The following is a reconciliation of the expected statutory federal income tax provision to the Company’s actual income tax provision:



	Three Months Ended March 31,
	2012			2011
	(Dollars in millions)
Expected income tax provision at federal statutory rate	$	89.7		$	93.6
Excess depletion	(16.5		)	(13.8		)
Foreign earnings provision differential	(16.6		)	(19.3		)
Remeasurement of foreign income tax accounts	8.9			6.4
State income taxes, net of U.S. federal tax benefit	2.4			2.4
General business tax credits	(4.8		)	(3.5		)
Changes in valuation allowance	7.0			1.0
Changes in tax reserves	(3.1		)	2.0
Other, net	7.0			4.0
Total provision	$	74.0		$	72.8

The Company reduced its net unrecognized tax benefits by $20.0 million during the three months ended March 31, 2012. The reduction is based upon the successful completion of the 2007-2008 Internal Revenue Service (IRS) audit and the effective settlement of the 1999-2006 tax years due to favorable resolution of the 2006 IRS appeals decision, offset by the reassessment of current and prior year foreign positions associated with intercompany financing transactions due to a formal position paper received from the Australian Tax Office in the three months ended March 31, 2012. The Company also recognized additional interest and penalties related to unrecognized tax benefits of $16.3 million for the three months ended March 31, 2012.

On March 29, 2012, Australia passed legislation creating a minerals resource rent tax (the MRRT) effective from July 1, 2012. The MRRT is a profits-based tax of the Company's existing and future coal projects at an effective tax rate of 22.5%. Under the MRRT, taxpayers are able to elect a market value asset starting base for existing projects which allows for the fair market value of the tenements to be deducted over the life of the mine as an allowance against MRRT. The market value allowance, and ultimately any future benefit, is subject to numerous uncertainties including review and approval by the Australian Tax Office, realization only after other MRRT allowances provided under the law, and estimates of long-term pricing and cost data necessary to estimate the future benefit and any MRRT liability. The Company evaluated the provisions of the new tax and assessed recoverability of deferred tax assets and the valuation of liabilities associated with the implementation of the MRRT. For the three months ended March 31, 2012, the Company believes there is no material net deferred tax asset to be recorded for the market value starting base.