[6] Income Taxes

(Loss) income before taxes is summarized as follows:

	U.S.			Foreign
Year ended December 31,	Operations			Operations			Total
	(in thousands)
2012	$	(271,683	)	$	3,841		$	(267,842	)
2011	$	133,501		$	3,546		$	137,047
2010	$	159,474		$	(6	)	$	159,468

The (benefit) provision for income taxes is as follows:

	Year ended December 31,
	2012			2011			2010
	(in thousands)
Current expense:
Federal	$	19,573		$	30,848		$	49,873
State		3,508			6,303			9,528
Foreign		1,542			1,325			175
Total current		24,623			38,476			59,576

Deferred (benefit) expense:
Federal		(28,157	)		16,351			(2,464	)
State		1,104			(3,718	)		(983	)
Foreign		(12	)		(210	)		(161	)
Total deferred		(27,065	)		12,423			(3,608	)
Total (benefit) provision	$	(2,442	)	$	50,899		$	55,968

The table is a reconciliation of the Company's provision (benefit) for income taxes at the statutory rates to the provision (benefit) for income taxes at the Company's effective rate.

	2012						2011					2010
	Amount			Rate			Amount		Rate			Amount			Rate
	(dollars in thousands)
Federal income expense (benefit) at statutory tax rate		(93,745	)		35.0	%	$	47,963		35.0	%	$	55,814			35.0	%
State income taxes, net of federal tax benefit		3,214			(1.2	)		2,529		1.8			5,060			3.2
Officers' compensation		1,473			(0.6	)		224		0.2			495			0.3
Goodwill Impairment		89,191			(33.3	)		-		-			-			-
Other		(2,575)			1.0	%		183		0.1			(5,401	)		(3.4	)
(Benefit) provision for income taxes	$	(2,442	)		0.9	%	$	50,899		37.1	%	$	55,968			35.1	%

The Company's provision for income taxes and effective tax rate for the year ended December 31, 2012 were significantly impacted by the goodwill and intangible asset impairment charge discussed in Note 4 – Goodwill and Other Intangible Assets above. Of the total goodwill and intangible asset impairment charge of $376.6 million, approximately $255.0 million pertained to goodwill that had no corresponding tax basis. The tax effect of the impairment charge resulted in a reduction in the Company's provision for income taxes of approximately $50.2 million in 2012.

The Company's 2010 U.S. Federal tax return is currently being audited by the Internal Revenue Service. The Company currently does not expect any material adjustments to arise from this audit.

The following is a summary of the significant components of the deferred tax assets and liabilities:

	December 31,
	2012			2011
	(in thousands)
Deferred Tax Assets
Timing of expense recognition	$	28,448		$	39,830
Net operating losses		5,517			5,440
Other, net		8,763			1,219
Deferred tax assets		42,728			46,489
Valuation Allowance		(2,817	)		-
Net deferred tax assets		39,911			46,489

Deferred Tax Liabilities
Intangible assets, due primarily to purchase accounting		(26,768	)		(73,020	)
Fixed assets, due primarily to purchase accounting		(76,095	)		(66,406	)
Construction contract accounting		(5,613	)		(4,910	)
Joint ventures - construction		(7,038	)		(4,276	)
Other		(390	)		38
Deferred tax liabilities		(115,904	)		(148,574	)

Net deferred tax liability	$	(75,993	)	$	(102,085	)

The net deferred tax liability is classified in the Consolidated Balance Sheets based on when the future benefit (expense) is expected to be realized as follows:

	December 31,
	2012			2011
	(in thousands)
Current deferred tax asset	$	10,071		$	-
Long-Term deferred tax asset		29,840			-
Current deferred tax liability		(6,004	)		(4,164	)
Long-term deferred tax liability		(109,900	)		(97,921	)
Net deferred tax liability		(75,993	)		(102,085	)

At December 31, 2012, the Company had a valuation allowance of $2.8 million for federal and state capital loss carryforwards as the ultimate utilization of this item was less than "more likely than not". The valuation allowance increased in the current year by $2.8 million due to the capital losses realized on the sale of auction rate securities.

In general, it is the practice and intention of the Company to reinvest the earnings of its non-U.S. subsidiaries in those operations. Generally, such amounts become subject to U.S. taxation upon the remittance of dividends and under certain other circumstances. As of December 31, 2012 and 2011, unremitted earnings of foreign subsidiaries, which have been or are intended to be permanently invested, aggregated approximately $14.3 million and $15.3 million, respectively. It is not practicable to estimate the amount of deferred tax liability related to investments in these foreign subsidiaries.

The Company adopted the provisions of FASB ASC740-10, Income Taxes, Accounting for Uncertainty in Income Taxes, in the first quarter of 2007. It is the Company's policy to record any accrued interest and penalties as part of the income tax provision. During 2010, the Company recognized a net decrease of $0.2 million in liabilities. The amount of gross unrecognized tax benefits as of December 31, 2010 is $1.2 million. Included in this liability is $0.1 million of related interest net of federal tax benefits. During 2011, the Company recognized a net increase of $0.9 million in liabilities. The amount of gross unrecognized tax benefits as of December 31, 2011 is $2.0 million. Included in this liability is $0.1 million of related interest net of federal tax benefits. During 2012, the Company recognized a net increase of $2.0 million in liabilities. The amount of gross unrecognized tax benefits as of December 31, 2012 is $4.0 million. Included in this liability is $0.2 million of related interest net of federal tax benefits. The Company does not expect any significant release of unrecognized tax benefits within the next twelve months.

A reconciliation of the beginning and ending amount of the gross unrecognized tax benefit is as follows (in thousands):

Gross unrecognized tax benefit balance at January 1, 2010:	$	1,308
Add:
Additions based on tax positions related to current year		-
Additions/reductions for tax positions of prior years		56
Less:
Reductions for tax positions of prior years (expiration of statute of limitations)		(214	)
Gross unrecognized tax benefit balance at December 31, 2010:	$	1,150

Gross unrecognized tax benefit balance at January 1, 2011:	$	1,150
Add:
Additions based on tax positions related to current year	$	875
Additions/reductions for tax positions of prior years		47
Less:
Reductions based on tax positions of prior years (expiration of statute of limitations)		(29	)
Gross unrecognized tax benefit balance at December 31, 2011:	$	2,043

Gross unrecognized tax benefit balance at January 1, 2012:	$	2,043
Add:
Additions based on tax positions related to current year		1,281
Additions/reductions for tax positions of prior years		1,857
Less:
Reductions for tax positions of prior years (expiration of statute of limitations)		(1,158	)
Gross unrecognized tax benefit balance at December 31, 2012:	$	4,023

The company records interest and penalties related to unrecognized tax benefit in income tax expenses. Interest of $0.2 million was recorded during 2012.