Annual report pursuant to Section 13 and 15(d)

Income Taxes

v2.4.0.6
Income Taxes
12 Months Ended
Dec. 31, 2012
Income Tax Disclosure [Abstract]  
Income Taxes
Note 5. Income Taxes

The components of the provision for income taxes are as follows:
 
 
Year Ended December 31,
(In thousands)
 
2012
 
2011
 
2010
Current:
 
 
 
 
 
 
Federal
 
$
74,074

 
$
27,470

 
$
34,255

State
 
11,890

 
9,796

 
6,896

 
 
85,964

 
37,266

 
41,151

Deferred:
 
 
 
 
 
 
Federal
 
14,978

 
39,934

 
6,695

State
 
2,704

 
3,414

 
929

 
 
17,682

 
43,348

 
7,624

Total provision for income taxes
 
$
103,646

 
$
80,614

 
$
48,775



The following is a reconciliation of the U.S. statutory federal income tax rates with our effective income tax rates for 2012, 2011 and 2010:
 
 
Year Ended December 31,
(In thousands)
 
2012
 
2011
 
2010
Tax provision at statutory rate
 
$
95,584

 
$
77,029

 
$
43,549

State income taxes, net of federal benefit
 
10,211

 
7,480

 
5,002

Meals and entertainment disallowance
 
828

 
721

 
616

Tax credits
 
(2,609
)
 
(4,453
)
 
(744
)
Other, net
 
(368
)
 
(163
)
 
352

Total provision for income taxes
 
$
103,646

 
$
80,614

 
$
48,775



Deferred tax assets and liabilities consist of the following:
 
 
December 31,
(In thousands)
 
2012
 
2011
Deferred tax assets:
 
 
 
 
Claims and insurance reserves
 
$
32,499

 
$
30,003

Allowance for doubtful accounts
 
2,829

 
2,827

Accrued vacation
 
12,399

 
9,339

Deferred compensation
 
17,734

 
14,441

Other
 
9,764

 
5,992

Total deferred tax assets
 
75,225

 
62,602

Valuation allowance
 
(559
)
 

Net deferred tax assets
 
74,666

 
62,602

 
 
 
 
 
Deferred tax liabilities:
 
 
 
 
Depreciation and amortization
 
(197,875
)
 
(169,309
)
Unrecognized revenue
 
(8,171
)
 
(6,995
)
Other
 
(1,752
)
 
(1,748
)
Total deferred tax liabilities
 
(207,798
)
 
(178,052
)
Net deferred tax liability
 
$
(133,132
)
 
$
(115,450
)


Our net deferred tax liability consists of the following:
 
 
December 31,
(In thousands)
 
2012
 
2011
Current deferred tax asset
 
$
20,054

 
$
19,466

Noncurrent deferred tax liability
 
(153,186
)
 
(134,916
)
Net deferred tax liability
 
$
(133,132
)
 
$
(115,450
)

As of December 31, 2012, the Company had various state tax credit carryforwards of approximately $3.8 million that are scheduled to expire in five to fifteen years. As of December 31, 2012, the Company has established a valuation allowance in the amount of $559,000 due to the uncertainty of realization of these tax credits.

We are subject to U.S. federal income tax, as well as income tax of multiple state tax jurisdictions. We remain open to examination by the Internal Revenue Service for tax years 2009 through 2012. We remain open to examination by state tax jurisdictions for tax years 2008 through 2012.

Changes in our liability for unrecognized tax benefits could affect our effective tax rate, if recognized, but we do not expect any material changes within the next twelve months. The Company's liability for unrecognized tax benefits was immaterial as of December 31, 2012 and 2011. Interest and penalties related to uncertain tax positions, which are immaterial, are recorded in our Provision for Income Taxes on our Statement of Operations.