Income Taxes

3 Months Ended

Mar. 31, 2012

Income Tax Disclosure [Abstract]

Income Taxes

Note 4 - Income Taxes

Income tax benefit (expense) for the three months ended March 31, 2012, and 2011, differs from the amounts that would be provided by applying the statutory U.S. federal income tax rate to income before income taxes as a result of the estimated effect of the domestic production activities deduction, percentage depletion, the effect of state income taxes, uncertain tax positions, valuation allowances, and other permanent differences. The quarterly rate can also be impacted by the proportion of income earned in reported periods.

The provision for income taxes consists of the following:

	For the Three Months Ended March 31,
	2012			2011
	(in thousands)
Current portion of income tax benefit (expense):
Federal	$	—		$	(6,944	)
State	(393		)	(175		)
Deferred portion of income tax benefit (expense)	(15,288		)	18,174
Total income tax benefit (expense)	$	(15,681	)	$	11,055
Effective tax rate	37.3		%	37.4		%

On a year-to-date basis, a change in the Company’s effective tax rate between reported periods will generally reflect differences in its estimated highest marginal state tax rate due to changes in the composition of income from Company activities among state tax jurisdictions. Cumulative effects of state rate changes are reflected in the period legislation is enacted.

The Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction and in various states. With certain exceptions, the Company is no longer subject to U.S. federal or state income tax examinations by these tax authorities for years before 2007. In the first quarter of 2011, the Company received a $5.5 million refund from its 2006 tax year as a result of a net operating loss carryback claim from the 2008 tax year. Related to the Company’s amended return for the 2007 tax year, the Internal Revenue Service initiated an audit in the first quarter of 2012 for the 2007 and 2010 tax years.

In the third quarter of 2011, the Company completed a multi-year research and development credit study and recorded a cumulative discreet tax benefit. Federal tax law allowing for the calculation of these credits from the Company’s increasing research activities has not been extended past December 31, 2011, as of the filing date of this report. For these reasons, comparable first quarter periods of 2012 and 2011 reflect no benefit for the credit.