Income Taxes

12 Months Ended

Dec. 31, 2012

Income Taxes [Abstract]

INCOME TAXES

NOTE 4. INCOME TAXES

The provision for income taxes consists of the following:

(in thousands)	Year Ended December 31,
	2012		2011		2010
Current	$	4,886	$	5,741	$	8,754
Deferred		23,204		25,715		13,817
	$	28,090	$	31,456	$	22,571

The reconciliation of the federal statutory tax rate to the Company’s effective tax rate is as follows:

	Year Ended December 31,
	2012			2011			2010
Federal statutory rate		35.0	%		35.0	%		35.0	%
State taxes, net of federal benefit		4.2			4.1			4.2
Other		(0.6	)		(0.3	)		(1.0	)
		38.6	%		38.8	%		38.2	%

The following table shows the deferred income taxes related to the temporary differences between the tax bases of assets and liabilities and the respective amounts included in “Deferred Income Taxes, net” on the Company’s Consolidated Balance Sheets:

(in thousands)	December 31,
	2012		2011
Deferred Tax Liabilities:
Accelerated Depreciation	$	248,515	$	238,912
Prepaid Costs Currently Deductible		4,597		4,178
Other		2,451		2,414
Total Deferred Tax Liabilities		255,563		245,504
Deferred Tax Assets:
Accrued Costs Not Yet Deductible		6,138		6,017
Allowance for Doubtful Accounts		1,163		582
Net Operating Loss Carry Forwards and Credits		12,103		25,495
Deferred Revenues		1,300		243
Stock Based Compensation		8,295		7,801
Total Deferred Tax Assets		28,999		40,138
Deferred Income Taxes, net	$	226,564	$	205,366

In 2012, 2011 and 2010 the Company obtained an excess tax benefit of $1.0 million each year from the exercise of non-qualified stock options and early dispositions of stock obtained through the exercise of incentive stock options by employees. The tax benefit was recorded as common stock in conjunction with the proceeds received from the exercise of the stock options.

As of December 31, 2012, the Company’s federal net operating losses for tax return purposes were $12.3 million. If not utilized, these carry forwards will begin to expire in 2031. As of December 31, 2012, the Company had state and foreign tax credit carry forwards of $6.8 million, which will begin to expire in 2020, if not utilized.

The Company recognizes the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the more-likely-than-not threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement with the relevant tax authority. The Company evaluated all of its tax positions for which the statute of limitations remained open and determined there were no material unrecognized tax benefits as of December 31, 2012 and 2011. In addition, there have been no material changes in unrecognized benefits during 2012, 2011 and 2010.

The Company is subject to income taxes in the U.S. federal jurisdiction, and various states and foreign jurisdictions. Tax regulations within each jurisdiction are subject to interpretation of the related tax laws and regulations and require the application of significant judgment. With few exceptions, the Company is no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations by tax authorities for the years before 2008.

Our income tax returns are subject to examination by federal, state and foreign tax authorities. We are currently under examination by the California Franchise Tax Board for the 2007 and 2008 tax years. There may be differing interpretations of tax laws and regulations, and as a result, disputes may arise with these tax authorities involving the timing and amount of deductions and allocation of income.

The Company recognizes interest and penalties related to unrecognized tax benefits in the provision for income taxes for all periods presented. Such interest and penalties were not significant for the years ended December 31, 2012, 2011 and 2010.