Note 3 - Income Taxes

9 Months Ended

Sep. 30, 2013

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

Note 3.   Income Taxes

Major components of our income tax provision (benefit) for the three and nine months ended September 30, 2013 and 2012 are as follows (in thousands):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2013			2012			2013			2012
Current:
Federal	$	(5,488	)	$	5,102		$	(1,496	)	$	8,630
State		(153	)		425			20			978
Foreign		114			114			344			344
Total current income tax provision (benefit)		(5,527	)		5,641			(1,132	)		9,952
Deferred:
Deferred income tax provision (benefit)		2,985			(5,627	)		(790	)		(1,930	)
Total income tax provision (benefit)	$	(2,542	)	$	14		$	(1,922	)	$	8,022

With the acquisition of Aurizon, we added a wholly owned Canadian subsidiary. For Canadian tax purposes, the transaction was treated as an acquisition of Aurizon stock, resulting in carryover tax bases of acquired corporate assets. As a result, a net deferred tax liability was recorded for the tax impact of the excess fair market value of assets for GAAP reporting over the Canadian tax bases of those assets. We recorded an initial deferred tax liability of $177.2 million.

As of September 30, 2013 we have a net deferred tax asset in the U.S. of $112.1 million and a net deferred tax liability in Canada of $172.8 million for a consolidated worldwide net deferred tax liability of $60.7 million. Our ability to utilize our deferred tax assets depends on future taxable income generated from operations. For the nine months ended September 30, 2013, there were no circumstances that caused us to change our assessment of the ability to generate future taxable income to realize our deferred tax assets.   It is possible that the valuation allowance on our deferred tax assets will change in the future as a result of the analysis of our long-range forecasts, with a resulting tax provision or benefit.

The current income tax provisions and benefits for the nine months ended September 30, 2013 and 2012 vary from the amounts that would have resulted from applying the statutory income tax rate to pre-tax income primarily due to the effects of U.S. percentage depletion deductions, non-deductible expenses, and non-recognizable losses related to foreign operations during the nine months ended September 30, 2013.