Note 14 - Income Taxes

The provision for income taxes for the periods indicated consists of the following (in millions):


	Year Ended December 31,
	2011			2010			2009
Current:
Federal	$	26.4		$	3.3		$	1.1
Foreign		0.1			—			—
State and local		1.3			3.3			1.0

	$	27.8		$	6.6		$	2.1

Deferred:
Federal	$	36.3		$	54.7		$	5.5
Foreign		(1.7	)		—			—
State and local, net of valuation provisions		5.7			2.3			0.8

	$	40.3		$	57.0		$	6.3

Provision for income taxes	$	68.1		$	63.6		$	8.4

Effective income tax rate		39.1	%		41.3	%		10.6	%

The tax effects of significant items comprising the Company's net deferred tax liability as of the dates indicated are as follows (in millions):


	2011			2010
Deferred tax assets:
Accrued self insurance	$	16.3		$	14.1
Compensation and benefits		12.3			9.6
Operating loss carryforward		11.5			12.8
Tax credit carryforward		—			1.4
Property and equipment		7.2			1.0
Bad debts		2.5			2.8
Other		9.0			7.6
Valuation allowance		(2.8	)		(5.6	)

Total deferred tax assets	$	56.0		$	43.7

Deferred tax liabilities:
Property and equipment	$	61.5		$	35.6
Goodwill		34.6			24.7
Other intangible assets		34.3			20.7
Gain on remeasurement of equity investee		11.1			—
Accounts receivable retainage		11.6			6.7
Other		14.9			6.5

Total deferred tax liabilities	$	168.0		$	94.2

Net deferred tax liabilities	$	(112.0	)	$	(50.5	)

Total net current and noncurrent deferred tax balances included in the Company's consolidated balance sheets as of the dates indicated are as follows (in millions):


	2011			2010
Net current deferred tax assets	$	10.6		$	12.0
Net noncurrent deferred tax liabilities		(122.6	)		(62.5	)

Net deferred tax liabilities	$	(112.0	)	$	(50.5	)

In assessing the ability to realize the deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which these temporary differences become deductible. Management considers the projected future taxable income and prudent and feasible tax planning strategies in making this assessment. As of December 31, 2011 and 2010, valuation allowances of $2.8 million and $5.6 million have been recorded, respectively, relating primarily to foreign net operating loss carryforwards.

The Company has certain federal, state and foreign net operating loss carryforwards, the tax effect of which was approximately $11.5 million as of December 31, 2011. The federal net operating loss carryforwards, the tax effect of which is approximately $2.5 million as of December 31, 2011, begin to expire in 2029. The state net operating loss carryforwards, the tax effect of which is approximately $4.1 million as of December 31, 2011, may be carried forward between 5 and 20 years, depending on the jurisdiction. The tax effect of the Company's foreign net operating loss carryforwards is approximately $4.5 million as of December 31, 2011. These foreign net operating loss carryforwards are primarily related to the Company's Canadian operations and begin to expire in 2014.

As of December 31, 2011, the Company has not made a provision for U.S. income taxes on unremitted foreign earnings because such earnings are intended to be indefinitely reinvested outside the U.S. Generally, such amounts become subject to U.S. taxation upon the remittance of dividends and certain other circumstances.

A reconciliation of U.S. statutory federal income tax rate related to pretax income from continuing operations to the effective tax rate for the years ended December 31 is as follows:


	2011			2010			2009
U.S. statutory federal rate applied to pretax income		35.0	%		35.0	%		35.0	%
State and local income taxes, net of federal benefit		3.4			3.2			4.1
Foreign tax rate differential		0.2			0.1			0.1
Non-deductible expenses		1.7			2.9			1.5
Change in state tax rate		0.2			(0.8	)		0.5
Domestic production activities deduction		(0.9	)		(0.1	)		—
Other		(0.0	)		0.9			0.1
Change in valuation allowance for deferred tax assets		(0.5	)		0.1			(30.7	)

Effective income tax rate		39.1	%		41.3	%		10.6	%

An entity may only recognize or continue to recognize tax positions that meet a "more likely than not" threshold. In the ordinary course of business, there is inherent uncertainty in quantifying income tax positions. The Company assesses its income tax positions and records tax benefits for all years subject to examination based on management's evaluation of the facts, circumstances and information available at the reporting date. For those tax positions where it is more likely than not that a tax benefit will be sustained, the Company has recognized the largest amount of tax benefit with a greater than 50% likelihood of being realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. For those income tax positions where it is not more likely than not that a tax benefit will be sustained, no tax benefit has been recognized in the Company's financial statements. Management believes that the Company has not taken material tax positions that would be deemed to be "uncertain," therefore, the Company has not established a liability for uncertain positions for the year ended December 31, 2011.