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INCOME TAXES
 6 Months Ended
Mar. 31, 2012
INCOME TAXES  
INCOME TAXES

8.                                    INCOME TAXES

 

The components of (loss) earnings before income taxes, after adjusting (loss) earnings for non-controlling interests, are as follows:

 

 

Three months ended

 

Six months ended

 

March 31,

 

March 31,

 

2012

 

2011

 

2012

 

2011

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Loss) earnings before income taxes in:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Canada

 

$

(12,000

)

 

 

$

2,360,000

 

 

 

$

1,526,000

 

 

 

$

3,005,000

 

United States

 

(2,972,000

)

 

 

(3,430,000

)

 

 

(4,302,000

)

 

 

(2,504,000

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

(2,984,000

)

 

 

$

(1,070,000

)

 

 

$

(2,776,000

)

 

 

$

501,000

 

 

The components of the income tax (benefit) provision are as follows:

 

 

Three months ended

 

Six months ended

 

March 31,

 

March 31,

 

2012

 

2011

 

2012

 

2011

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current

 

$

105,000

 

 

 

$

329,000

 

 

 

$

663,000

 

 

 

$

684,000

 

Deferred

 

(108,000

)

 

 

64,000

 

 

 

(176,000

)

 

 

195,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

(3,000

)

 

 

$

393,000

 

 

 

$

487,000

 

 

 

$

879,000

 

 

Barnwell’s effective consolidated income tax rate for the three and six months ended March 31, 2012, after adjusting (loss) earnings before income taxes for non-controlling interests, was 0% and (18%), respectively, as compared to (37%) and 175% for the three and six months ended March 31, 2011, respectively.

 

Consolidated taxes do not bear a customary relationship to pretax (losses) earnings due mainly to the fact that Canadian income taxes are not sheltered by current period U.S. source losses, Canadian income taxes are not estimated to have a current or future benefit as foreign tax credits or deductions for U.S. tax purposes, and U.S. consolidated net operating loss carryovers generated in the current year periods are not estimated to have any future U.S. tax benefit prior to expiration.

 

Included in the income tax provision for the six months ended March 31, 2011 is a $130,000 benefit primarily from the lapsing of the statute of limitations for uncertain tax positions related to Canadian income taxes.  There were no lapses of the statute of limitations for uncertain tax positions in the three months ended March 31, 2011 or in the three and six months ended March 31, 2012.  Offsetting this benefit were increases in the effective tax rate due to the increase in stock appreciation rights expense during the period that did not have a corresponding tax benefit as the related deferred tax asset has a full valuation allowance.