Income Taxes

12 Months Ended

Dec. 31, 2012

Income Tax Disclosure [Abstract]

Income Taxes

NOTE 8 – INCOME TAXES

A reconciliation of income tax expense, computed by applying the federal statutory rate to pre-tax income to our effective income tax expense is as follows:

	2012		2011		2010
	(In thousands)
Income tax expense computed by applying the statutory rate	$	13,791	$	111,651	$	83,027
State income tax, net of federal benefit	1,084		8,941		6,030
Statutory depletion and other	1,351		2,543		1,680
Income tax expense	$	16,226	$	123,135	$	90,737

For the periods indicated, the total provision for income taxes consisted of the following:

	2012			2011			2010
	(In thousands)
Current taxes:
Federal	$	2,084		$	(3,159	)	$	(6,856	)
State	(1,388		)	743			(3,079		)
	696			(2,416		)	(9,935		)
Deferred taxes:
Federal	13,768			109,363			88,021
State	1,762			16,188			12,651
	15,530			125,551			100,672
Total provision	$	16,226		$	123,135		$	90,737

Deferred tax assets and liabilities are comprised of the following at December 31:

	2012			2011
	(In thousands)
Deferred tax assets:
Allowance for losses and nondeductible accruals	$	74,890		$	53,376
Net operating loss carryforward	56,020			47,683
Alternative minimum tax credit carryforward	1,972			—
	132,882			101,059
Deferred tax liability:
Depreciation, depletion, amortization and impairment	(819,893		)	(773,246		)
Net deferred tax liability	(687,011		)	(672,187		)
Current deferred tax asset	8,765			10,936
Non-current—deferred tax liability	$	(695,776	)	$	(683,123	)

Realization of the deferred tax assets are dependent on generating sufficient future taxable income. Although realization is not assured, management believes it is more likely than not that the deferred tax asset will be realized. The amount of the deferred tax asset considered realizable, however, could be reduced in the near-term if estimates of future taxable income are reduced. At December 31, 2012, we have federal net operating loss carryforwards of approximately $138.6 million which expire from 2015 to 2032.