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INCOME TAXES (Tables)
12 Months Ended
Dec. 31, 2012
Income From Continuing Operations Before Income Taxes and Equity in Income (Losses) of Investees

Income from continuing operations, before income taxes and equity in income (losses) of investees consisted of:

 

     Year Ended December 31,  
     2012     2011     2010  
     (Dollars in thousands)  

U.S.

   $ (283,242   $ (32,797   $ (3,715

Non-U.S. (foreign)

     76,248     $ 39,567     $ 34,497  
  

 

 

   

 

 

   

 

 

 
   $ (206,994   $ 6,770     $ 30,782  
  

 

 

   

 

 

   

 

 

 
Components of Income Tax Provision (Benefit)

The components of income tax provision (benefit) are as follows:

 

     Year Ended December 31,  
     2012     2011     2010  
     (Dollars in thousands)  

Current:

      

State

   $ (768 )   $ 135     $ 115  

Foreign

     8,595       10,339       10,926  
  

 

 

   

 

 

   

 

 

 
   $ 7,827     $ 10,474     $ 11,041  
  

 

 

   

 

 

   

 

 

 

Deferred:

      

Federal

     (23,903     38,566       (15,863

State

     (44 )     (2,099     1,062  

Foreign

     12,620       1,594       2,662  
  

 

 

   

 

 

   

 

 

 
     (11,327 )     38,061       (12,139
  

 

 

   

 

 

   

 

 

 
   $ (3,500 )   $ 48,535     $ (1,098
  

 

 

   

 

 

   

 

 

 
Significant Components of Deferred Income Tax Expense (Benefit)

The significant components of the deferred income tax expense (benefit) are as follows:

 

     Year Ended December 31,  
     2012     2011     2010  
     (Dollars in thousands)  

Deferred tax expense (exclusive of the effect of other components listed below)

   $ 23,802      $ 4,045     $ 16,047  

Write-off of power plants

     (90,720              

Usage (benefit) of operating loss carryforwards — U.S.

     26,907       (35,575     (45,540

Change in valuation allowance

     10,286       61,500       433  

Change in foreign income tax

     8,257       5,041       9,008  

Change in lease transaction

     1,170       1,027       769  

Change in tax monetization transaction

     5,353       (4,975     8,690  

Change in intangible drilling costs

     14,133       18,592       12,497  

Benefit of production tax credits and alternative minimum tax credits

     (10,515 )     (11,594     (14,043
  

 

 

   

 

 

   

 

 

 

Total

   $ (11,327 )   $ 38,061     $ (12,139
  

 

 

   

 

 

   

 

 

 

Difference Between US Federal Statutory Tax Rate And Company's Effective Tax Rate

The difference between the U.S. federal statutory tax rate and the Company’s effective tax rate are as follows:

 

     Year Ended December 31,  
     2012     2011     2010  

U.S. federal statutory tax rate

     35.0      35.0      35.0 

Valuation allowance

     (5.0 )     908.5        

State income tax, net of federal benefit

     4.1       (22.9     3.2  

Effect of foreign income tax, net

     2.7       (28.3     4.5  

Production tax credits

     5.1       (171.3     (45.7

Dividends from foreign subsidiaries

     (40.2              

Depletion

     0.3       (12.0      

Other, net

     (0.3 )     7.9       (0.7
  

 

 

   

 

 

   

 

 

 

Effective tax rate

     1.7      716.9      (3.7 )% 
  

 

 

   

 

 

   

 

 

 
Net Deferred Tax Assets and Liabilities

The net deferred tax assets and liabilities consist of the following:

 

     December 31,  
     2012     2011  
     (Dollars in thousands)  

Deferred tax assets (liabilities):

    

Net foreign deferred taxes, primarily depreciation

   $ (43,531 )   $ (35,274

Depreciation

     44,701       (82,847

Intangible drilling costs

     (66,881 )     (52,748

Net operating loss carryforward — U.S.

     103,771       130,678  

Dividends from foreign subsidiaries

     (20,995       

Tax monetization transaction

     (26,470 )     (21,117

Lease transaction

     3,410       4,582  

Investment tax credits

     1,971       1,971  

Production tax credits

     68,954        59,849  

Alternative minimum tax credit

     1,410          

Stock options amortization

     3,072       2,934  

Accrued liabilities and other

     653       649  
  

 

 

   

 

 

 
     70,065        8,677  

Less — valuation allowance

     (80,890     (61,500
  

 

 

   

 

 

 

Total

   $ (10,825 )   $ (52,823
  

 

 

   

 

 

 
Reconciliation Of Beginning And Ending Valuation Allowance

The following table presents a reconciliation of the beginning and ending valuation allowance:

 

     Year Ended December 31,  
      2012      2011      2010  
     (Dollars in thousands)  

Balance at beginning of the year

   $ 61,500      $ 433      $  

Additions to deferred income tax expense

     19,390         61,067        433  
  

 

 

    

 

 

    

 

 

 

Balance at end of the year

   $ 80,890      $ 61,500      $ 433  
  

 

 

    

 

 

    

 

 

 
Balance Sheet Presentation of Deferred Taxes

The following table presents the deferred taxes on the balance sheets as of the dates indicated:

 

     December 31  
     

    2012    

   

    2011    

 
     (Dollars in thousands)  

Current deferred tax assets

   $ 637      $ 1,842   

Current deferred tax liabilities

     (20,392       

Non-current deferred tax assets

     53,989          

Non-current deferred tax liabilities

     (45,059     (54,665
  

 

 

   

 

 

 
   $ (10,825   $ (52,823
  

 

 

   

 

 

 
Reconciliation of Beginning and Ending Amounts of Unrecognized Tax Benefits

A reconciliation of the beginning and ending amounts of unrecognized tax benefits is as follows:

 

     Year Ended December 31,  
     2012      2011     2010  
     (Dollars in thousands)  

Balance at beginning of year

   $ 5,875      $ 5,431     $ 4,931  

Additions based on tax positions taken in prior years

     1,381        1,207       823  

Additions based on tax positions taken in the current year

     25        612       260  

Reduction based on tax positions taken in prior years

            (1,375     (583
  

 

 

    

 

 

   

 

 

 

Balance at end of year

   $ 7,281      $ 5,875     $ 5,431  
  

 

 

    

 

 

   

 

 

 
Foreign Subsidiaries Income Tax Years Open to Examination

The Company’s foreign subsidiaries remain open to examination by the local income tax authorities in the following countries for the years indicated:

 

Israel

     2009 — 2012   

Nicaragua

     2009 — 2012   

Kenya

     2000 — 2012   

Guatemala

     2008 — 2012   

Philippines

     2008 — 2012   

New Zealand

     2008 — 2012