,620 |  |  | (348 | ) |  | 27,580 |
Total income tax expense (benefit) |  | $ | 31,160 |  | $ | 19,607 |  | $ | 20,569 |
Consolidated: |  |  |  |  |  |  |  |  |  |
United States—Federal |  | $ | 14,133 |  | $ | 8,850 |  | $ | 9,837 |
United States—State |  |  | 3,740 |  |  | 187 |  |  | 181 |
Foreign |  |  | 13,287 |  |  | 10,570 |  |  | 10,551 |
Total income tax expense |  | $ | 31,160 |  | $ | 19,607 |  | $ | 20,569 |
The significant components of deferred tax assets and liabilities are as follows as of December 31, 2010 and 2011 (in thousands):
|  | 2010 |  | 2011 |
--- | --- | --- | --- | --- | ---
Deferred tax assets: |  |  |  |  |  |  |
Receivables reserve |  | $ | 4,435 |  | $ | 4,852 |
Temporary differences not currently deductible for tax |  |  | 11,352 |  |  | 11,348 |
Foreign tax credit carryforwards |  |  | 16,983 |  |  | 16,755 |
Interest rate swap |  |  | 4,434 |  |  | 4,535 |
Net operating losses |  |  | 421 |  |  | 9,719 |
Pension benefits |  |  | 397 |  |  | 640 |
Valuation allowance |  |  | (16,983 | ) |  | (17,315 | )
Total deferred tax asset |  | $ | 21,039 |  | $ | 30,534 |
Deferred tax liabilities: |  |  |  |  |  |  |
Property, plant and equipment, net |  | $ | 24,592 |  | $ | 55,762 |
Intangible assets, net |  |  | 33,913 |  |  | 41,757 |
Total deferred tax liabilities |  |  | 58,505 |  |  | 97,519 |
Net deferred tax liabilities |  | $ | 37,466 |  | $ | 66,985 |
Deferred tax assets and liabilities are reflected in the accompanying consolidated balance sheets as follows (in thousands):
|  | 2010 |  | 2011 |
--- | --- | --- | --- | --- | ---
Deferred tax assets: |  |  |  |  |  |  |
Current |  | $ | 15,787 |  | $ | 21,921 |
Long term |  |  | — |  |  | — |
Total deferred tax asset |  | $ | 15,787 |  | $ | 21,921 |
Deferred tax liabilities: |  |  |  |  |  |  |
Current |  | $ | — |  | $ | — |
Long term |  |  | 53,253 |  |  | 88,906 |
Total deferred tax liabilities |  | $ | 53,253 |  | $ | 88,906 |
Net deferred tax liabilities |  | $ | 37,466 |  | $ | 66,985 |
As of December 31, 2011, the Company estimated that it had federal net operating loss carryforwards of $22.3 million that begin to expire in 2031 and state net operating loss carryforwards of $29.1 million that begin to expire in 2015. As part of the Alltel Acquisition and the associated levels of future debt and interest service, the Company re-examined its projected mix of foreign source and U.S.-source earnings and concluded it is more likely than not that it will not generate enough foreign source income to utilize its existing foreign tax credits prior to their expiration date. As a result, the Company has placed a full valuation allowance against those credits during 2010. As of December 31, 2011, the Company continued to maintain a full valuation allowance against those credits. The undistributed earnings of the Company's foreign subsidiaries are considered to be indefinitely reinvested and, accordingly, no U.S. federal and state income taxes have been provided thereon. Determination of the amount of unrecognized deferred U.S. income tax liability is not practical because of the complexities associated with its hypothetical calculation; however, unrecognized foreign tax credits would be available to reduce a portion of the U.S. tax liability. The following shows the activity related to unrecognized tax benefits during the three years ended December 31, 2011 (in thousands):
Gross unrecognized tax benefits at December 31, 2008 |  | $ | 5,690 |
Lapse in statute of limitations |  |  | (183 | )
Gross unrecognized tax benefits at December 31, 2009 |  |  | 5,507 |
Increase in tax positions |  |  | 1,030 |
Lapse in statute of limitations |  |  | (125 | )
Gross unrecognized tax benefits at December 31, 2010 |  |  | 6,412 |
Increase in tax positions |  |  | 590 |
Lapse in statute of limitations |  |  | (50 | )
Gross unrecognized tax benefits at December 31, 2011 |  | $ | 6,952 |
All $7.0 million of unrecognized tax benefits would affect the effective tax rate if recognized. The Company accrues interest and penalties related to unrecognized tax benefits in its provision for income taxes, if material. The Company and its subsidiaries file income tax returns in the U.S. and in various state and local jurisdictions. The statute of limitations related to the consolidated U.S. federal income tax return is closed for all tax years up to and including 2007. The expiration of the statute of limitations related to the various state income tax returns that the Company and subsidiaries file varies by state. The Company's consolidated federal tax return and any significant state tax returns are not currently under examination. The Company does not expect that the amount of unrecognized tax benefits relating to U.S. tax matters will change significantly within the next 12 months. The Company also files an income tax return in Guyana. See Note 12 relating to certain tax matters pertaining to those filings. There is no expected settlement date of those matters and upon settlement, which might not occur in the near future, the payment may vary significantly from the amounts currently recorded. The Company will continue to update amounts recorded as new developments arise.

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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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