INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2011

Components of Earnings Before Income Taxes for Domestic and Foreign Operations

The components of earnings before income taxes for our domestic and foreign operations were as follows:

	Year Ended December 31,
(in thousands of U.S. dollars)	2011		2010		2009
United States	$	174,357	$	626,755	$	106,237
Foreign		5,387		5,900		4,706
Earnings before income taxes	$	179,744	$	632,655	$	110,943

Income Taxes Charged to Earnings

Income taxes have been charged to earnings as follows:

	Year Ended December 31,
(in thousands of U.S. dollars)	2011			2010			2009
Current:
Federal	$	64,328		$	228,683		$	43,839
Foreign		1,554			1,825			1,122
State		10,553			35,028			10,175
Total current taxes		76,435			265,536			55,136
Deferred:
Federal		(6,834	)		(19,647	)		(7,009	)
Foreign		223			1,743			410
State		(3,510	)		(382	)		(4,362	)
Total deferred taxes		(10,121	)		(18,286	)		(10,961	)
Income tax expense	$	66,314		$	247,250		$	44,175

Actual Income Tax Expense Differs from Expected Amounts Computed by Applying U.S. Federal Income Tax Rate to Earnings Before Income Taxes

The actual income tax expense differs from expected amounts computed by applying the U.S. federal income tax rate to earnings before income taxes as follows:

	Year Ended December 31,
(in thousands of U.S. dollars)	2011			2010			2009
Expected income tax expense at statutory rate	$	62,910		$	221,429		$	38,830
Increase (decrease) in taxes resulting from:
Domestic production activities		(2,450	)		(2,625	)		(1,050	)
Valuation allowance		—			—			27
State and local income taxes, net of federal benefit		4,766			22,275			3,759
Tax credits		(128	)		(140	)		(109	)
Tax exempt interest income		—			(2	)		(81	)
Other items, net		1,216			6,313			2,799
Income tax expense	$	66,314		$	247,250		$	44,175

Significant Components of Deferred Tax Assets and Liabilities

Significant components of our deferred tax assets and liabilities are as follows:

	December 31,
(in thousands of U.S. dollars)	2011			2010
Long-term deferred income tax assets (liabilities):
Intangibles	$	(80,372	)	$	(85,538	)
Depreciation on plant and equipment		(33,037	)		(36,826	)
Deferred compensation		20,008			17,537
Cancellation of indebtedness income		(3,830	)		(3,858	)
Loss and tax credit carryforwards		7,316			5,957
Stock compensation		4,552			3,510
Partnership losses		2,603			2,849
Investment impairments		5,202			5,663
Foreign		315			285
Acquisition costs		13,634			13,778
Interest rate swaps		2,083			1,752
Allowance for uncollectible accounts		1,288			1,397
Other reserves		8,958			10,334
Long-term deferred income tax liabilities		(51,280	)		(63,160	)
Valuation allowance		(16,124	)		(15,604	)
Net long-term deferred income tax liabilities	$	(67,404	)	$	(78,764	)
Current deferred income tax assets (liabilities):
Inventory	$	622		$	894
Accrued expense		5,141			5,501
Allowance for uncollectible accounts		7,972			9,306
Other reserves		(203	)		(794	)
Prepaid expense		(3,465	)		(4,487	)
Intangibles		(4,976	)		(3,560	)
Current deferred income tax assets:		5,091			6,860
Valuation allowance		(1,731	)		(2,278	)
Net current deferred income tax assets	$	3,360		$	4,582

Net Deferred Tax Assets and Liabilities

Our net deferred tax assets and liabilities are summarized as follows:

	December 31,
(in thousands of U.S. dollars)	2011			2010
Total deferred tax assets	$	76,193		$	76,432
Total deferred tax liabilities		(140,237	)		(150,614	)
Net deferred income tax liabilities	$	(64,044	)	$	(74,182	)

Summary of Expiration Periods and Corresponding Valuation Allowances for Deferred Tax Assets related to Net Operating/Capital Loss and Tax Credit Carryforwards

The following table summarizes the expiration periods and corresponding valuation allowances for the deferred tax assets related to net operating/capital loss and tax credit carryforwards:

(in millions of U.S. dollars)	2012 – 2016			2017 – 2026		Indefinite			Total
Gross deferred tax asset	$	0.5		$	0.8	$	6.0		$	7.3
Valuation allowance		(0.5	)		—		(4.1	)		(4.6	)
Net deferred tax asset	$	—		$	0.8	$	1.9		$	2.7

Reconciliation of Beginning and Ending Balances for Total Amounts of Gross Unrecognized Tax Benefits

A reconciliation of the beginning and ending balances for the total amounts of gross unrecognized tax benefits is as follows:

(in thousands of U.S. dollars)	2011			2010
Gross unrecognized tax benefits—January 1,	$	12,536		$	11,124
Gross increases in tax positions for prior years		404			3,383
Gross decreases in tax positions for prior years		(1,728	)		(189	)
Gross increases in tax positions for current year		38			367
Gross decreases in tax positions for current year		(15	)		—
Settlements		(444	)		(899	)
Lapse of statute of limitations		(1,182	)		(1,250	)
Gross unrecognized tax benefits—December 31,	$	9,609		$	12,536

Summary of Open Tax Years by Major Jurisdiction

We file tax returns in various federal, state, and local jurisdictions. In many cases, our liabilities for unrecognized tax benefits relate to tax years that remain open for examination by a jurisdiction’s taxing authority. The following table summarizes open tax years by major jurisdiction:

Jurisdiction	Open Tax Years
United States	9/2005 – 3/2/2007, 2008 – 2011
California	3/2/2007, 2007 – 2011
Connecticut	2008 – 2011
Illinois	2008 – 2011
Kansas	2008 – 2011
Massachusetts	2008 – 2011
Michigan	2008 – 2011
North Carolina	2008 – 2011
Pennsylvania	2007 – 2011
Texas	3/2/2007, 2007 – 2011