Federal Income Taxes

9 Months Ended

Sep. 30, 2011

Federal Income Taxes

Federal Income Taxes

10.   Federal Income Taxes

The provision for income taxes from continuing operations for the three and nine-month periods ended September 30, 2011 and 2010 is comprised of the following:

	Three months ended					Nine months ended
	September 30,					September 30,
	2011		2010			2011		2010
Current	$	7,814	$	(22,543	)	$	53,332	$	(5,250	)
Deferred	18,210		38,899			29,583		67,859
Total income tax provision	$	26,024	$	16,356		$	82,915	$	62,609

The following table presents a reconciliation between the statutory federal income tax rate and the Company’s effective federal income tax rate from continuing operations for the nine months ended September 30, 2011 and 2010:

	Nine months ended September 30,
	2011		2010
Statutory federal income tax rate	35.0	%	35.0	%
Income tax effect of:
Investment income not subject to federal tax	(2.3	)%	(2.2	)%
Tax credits	(1.9	)%	(3.3	)%
State income taxes, net of federal benefit	1.2	%	0.9	%
Income tax contingency provisions	(1.0	)%	(2.8	)%
Prior period adjustments	0.0	%	2.0	%
Other, net	(0.2	)%	(0.4	)%
Effective federal income tax rate	30.8	%	29.2	%

During the nine months ended September 30, 2011, the Company recorded a decrease in unrecognized tax benefits in the amount of $2,409.  The Company anticipates an increase in the range of $2,000 to $4,000 to unrecognized tax benefits within the next twelve months due to changes in the composition of the consolidated group.  Due to the impact of deferred tax accounting, the majority of the increase in unrecognized tax benefits does not affect the effective tax rate.

The Company files income tax returns in the U.S. federal jurisdiction and with various states.  With few exceptions, the Company is no longer subject to U.S. federal, state and local income tax examinations by taxing authorities for years 2007 and prior.  Tax years 2008, 2009 and 2010 are open to federal examination by the Internal Revenue Service.  The Company does not expect significant increases or decreases to unrecognized tax benefits relating to federal, state or local audits.