INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2011

Provision for Income Taxes

The provision for income taxes consisted of:

	Year Ended December 31,
	2011		2010		2009
	(In thousands)
Other than U.S.:
Current	$	85,474	$	39,352	$	55,309
Deferred		1,650		1,830		5,252
Total provision for income taxes(1)	$	87,124	$	41,182	$	60,561

(1) We have no income tax provision applicable to U.S. federal, state or local jurisdictions.

Geographic Source of Income before Provision for Income Taxes

The geographic sources of income before income taxes are as follows:

	Year Ended December 31,
	2011			2010			2009
	(In thousands)
U.S.	$	(187,426	)	$	(132,673	)	$	(66,688	)
Other than U.S.		438,717			436,467			336,801
Income before provision for income taxes	$	251,291		$	303,794		$	270,113

Reconciliation of Panama Statutory Federal Tax Rate to Consolidated Effective Tax Rate

The following is a reconciliation of the Panama statutory federal tax rate to the consolidated effective tax rate:

	Year Ended December 31,
	2011			2010			2009
Panama federal statutory rate		25	%		27.5	%		30	%
Non-Panama operations		(24.7	)		(32.8	)		(27.4	)
Effect of change in tax rates		0.3			12.0			—
Valuation allowance for deferred tax assets		30.7			2.9			19.2
Audit settlements		0.7			2.8			2.6
Other		2.7			1.2			(2.0	)
Effective tax rate attributable to continuing operations		34.7	%		13.6	%		22.4	%

Significant Components of Deferred Tax Assets and Liabilities

Significant components of deferred tax assets and liabilities were as follows:

	December 31,
	2011			2010
	(In thousands)
Deferred tax assets:
Pension liability	$	4,030		$	3,093
Accrued liabilities for incentive compensation		8,762			23,664
Net operating loss carryforward		128,654			60,172
State tax credits and net operating loss carryforward		18,888			25,439
Long-term contracts		31,857			9,820
Other		5,316			5,629
Total deferred tax assets		197,507			127,817
Valuation allowance for deferred tax assets		(160,266	)		(95,734	)
Deferred tax assets	$	37,241		$	32,083
Deferred tax liabilities:
Property, plant and equipment	$	14,223		$	16,326
Prepaid drydock		8,018			7,859
Investments in joint ventures and affiliated companies		14,810			10,630
Unrealized exchange gains and other		3,410			2,993
Total deferred tax liabilities	$	40,461		$	37,808
Net deferred tax liability	$	(3,220	)	$	(5,725	)

	December 31,
	2011			2010
	(In thousands)
Deferred tax assets and liabilities in the accompanying consolidated balance sheets include:
Current deferred tax assets	$	11,931		$	10,323
Noncurrent deferred tax assets		6,227			—
Total	$	18,158		$	10,323
Current deferred tax liabilities	$	13,187		$	12,849
Noncurrent deferred tax liabilities		8,191			3,199
Total	$	21,378		$	16,048
Net deferred tax liability	$	(3,220	)	$	(5,725	)

Reconciliation of Unrecognized Tax Benefits

A reconciliation of unrecognized tax benefits is as follows (in thousands):

	Year Ended December 31,
	2011			2010			2009
Balance at beginning of period	$	26,412		$	59,113		$	57,484
Increases based on tax positions taken in the current year		8,197			3,511			9,895
Increases based on tax positions taken in prior years		2,590			920			1,322
Decreases based on tax positions taken in prior years		(473	)		(875	)		(775	)
Unrecognized tax benefits transferred to discontinued operations		—			(35,920	)		—
Decreases due to settlements with tax authorities		(2,697	)		(95	)		(8,813	)
Decreases due to lapse of applicable statute of limitation		(2,365	)		(242	)		—
Balance at end of period	$	31,664		$	26,412		$	59,113

(1) 2009 amounts include discontinued operations.