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 |
|
|