Income Taxes (Tables)

12 Months Ended

Dec. 31, 2012

Income Taxes

Schedule of income tax expense (benefit)

	Year Ended December 31,
	2012			2011		2010
	(in thousands)
Current
Federal	$	237,349		$	141,305	$	13,434
State		25,369			7,972		1,262
Total current		262,718			149,277		14,696
Deferred
Federal		(39,857	)		40,350		808
State		2,723			19,936		(1,721	)
Total deferred		(37,134	)		60,286		(913	)
Total income tax expense	$	225,584		$	209,563	$	13,783

Schedule of reconciliation of total income tax expense (benefit) to income tax expense (benefit) computed by applying the statutory federal income tax rate (35%) to pre-tax income (loss)

	Year Ended December 31,
	2012			2011			2010
	(in thousands)
Tax computed at federal statutory rate	$	223,361		$	205,843		$	9,826
State income taxes, net of federal tax benefit		23,910			20,600			1,923
State tax incentives, net of federal tax expense		(5,355	)		(3,174	)		(2,382	)
Domestic production activities deduction		(16,467	)		(10,562	)		(2,025	)
Non-deductible share-based compensation		7,256			2,000			6,747
Non-deductible transaction costs		4,208			—			—
IRS interest (income)/expense, net		93			34			(814	)
Noncontrolling interest		(11,895	)		(11,474	)		—
Partnership basis adjustment		—			4,174			—
Other, net		473			2,122			508
Total income tax expense	$	225,584		$	209,563		$	13,783

Schedule of income tax effect of temporary differences that give rise to significant portions of the deferred income tax assets and deferred income tax liabilities

	Year Ended December 31,
	2012			2011
	(in thousands)
Deferred income tax assets:
Allowance for doubtful accounts	$	751		$	475
Personnel accruals		12,925			6,437
Inventories		3,606			2,097
Unrealized derivative losses, net		26,206			—
Accrued expenses		2,080			101
State tax credit carryforward, net of federal expense		14,425			17,682
Contingent liabilities		10,845			—
Deferred financing		—			76
Other		2,050			2,695
Total gross deferred income tax assets		72,888			29,563
Deferred income tax liabilities:
Unrealized derivative gains, net		—			(31,990	)
Property, plant, and equipment		(282,219	)		(224,452	)
Investment in CVR Partners		(109,701	)		(134,920	)
Deferred financing		(1,046	)		—
Prepaid expenses		(9,439	)		(4,945	)
Total gross deferred income tax liabilities		(402,405	)		(396,307	)
Net deferred income tax liabilities	$	(329,517	)	$	(366,744	)

Schedule of reconciliation of the unrecognized tax benefits

	Year Ended December 31,
	2012			2011		2010
	(in thousands)
Balance beginning of year	$	17,712		$	245	$	—
Increase based on prior year tax positions		4,755			—		245
Decrease based on prior year tax positions		(30	)		—		—
Increases and decrease in current year tax positions		14,705			17,467		—
Settlements		—			—		—
Reductions related to expirations of statute of limitations		(193	)		—		—
Balance end of year	$	36,949		$	17,712	$	245