Income Taxes (Tables)

12 Months Ended

Dec. 31, 2012

Components of earnings from continuing operations before income taxes

The components of earnings from continuing operations before income taxes and the provision for income taxes from continuing operations were as follows:



	Years ended December 31,
	2012			2011	2010
	(In thousands)
Earnings from continuing operations before income taxes:
United States	$	241,672		223,209	156,123
Foreign	61,445			56,178	30,182
Total	$	303,117		279,387	186,305
Current tax expense (benefit) from continuing operations:
Federal ⁽¹⁾	$	(4,157	)	1,615	4,536
State ⁽¹⁾	11,514			7,785	4,468
Foreign	7,759			8,603	11,596
	15,116			18,003	20,600
Deferred tax expense (benefit) from continuing operations:
Federal	77,819			67,849	38,179
State	3,871			17,247	7,198
Foreign	5,412			4,920	(4,280	)
	87,102			90,016	41,097
Provision for income taxes from continuing operations	$	102,218		108,019	61,697

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(1)	Excludes federal and state tax benefits resulting from the exercise of stock options and vesting of restricted stock awards, which were credited directly to “Additional paid-in capital.”

Reconciliation of federal statutory tax rate with effective tax rate

A reconciliation of the federal statutory tax rate with the effective tax rate from continuing operations follows:



	Years ended December 31,
	2012		2011		2010
	(Percentage of pre-tax earnings)
Federal statutory tax rate	35.0		35.0		35.0
Impact on deferred taxes for changes in tax rates	0.5		2.6		0.4
State income taxes, net of federal income tax benefit	4.4		3.9		4.6
Tax reviews and audits	(2.9	)	(0.9	)	(7.0	)
Miscellaneous items, net	(3.3	)	(1.9	)	0.1
Effective tax rate	33.7		38.7		33.1

Changes in tax laws on net earnings from continuing operations and net earnings per diluted common share

The following provides a summary of the impact of changes in tax laws on net earnings from continuing operations by tax jurisdiction:



Tax Jurisdiction	Enactment Date	Net Earnings
		(in thousands)
2012
United Kingdom	July 17, 2012	$(856)
Canada	June 20, 2012	$(671)

2011
State of Michigan	May 25, 2011	$(5,350)
State of Illinois	January 13, 2011	$(1,221)

2010
United Kingdom	July 27, 2010	$400

Components of deferred income tax assets and liabilities

The components of the net deferred income tax liability were as follows:



	December 31,
	2012			2011
	(In thousands)
Deferred income tax assets:
Self-insurance accruals	$	52,177		37,296
Net operating loss carryforwards	258,808			275,124
Alternative minimum taxes	9,679			9,679
Accrued compensation and benefits	61,095			67,323
Federal benefit on state tax positions	17,925			18,847
Pension benefits	204,069			179,159
Miscellaneous other accruals	39,708			38,588
	643,461			626,016
Valuation allowance	(38,182		)	(41,324	)
	605,279			584,692
Deferred income tax liabilities:
Property and equipment bases difference	(1,734,508		)	(1,649,494	)
Other items	(18,716		)	(25,265	)
	(1,753,224		)	(1,674,759	)
Net deferred income tax liability ⁽¹⁾	$	(1,147,945	)	(1,090,067	)

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(1)	Deferred tax assets of $29 million and $31 million have been included in “Prepaid expenses and other current assets” at December 31, 2012 and 2011, respectively.

Unrecognized tax benefits

The following table summarizes the activity related to unrecognized tax benefits (excluding the federal benefit received from state positions):



	December 31,
	2012			2011		2010
	(In thousands)
Balance at January 1	$	62,247		61,236		69,494
Additions based on tax positions related to the current year	3,980			3,776		4,233
Settlements	—			—		(8,280	)
Reductions due to lapse of applicable statute of limitations	(13,956		)	(2,765	)	(4,211	)
Gross balance at December 31	52,271			62,247		61,236
Interest and penalties	5,319			6,933		5,858
Balance at December 31	$	57,590		69,180		67,094

- Definition

Tabular disclosure of tax positions taken in the tax returns filed or to be filed for which it is more likely than not that the tax position will not be sustained upon examination by taxing authorities (i.e., uncertain tax positions) and other types of income tax contingencies, including: (1) the policy on classification of interest and penalties; (2) a tabular reconciliation of the total amounts of unrecognized tax benefits at the beginning and end of the period; the total amount(s) of: (3) unrecognized tax benefits that, if recognized, would affect the effective tax rate, and (4) interest and penalties recognized in each of the income statement and balance sheet; (5) for positions for which it is reasonably possible that the total amounts unrecognized will significantly change within 12 months of the reporting date the: (i) nature of the uncertainty, (ii) nature of the event that could occur that would cause the change, and (iii) an estimate of the range of the reasonably possible change or a statement that an estimate of the range cannot be made; and (6) a description of tax years that remain subject to examination by major tax jurisdictions.

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