Annual report pursuant to Section 13 and 15(d)

INCOME TAXES (Tables)

v2.4.0.6
INCOME TAXES (Tables)
12 Months Ended
Dec. 31, 2012
Components of Income Before Income Taxes

The components of income from continuing operations before income taxes are as follows (in thousands):

 

      Year Ended December 31,  
     2012      2011      2010  

Income from continuing operations before income taxes:

        

Domestic

   $ 390,734      $ 181,520       $ 215,263   

Foreign

     73,846         11,988         18,695   
  

 

 

    

 

 

    

 

 

 

Total

   $ 464,580       $ 193,508       $ 233,958   
  

 

 

    

 

 

    

 

 

Provision for Income Taxes

The components of the provision for income taxes for continuing operations are as follows (in thousands):

 

      Year Ended December 31,  
     2012      2011     2010  

Current:

       

Federal

   $  109,272       $ 42,874      $ 39,818   

State

     12,397         11,998        9,650   

Foreign

     14,657         7,668        6,260   
  

 

 

    

 

 

   

 

 

 

Total current tax provision

     136,326         62,540        55,728   
  

 

 

    

 

 

   

 

 

 

Deferred:

       

Federal

     16,134         4,487        31,539   

State

     1,627         965        2,062   

Foreign

     4,772         (4,896     (445
  

 

 

    

 

 

   

 

 

 

Total deferred tax provision

     22,533         556        33,156   
  

 

 

    

 

 

   

 

 

 

Total provision for income taxes

   $ 158,859       $ 63,096      $ 88,884  
Effective Income Tax Rate Reconciliation

The actual income tax provision differs from the income tax provision computed by applying the U.S. federal statutory corporate rate to income from continuing operations before provision for income taxes as follows (in thousands):

 

     Year Ended December 31,  
     2012     2011     2010  

Provision at the statutory rate

   $  162,603      $ 67,727      $ 81,885   

Increases (decreases) resulting from —

      

State taxes

     10,980        6,375        8,058   

Foreign taxes

     (5,841     (2,815     182   

Contingency reserves, net

     (3,880     (7,262     (4,184

Production activity deduction

     (7,081     (2,394     (2,650

Employee per diems, meals and entertainment

     6,441        4,149        4,725   

Taxes on unincorporated joint ventures

     (5,609     (4,142     (833

Other

     1,246        1,458        1,701   
  

 

 

   

 

 

   

 

 

 
   $ 158,859      $ 63,096      $ 88,884
Deferred Tax Assets and Liabilities

Deferred income taxes result from temporary differences in the recognition of income and expenses for financial reporting purposes and tax purposes. The tax effects of these temporary differences, representing deferred tax assets and liabilities, result principally from the following (in thousands):

 

     December 31,  
     2012     2011  

Deferred income tax liabilities —

    

Property and equipment

   $ (205,977   $ (204,918

Goodwill

     (48,201     (43,057

Other intangibles

     (46,661     (54,206

Book/tax accounting method difference

     (45,159     (27,924
  

 

 

   

 

 

 

Total deferred income tax liabilities

     (345,998     (330,105
  

 

 

   

 

 

 

Deferred income tax assets —

    

Accruals and reserves

     33,357        40,619   

Accrued insurance

     53,163        55,169   

Deferred revenue

     16,259        14,243   

Net operating loss carryforwards

     17,115        15,615   

Other

     20,540        13,140   
  

 

 

   

 

 

 

Subtotal

     140,434        138,786   

Valuation allowance

     (9,344     (8,783
  

 

 

   

 

 

 

Total deferred income tax assets

     131,090        130,003   
  

 

 

   

 

 

 

Total net deferred income tax liabilities

   $ (214,908   $ (200,102
  

 

 

   

 

 

 
Net Deferred Income Tax Assets and Liabilities

The net deferred income tax assets and liabilities are comprised of the following (in thousands):

 

     December 31,  
     2012     2011  

Current deferred income taxes:

    

Assets

   $ 41,961      $ 51,373   

Liabilities

     (31,819     (17,831
  

 

 

   

 

 

 
     10,142        33,542   
  

 

 

   

 

 

 

Non-current deferred income taxes:

    

Assets

     89,129        78,630   

Liabilities

     (314,179     (312,274
  

 

 

   

 

 

 
     (225,050     (233,644
  

 

 

   

 

 

 

Total net deferred income tax liabilities

   $ (214,908   $ (200,102
  

 

 

   

 

 

 
Reconciliation of Unrecognized Tax Benefit

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

 

     December 31,  
     2012     2011     2010  

Balance at beginning of year

   $ 47,379      $ 50,632      $ 45,201   

Additions based on tax positions related to the current year

     15,411        10,133        10,602   

Additions for tax positions of prior years

     1,607        131        5,183   

Reductions for tax positions of prior years

     (293              

Reductions for audit settlements

     (895     (4,877     (93

Reductions resulting from a lapse of the applicable statutes of limitations

     (11,965     (8,640     (10,261
  

 

 

   

 

 

   

 

 

 

Balance at end of year

   $ 51,244      $ 47,379      $ 50,632   
  

 

 

   

 

 

   

 

 

 
Balances of Unrecognized Tax Benefits

The balances of unrecognized tax benefits, the amount of related interest and penalties and what Quanta believes to be the range of reasonably possible changes in the next 12 months are as follows (in thousands):

 

     December 31,  
     2012      2011      2010  

Unrecognized tax benefits

   $ 51,244       $ 47,379       $ 50,632   

Portion that, if recognized, would reduce tax expense and effective tax rate

     43,910         39,824         43,077   

Accrued interest on unrecognized tax benefits

     6,088         7,180         6,524   

Accrued penalties on unrecognized tax benefits

     127         163         163   

Reasonably possible reduction to the balance of unrecognized tax benefits in succeeding 12 months

   $ 0 to $11,479       $ 0 to $12,110       $ 0 to $8,786   

Portion that, if recognized, would reduce tax expense and effective tax rate

   $ 0 to $9,645       $ 0 to $10,221       $ 0 to $6,896