2.0.0.10 false Income Taxes 0205 - Disclosure - Income Taxes true false false false 1 usd $ false false Shares Standard http://www.xbrl.org/2003/instance shares xbrli 0 USD Standard http://www.xbrl.org/2003/iso4217 USD iso4217 0 USDEPS Divide http://www.xbrl.org/2003/iso4217 USD iso4217 http://www.xbrl.org/2003/instance shares xbrli 0 2 Income Taxes [Abstract] 0 us-gaap_IncomeTaxExpenseBenefitAbstract us-gaap true na duration string No definition available. false false false false false true false false false false false false 1 false false false false 0 0 false false false No definition available. false 3 INCOME TAXES 1 us-gaap_IncomeTaxDisclosureTextBlock us-gaap true na duration string No definition available. false false false false false false false false false false false verboselabel false 1 false false false false 0 0   <div style="font-family: 'Times New Roman',Times,serif"> <div align="justify" style="font-size: 12pt; margin-top: 12pt"><b>(5)</b>      <b>INCOME TAXES</b> </div> <div align="justify" style="font-size: 12pt; margin-top: 12pt">          We consider earnings of certain foreign subsidiaries to be permanently reinvested, and as such, we have not provided for any U.S. federal or state income taxes on these earnings. Our overall tax provision is affected by the mix of our operations within various taxing jurisdictions; accordingly, there is limited correlation between income before income taxes and the income tax provision or benefit. The majority of our non-US based operations are subject to foreign tax systems that provide significant incentives to qualified shipping activities. Our United Kingdom (“UK”) and Norway based vessels are taxed under “tonnage tax” regimes with the UK regime being a ten year election, which we will renew in 2010. Our qualified Singapore based vessels are exempt from Singapore taxation through December 2017 with extensions available in certain circumstances beyond 2017. The tonnage tax regimes provide for a tax based on the net tonnage weight of a qualified vessel. These foreign tax beneficial structures continued to result in our earnings incurring significantly lower taxes than those that would apply if we were not a qualified shipping company in those jurisdictions. During the three months ended March 31, 2010, our income was derived principally from lower tax jurisdictions. </div> <div align="justify" style="font-size: 12pt; margin-top: 12pt">          As previously announced, in February 2010 the Norwegian Supreme Court ruled unconstitutional the 2007 legislation to begin taxing previously untaxed pre-2007 tonnage tax profits. This decision is a change in tax law and, accordingly, we recorded a $15.0 million discrete tax benefit in our tax provision for the quarter ended March 31, 2010 to reflect the elimination of this previously recorded income tax liability. Norway’s Ministry of Finance (“MoF”) has publicly stated that new legislation regarding pre-2007 tonnage tax profits will be forthcoming as part of Norway’s revised 2010 budget process, which is projected to be finalized and become law in the second quarter of 2010. At that time we expect that we may have to record a deferred income tax liability. </div> <div align="justify" style="font-size: 12pt; margin-top: 12pt">          Our operations in Mexico are subject to a revenue based Flat Tax, or IETU, which generally functions as an alternative minimum corporate tax payable to the extent that the new revenue based tax exceeds the current income tax liability. We have determined that the IETU is our Mexican current tax liability and it is more likely than not we will not realize any economic benefit from the future utilization of our Mexican tax loss carryforwards and, accordingly, we provide a net valuation allowance related to such carryforwards. </div>   </div>  <div style="font-family: 'Times New Roman',Times,serif"> <div align="justify" style="font-size: 12pt; margin-top: 12pt">          Our income tax expense for the first quarter of 2010, including the $15.0 million Norwegian tax reversal, was a benefit of $15.7 million. Excluding unusual items, we recorded a tax benefit of $0.5 million, and this results in a beneficial effective tax rate of 9.4%. This compares to a 6.3% effective tax rate provision in the first quarter of 2009 (also excluding unusual items). The decrease in the effective tax rate from the prior year is a result of the decrease in profitability in the higher tax rate jurisdictions in which we operate. Since the first quarter of 2009, pre-tax income has decreased substantially in the U.S., and this resulted in a lower overall effective tax rate. </div> </div>  <!-- Begin Block Tagged Note false false false Description containing the entire income tax disclosure. 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