INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2012

Provision for Income Taxes

The provision for income taxes consisted of:

	Year Ended December 31,
	2012		2011		2010
	(In thousands)
Other than U.S.:
Current	$	125,402	$	85,474	$	39,352
Deferred		3,802		1,650		1,830
Total provision for income taxes	$	129,204	$	87,124	$	41,182

Geographic Source of Income Before Provision for Income Taxes

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

	Year Ended December 31,
	2012			2011			2010
	(In thousands)
U.S.	$	(82,035	)	$	(187,426	)	$	(132,673	)
Other than U.S.		425,165			438,717			436,467
Income before provision for income taxes	$	343,130		$	251,291		$	303,794

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,
	2012			2011			2010
Panama federal statutory rate		25.0	%		25.0	%		27.5	%
Non-Panama operations		(5.2	)		(24.7	)		(32.8	)
Effect of change in tax rates		0.0			0.3			12.0
Valuation allowance for deferred tax assets		14.2			30.7			2.9
Audit settlements and reserves		2.9			0.7			2.8
Other		0.8			2.7			1.2
Effective tax rate attributable to continuing operations		37.7	%		34.7	%		13.6	%

Significant Components of Deferred Tax Assets and Liabilities

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

	December 31,
	2012			2011
	(In thousands)
Deferred tax assets:
Pension liability	$	5,779		$	4,030
Accrued liabilities for incentive compensation		13,630			8,762
Net operating loss carryforward		172,073			128,654
State tax credits and net operating loss carryforward		23,231			18,888
Long-term contracts		10,791			31,857
Other		8,606			5,316
Total deferred tax assets		234,110			197,507
Valuation allowance for deferred tax assets		(208,061	)		(160,266	)
Deferred tax assets	$	26,049		$	37,241
Deferred tax liabilities:
Property, plant and equipment	$	14,072		$	14,223
Prepaid drydock		6,633			8,018
Investments in joint ventures and affiliated companies		8,988			14,810
Unrealized exchange gains and other		3,424			3,410
Total deferred tax liabilities	$	33,117		$	40,461
Net deferred tax liability	$	(7,068	)	$	(3,220	)
	December 31,
	2012			2011
	(In thousands)
Deferred tax assets and liabilities in the accompanying consolidated balance sheets include:
Current deferred tax assets	$	9,765		$	11,931
Noncurrent deferred tax assets	$	4,180		$	6,227
Total	$	13,945		$	18,158
Current deferred tax liabilities	$	10,758		$	13,187
Noncurrent deferred tax liabilities		10,255			8,191
Total	$	21,013		$	21,378
Net deferred tax liability	$	(7,068	)	$	(3,220	)

Reconciliation of Unrecognized Tax Benefits

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

	Year Ended December 31,
	2012			2011			2010
Balance at beginning of period	$	31,664		$	26,412		$	59,113
Increases based on tax positions taken in the current year		10,830			8,197			3,511
Increases based on tax positions taken in prior years		158			2,590			920
Decreases based on tax positions taken in prior years		(1,465	)		(473	)		(875	)
Unrecognized tax benefits transferred to discontinued operations		—			—			(35,920	)
Decreases due to settlements with tax authorities		—			(2,697	)		(95	)
Decreases due to lapse of applicable statute of limitation		(671	)		(2,365	)		(242	)
Balance at end of period	$	40,516		$	31,664		$	26,412