Income Taxes

12 Months Ended

Dec. 31, 2011

Income Taxes [Abstract]

Income Taxes

20.  Income Taxes

The (provision) benefit for income taxes is comprised of the following (dollars in thousands):

	For the Years Ended December 31,
	2011			2010			2009
Federal:
Current	$	631		$	626		$	2,795
Deferred		(943	)		33,235			31,684
Total Federal		(312	)		33,861			34,479
State:
Current		(2,028	)		(2,429	)		(1,553	)
Deferred (included in Federal above)		―			―			―
Total State		(2,028	)		(2,429	)		(1,553	)
Total	$	(2,340	)	$	31,432		$	32,926

A reconciliation of the (provision) benefit for income taxes to the amount computed at the U.S. Federal statutory rate of 35% is as follows (dollars in thousands):

	For the Years Ended December 31,
	2011			2010			2009
Tax benefit at U.S. statutory rate	$	23,042		$	28,117		$	34,713
Credits		4,803			3,354			2,088
State taxes, net of federal income tax		1,316			1,634			3,002
Gain on acquisition		791			—			—
Unrecognized tax benefits		630			626			1,892
Other, net		59			(124	)		(75	)
Stock compensation		—			(137	)		(5,550	)
Valuation allowance		(30,489	)		(137	)		(973	)
Return to provision		(1,302	)		679			241
Officer’s compensation		(760	)		(2,197	)		(2,147	)
Meals and entertainment		(430	)		(383	)		(265	)
Total	$	(2,340	)	$	31,432		$	32,926

Significant components of the Company’s deferred tax assets and liabilities at December 31 are as follows (dollars in thousands):

	2011			2010
Deferred income tax assets:
Operating loss carryforwards	$	174,433		$	165,617
Capital lease obligations		62,136			70,407
Deferred lease liability		48,916			44,097
Prepaid revenue		48,587			48,713
Accrued expenses		40,422			46,111
Tax credits		20,158			13,548
Deferred gain on sale leaseback		11,581			13,035
Fair value of interest rate swaps		152			—
Total gross deferred income tax asset		406,385			401,528
Valuation allowance		(40,820	)		(10,845	)
Net deferred income tax assets		365,565			390,683
Deferred income tax liabilities:
Property, plant and equipment		(454,985	)		(478,023	)
Fair value of interest rate swaps		—			(516	)
Other		(11,540	)		(10,571	)
Total gross deferred income tax liability		(466,525	)		(489,110	)
Net deferred tax liability	$	(100,960	)	$	(98,427	)

A reconciliation of the net deferred tax liability to the consolidated balance sheets at December 31 is as follows (dollars in thousands):

	2011			2010
Deferred tax asset – current	$	11,776		$	15,529
Deferred tax liability – noncurrent		(112,736	)		(113,956	)
Net deferred tax liability	$	(100,960	)	$	(98,427	)

As of December 31, 2011 and 2010, the Company had net operating loss carryforwards of approximately $461.5 million and $427.8 million, respectively, which are available to offset future taxable income through 2031.  The Company concluded that the additional benefits generated during 2011 did not meet the more likely than not criteria for realization.  The conclusion was determined solely based on the reversal of current timing differences and did not consider future taxable income to be generated by the Company.  Therefore, the Company has recorded a valuation allowance of $23.0 million against federal net operating losses at December 31, 2011.  The Company continues to maintain that the deferred tax assets recorded as of December 31, 2010, primarily related to net operating losses generated prior to December 31, 2010, are more likely than not to be realized based on the reversal of deferred tax liabilities recorded.  

The Company has recorded valuation allowances of $9.7 million and $8.6 million at December 31, 2011 and 2010, respectively against its state net operating losses, as the Company anticipates these losses will not be utilized prior to expiration.  The carryforward period for some states is considerably shorter than the period which is allowed for Federal purposes.  The Company also recorded a valuation allowance against federal and state credits of $8.1 million and $2.2 million as of December 31, 2011 and 2010, respectively.  As of December 31, 2011 and 2010, the Company had $26.9 million and $15.2 million, respectively, included in its net operating loss carryforward relating to restricted stock grants. Under ASC 718-10, this loss will be recorded in additional paid-in capital in the period in which the loss is effectively used to reduce taxes payable.

The formation of BSL, reorganization of Alterra, and the acquisitions of ARC and SALI constitute ownership changes under Section 382 of the Internal Revenue Code, as amended. As a result, BSL’s ability to utilize the net operating loss carryforward to offset future taxable income is subject to certain limitations and restrictions.  Furthermore, the Company had an ownership change under Section 382 in May 2010 which resulted in an additional annual limitation to the utilization of the net operating loss in an amount of $92 million.  The Company expects the net operating loss to be fully released before expiration and therefore does not anticipate a financial statement impact as a result of the limitation.

The Company adopted ASC 740 - Income Taxes (“ASC 740”) as of January 1, 2007.  At December 31, 2011, the Company had gross tax affected unrecognized tax benefits of $1.4 million, which, if recognized, would result in an income tax benefit in accordance with ASC 805.  Interest and penalties related to these tax positions are classified as tax expense in the Company’s financial statements.  Total interest and penalties reserved is $0.5 million at December 31, 2011.  Tax returns for years 2008, 2009 and 2010 are subject to future examination by tax authorities.  In addition, certain tax returns are open from 2000 through 2007 to the extent of the net operating losses generated during those periods.  The Company does not expect that unrecognized tax benefits for tax positions taken with respect to 2011 and prior years will significantly change in 2012.

A reconciliation of the unrecognized tax benefits for the year 2011 is as follows (dollars in thousands):

Balance at January 1, 2011	$	1,597
Additions for tax positions related to the current year		76
Additions for tax positions related to prior years		244
Reductions for tax positions related to prior years		(478	)
Balance at December 31, 2011	$	1,439