Income Taxes

3 Months Ended

Mar. 31, 2013

Income Taxes

Income Taxes

11. Income Taxes

The income tax expense was $44.1 million and $16.3 million for the three months ended March 31, 2013 and 2012, respectively. The income tax provision consists of U.S. and Ghanaian income and Texas margin taxes.

The components of income (loss) before income taxes were as follows:

	Three Months Ended March 31,
	2013			2012
	(In thousands)
Bermuda	$	(6,777	)	$	(3,168	)
United States	2,370			3,312
Foreign—other	68,592			(21,399		)
Income (loss) before income taxes	$	64,185		$	(21,255	)

Our effective tax rate for the three months ended March 31, 2013 and 2012 was 69% and (77)%, respectively. The effective tax rate for the United States is approximately 37% and 38% for the three months ended March 31, 2013 and 2012, respectively. The effective tax rate for Ghana is approximately 37% and 34% for the three months ended March 31, 2013 and 2012, respectively. The effective tax rate for our other foreign jurisdictions is 0%. Our other foreign jurisdictions have a 0% effective tax rate because they reside in countries with a 0% statutory rate, or we have experienced losses in those countries and have a full valuation allowance reserved against the corresponding net deferred tax assets.

The Company has no material unrecognized income tax benefits.

A subsidiary of the Company files a U.S. federal income tax return and a Texas margin tax return. In addition to the United States, the Company files income tax returns in the countries in which the Company operates. The Company is open to U.S. federal income tax examinations for tax years 2009 through 2012 and to Texas margin tax examinations for the tax years 2008 through 2012. In addition, the Company is open to income tax examinations for years 2004 through 2012 in Ghana.

As of March 31, 2013, the Company had no material uncertain tax positions. The Company’s policy is to recognize potential interest and penalties related to income tax matters in income tax expense, but has had no need to accrue any to date.