Income Tax (Tables)

12 Months Ended

Dec. 31, 2012

Income Tax

Summary of components of the provision for income tax expense (benefit)

The components of the provision for income tax expense (benefit) are as follows (in thousands):

	Year ended December 31,
	2012			2011			2010
Current income tax (benefit) expense:
Federal	$	(2,964	)	$	15,039		$	5,850
State		598			2,539			1,805
Total current		(2,366	)		17,578			7,655
Deferred income tax expense (benefit):
Federal		38,531			(4,732	)		(3,870	)
State		2,163			803			(596	)
Total deferred		40,694			(3,929	)		(4,466	)
Provision for income tax	$	38,328		$	13,649		$	3,189

Reconciliation of the provision for income tax to the amount computed by applying the federal statutory rate

A reconciliation of the provision for income tax and the amount computed by applying the federal statutory rate of 35% to the income before income taxes for the years ended December 31, 2012, 2011 and 2010 is as follows (in thousands):

Year ended December 31, 2012:

	Corporation			Partnership			Eliminations			Consolidated
Income before provision for income tax.	$	74,192		$	180,640		$	2,284		$	257,116
Federal statutory rate		35	%		0	%		0	%
Federal income tax at statutory rate		25,967			—			—			25,967
Permanent items		28			—			—			28
State income taxes net of federal benefit		688			1,689			—			2,377
Current year change in valuation allowance		(5	)		—			—			(5	)
Prior period adjustments and tax rate changes		(2,517	)		—			—			(2,517	)
Provision on income from Class A units(1)		12,412			—			—			12,412
Other		66			—			—			66
Provision for income tax	$	36,639		$	1,689		$	—		$	38,328

Year ended December 31, 2011:

	Corporation			Partnership			Eliminations			Consolidated
Income before provision for income tax.	$	3,813		$	124,087		$	(8,006	)	$	119,894
Federal statutory rate		35	%		0	%		0	%
Federal income tax at statutory rate		1,335			—			—			1,335
Permanent items		36			—			—			36
State income taxes net of federal benefit		102			2,742			—			2,844
Current year change in valuation allowance		(64	)		—			—			(64	)
Prior period adjustments and tax rate changes		163			—			—			163
Provision on income from Class A units(1)		9,323			—			—			9,323
Other		12			—			—			12
Provision for income tax	$	10,907		$	2,742		$	—		$	13,649

Year ended December 31, 2010:

	Corporation			Partnership			Eliminations			Consolidated
(Loss) income before provision for income tax	$	(8,120	)	$	47,761		$	(5,350	)	$	34,291
Federal statutory rate		35	%		0	%		0	%
Federal income tax at statutory rate		(2,842	)		—			—			(2,842	)
Permanent items		20			—			—			20
State income taxes net of federal benefit		(272	)		1,299			—			1,027
Current year change in valuation allowance		(1,022	)		—			—			(1,022	)
Prior period adjustments and tax rate changes		70			—			—			70
Provision on income from Class A units(1)		5,753			—			—			5,753
Other		183			—			—			183
Provision for income tax	$	1,890		$	1,299		$	—		$	3,189

(1)

The Corporation and the General Partner own Class A units of the Partnership that were received in the merger of the Corporation and the Partnership completed in February 2008. The Class A units share, on a pro-rata basis, in income or loss of the Partnership, except for items attributable to the Partnership's ownership or sale of shares of the Corporation's common stock (as discussed in Note 2). The provision for income tax on income from Class A units includes intra period allocations to continued operations and excludes allocations to equity.

Schedule of deferred tax assets and liabilities resulting from temporary book-tax differences

The deferred tax assets and liabilities resulting from temporary book-tax differences are comprised of the following (in thousands):

	December 31,
	2012			2011
Current deferred tax assets:
Accruals and reserves	$	98		$	78
Derivative instruments		5,183			14,807
Current deferred tax assets		5,281			14,885
Long-term deferred tax assets:
Accruals and reserves		113			48
Derivative instruments		9,915			20,301
Phantom unit compensation		2,624			2,103
Capital loss carryforward		904			971
State net operating loss carryforward		1			101
Long-term deferred tax assets		13,557			23,524
Valuation allowance		(904	)		(977	)
Net long-term deferred tax assets		12,653			22,547
Long-term deferred tax liabilities:
Property, plant and equipment and intangibles		3,861			2,123
Investment in affiliated groups		200,110			114,088
Long-term deferred tax liabilities		203,971			116,211
Long-term subtotal		(191,318	)		(93,664	)
Net deferred tax liability	$	(186,037	)	$	(78,779	)