Income Taxes (Tables)

12 Months Ended

Dec. 31, 2012

CPE Inc

Income tax disclosures of the Company

Schedule of Income tax provision (benefit) for continuing operations

The income tax expense consisted of the following for the years ended December 31 (in thousands):

	2012		2011			2010
Current:
Federal	$	18,064	$	20,973		$	3,478
State		2,339		1,700			—
Total current	$	20,403	$	22,673		$	3,478
Deferred:
Federal		40,351		(11,261	)		27,961
State		1,859		37			543
Total deferred		42,210		(11,224	)		28,504
Total income tax expense	$	62,614	$	11,449		$	31,982

Schedule of tax effects of temporary differences that result in deferred tax assets and deferred tax liabilities for continuing operations

The tax effects of temporary differences that result in deferred tax assets and deferred tax liabilities consisted of the following at December 31 (in thousands):

	2012			2011
Deferred income tax assets:
Property, plant and equipment	$	30,770		$	62,379
Accrued expense and liabilities		32,484			32,324
Pension and other postretirement benefits		16,761			13,126
Investment in joint venture partnerships		8,450			7,349
Accrued reclamation and mine closure costs		41,854			38,091
Contract rights		31,838			30,679
Tax agreement liability		41,954			61,429
AMT Credit		26,816			24,061
Other		5,263			6,433
Total deferred income tax assets		236,190			275,870
Less valuation allowance		(17,231	)		(33,903	)
Net deferred income tax asset		218,960			241,967
Deferred income tax liabilities:
Inventories		(2,919	)		(3,332	)
Mineral rights		(78,936	)		(67,938	)
Mark-to-market gain		(4,861	)		—
Other		(3,057	)		(341	)
Total deferred income tax liabilities		(89,773	)		(71,611	)
Net deferred income tax assets (liabilities)	$	129,187		$	170,356

Schedule of net deferred income tax assets related to continuing operations as classified in the consolidated balance sheets

        Net deferred income tax assets are classified in the consolidated balance sheets at December 31 as follows (in thousands):

	2012		2011
Net current deferred income tax assets	$	28,112	$	37,528
Net noncurrent deferred income tax assets		101,075		132,828
Net deferred income tax assets	$	129,187	$	170,356

Schedule of reconciliation of effective tax rate of the Company with U.S. federal statutory income tax rate

	2012			2011			2010
United States federal statutory income tax rate		35.0	%		35.0	%		35.0	%
State income taxes, net of federal tax benefit		1.2			0.9			0.4
Percentage depletion deduction		(2.3	)		(3.2	)		(3.0	)
Section 199 domestic manufacturing deduction		(0.6	)		(0.3	)		(0.1	)
Change in valuation allowance		(7.1	)		(25.4	)		9.0
Noncontrolling interest		—			—			(18.9	)
Prior year return-to-actual		0.3			(1.3	)		(0.4	)
Other		0.2			—			(0.1	)
Effective tax rate		26.7	%		5.7	%		21.9	%

CPE Resources

Income tax disclosures of the Company

Schedule of Income tax provision (benefit) for continuing operations

 The income tax expense (benefit) consisted of the following for the years ended December 31 (in thousands):

	2012		2011		2010
Current:
Federal	$	15,467	$	671	$	—
State		2,345		534		—
Total current	$	17,812	$	1,205	$	—
Federal		30,946		17,340		(755	)
State		3,278		1,438		(25	)
Total deferred		34,224		18,778		(780	)
Total income tax expense (benefit)	$	52,036	$	19,983	$	(780	)

Schedule of tax effects of temporary differences that result in deferred tax assets and deferred tax liabilities for continuing operations

      The tax effects of temporary differences that result in deferred tax assets and deferred tax liabilities consisted of the following at December 31 (in thousands):

	2012			2011
Deferred income tax assets:
Property, plant and equipment	$	30,770		$	62,379
Accrued expense and liabilities		32,484			32,324
Pension and other postretirement benefits		16,761			13,126
Investment in joint venture partnerships		8,450			7,349
Accrued reclamation and mine closure costs		41,854			38,091
Contract rights		31,838			30,679
AMT Credit		26,816			24,061
Other		5,261			6,434
Total deferred income tax assets		194,235			214,443
Less valuation allowance		(17,231	)		(33,903	)
Net deferred income tax asset		177,004			180,540
Deferred income tax liabilities:
Inventories		(2,919	)		(3,332	)
Mineral rights		(78,936	)		(67,938	)
Mark-to-market		(4,861	)		—
Other		(3,057	)		(342	)
Total deferred income tax liabilities		(89,773	)		(71,612	)
Net deferred income tax assets (liabilities)	$	87,232		$	108,928

Schedule of net deferred income tax assets related to continuing operations as classified in the consolidated balance sheets

Net deferred income tax assets are classified in the consolidated balance sheets at December 31 as follows (in thousands):

	2012		2011
Net current deferred income tax assets	$	21,096	$	30,648
Net noncurrent deferred income tax assets		66,136		78,280
Net deferred income tax assets	$	87,232	$	108,928

Schedule of reconciliation of effective tax rate of the Company with U.S. federal statutory income tax rate

The effective tax rate is reconciled to the U.S. federal statutory income tax rate for the years ended December 31 as follows:

	2012			2011			2010
United States federal statutory income tax rate		35.0	%		35.0	%		35.0	%
State income taxes, net of federal tax benefit		1.2			0.9			—
Income not taxable to CPE Resources		—			—			(35.0	)
Percentage depletion deduction		(2.6	)		(2.9	)		(0.2	)
Section 199 domestic manufacturing deduction		(0.7	)		(0.3	)		(0.1	)
Change in valuation allowance		(8.1	)		(23.1	)		0.6
Prior year return-to-actual		0.3			(0.6	)		(0.8	)
Other		0.1			0.1			—
Effective tax rate		25.3	%		9.1	%		(0.5	)%