2.2.0.25falsefalse11601 - Disclosure - Income Taxestruefalsefalse1falsefalseUSDfalsefalse1/1/2010 - 12/31/2010
USD ($)
USD ($) / shares
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<div style="font-family: 'Times New Roman',Times,serif;">
<div style="margin-top: 12pt; font-size: 10pt;" align="left"><b>16. Income Taxes</b> </div>
<div style="margin-top: 6pt; font-size: 10pt;" align="left">Our provision for income tax expense on income before taxes was as follows: </div>
<div align="center">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr valign="bottom"><td width="64%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="10" nowrap="nowrap" align="center"><b>Year Ended December 31,</b></td>
<td> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>2010</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>2009</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>2008</b></td>
<td> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"><i>(in thousands)</i></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">U.S. federal and state:</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Current</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(10,015</td>
<td nowrap="nowrap">)</td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Deferred</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(27,338</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">2,700</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(5,540</td>
<td nowrap="nowrap">)</td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Foreign:</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Current</div></td>
<td> </td>
<td> </td>
<td align="right">5,438</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">18,469</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">23,882</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Deferred</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">476</td>
<td nowrap="nowrap"> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1,592</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1,552</td>
<td nowrap="nowrap">)</td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 45px;">Total</div></td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(21,424</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">19,577</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">6,775</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr></table></div>
<div style="margin-top: 6pt; font-size: 10pt;" align="left">State income taxes included above are not significant for any of the periods presented. </div></div>
<div style="font-family: 'Times New Roman',Times,serif;">
<div style="margin-top: 6pt; font-size: 10pt;" align="left">Income (loss) before income taxes consisted of the following: </div>
<div align="center">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr valign="bottom"><td width="64%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="10" nowrap="nowrap" align="center"><b>Year Ended December 31,</b></td>
<td> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>2010</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>2009</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>2008</b></td>
<td> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"><i>(in thousands)</i></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">United States</div></td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(79,826</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">4,663</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(45,932</td>
<td nowrap="nowrap">)</td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Foreign</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(36,679</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">88,645</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(66,484</td>
<td nowrap="nowrap">)</td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Total</div></td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(116,505</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">93,308</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(112,416</td>
<td nowrap="nowrap">)</td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr></table></div>
<div style="margin-top: 6pt; font-size: 10pt;" align="left">The provision (benefit) for income taxes on income from operations before taxes varies from the U.S. federal statutory income tax rate due to the following: </div>
<div align="center">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr valign="bottom"><td width="64%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="10" nowrap="nowrap" align="center"><b>Year Ended December 31,</b></td>
<td> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>2010</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>2009</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>2008</b></td>
<td> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"><i>(in thousands)</i></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Taxes at U.S. federal statutory rate of 35%</div></td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(40,777</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">32,657</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(39,345</td>
<td nowrap="nowrap">)</td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Permanent book to tax differences:</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Exchange and inflationary gains on foreign tax filings</div></td>
<td> </td>
<td> </td>
<td align="right">337</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">79</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(919</td>
<td nowrap="nowrap">)</td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Disallowed deductions</div></td>
<td> </td>
<td> </td>
<td align="right">11,421</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,175</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">271</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Interest income on affiliate balances</div></td>
<td> </td>
<td> </td>
<td align="right">528</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">670</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,194</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Other permanent differences</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">301</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">543</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Foreign income taxes at different rates</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(5,527</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(10,186</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">44,506</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Foreign net operating loss carryforward valuation allowance</div></td>
<td> </td>
<td> </td>
<td align="right">12,932</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">54</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,229</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Valuation allowance reversal</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(256</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(5,107</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(105</td>
<td nowrap="nowrap">)</td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Section 199 tax-exempt income and various items</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(82</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(66</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(599</td>
<td nowrap="nowrap">)</td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Total</div></td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(21,424</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">19,577</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">6,775</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr></table></div>
<div style="margin-top: 6pt; font-size: 10pt;" align="left">Our effective tax rates were 18%, 21%, and (6)% for the years 2010, 2009, and 2008, respectively. </div>
<div style="margin-top: 6pt; font-size: 10pt;" align="left">At December 31, 2010, there are excess foreign tax credits ("FTC") of $13.8 million that can be carried forward and will expire from 2017 to 2018. We expect to fully utilize the FTC prior to expiration. </div>
<div style="margin-top: 6pt; font-size: 10pt;" align="left">At December 31, 2010, we had available Net Operating Loss ("NOL") carryforwards of approximately $74.2 million, which, if not used, will expire between 2011 and 2025. $4.2 million of the NOL carryforwards will expire in 2011, if not utilized. One foreign jurisdiction has an indefinite NOL carryforward period. A valuation allowance has been set up for a portion of foreign NOL carryforwards, as currently we do not believe that they will be utilized prior to their expiration. The deferred tax benefit of the NOL carryforwards as of December 31, 2010 was $6.6 million. </div>
<div style="margin-top: 6pt; font-size: 10pt;" align="left">During the years ended December 31, 2010, 2009, and 2008, we recognized tax benefits on operating loss carryforwards of $4.3 million, $4.8 million, and $1.0 million, respectively. </div>
<div style="margin-top: 6pt; font-size: 10pt;" align="left">Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. </div></div>
<div style="font-family: 'Times New Roman',Times,serif;">
<div style="margin-top: 6pt; font-size: 10pt;" align="left">The tax effects of significant items comprising our net deferred tax balance as of December 31, 2010 and 2009 are as follows: </div>
<div align="center">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr valign="bottom"><td width="76%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="6" nowrap="nowrap" align="center"><b>December 31,</b></td>
<td> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>2010</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>2009</b></td>
<td> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td colspan="6" nowrap="nowrap" align="center"><i>(in thousands)</i></td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Deferred Tax Liabilities, Current:</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Accrued liabilities</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">613</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">554</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Deferred Tax Liabilities, Non-Current:</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 45px;">Excess book over tax basis of property and equipment</div></td>
<td> </td>
<td> </td>
<td align="right">46,901</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">50,637</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 45px;">Net operating loss carryforward</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(6,282</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(260</td>
<td nowrap="nowrap">)</td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 45px;">Foreign Tax Credit</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(13,872</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(16,147</td>
<td nowrap="nowrap">)</td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 45px;">Stock-based compensation (not currently deductible)</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(5,342</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(4,623</td>
<td nowrap="nowrap">)</td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 45px;">Deferred charges</div></td>
<td> </td>
<td> </td>
<td align="right">2,967</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">8,081</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 45px;">Accrued liabilities</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(2,046</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(828</td>
<td nowrap="nowrap">)</td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 45px;">Discount on convertible notes</div></td>
<td> </td>
<td> </td>
<td align="right">27,669</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">33,138</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Deferred Tax Assets, Current:</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 45px;">Accrued liabilities</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(4,303</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(2,094</td>
<td nowrap="nowrap">)</td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 45px;">Allowance for doubtful accounts</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(282</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(315</td>
<td nowrap="nowrap">)</td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 45px;">Net operating loss carryforward</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(535</td>
<td nowrap="nowrap">)</td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 45px;">Stock-based compensation (not currently deductible)</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(25</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Deferred Tax Assets, Non-Current:</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 45px;">Net operating loss carryforward</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(14,030</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(5,975</td>
<td nowrap="nowrap">)</td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 45px;">Valuation allowance</div></td>
<td> </td>
<td> </td>
<td align="right">13,504</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">852</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 45px;">Excess book over tax basis of</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 45px;">property and equipment</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(2,185</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(121</td>
<td nowrap="nowrap">)</td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 45px;">Accrued liabilities</div></td>
<td> </td>
<td> </td>
<td align="right">265</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">766</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 45px;">Foreign Tax Credit</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(218</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(390</td>
<td nowrap="nowrap">)</td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 60px;">Net deferred tax liability</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">43,334</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">62,740</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr></table></div>
<div style="margin-top: 6pt; font-size: 10pt;" align="left">We have not provided deferred taxes on foreign earnings because such earnings are intended to be reinvested indefinitely outside of the United States. Remittance of foreign earnings are planned based on projected cash flow needs as well as working capital and long-term investment requirements of our foreign subsidiaries and our domestic operations. In 2011, we expect to be in an overall cumulative indefinitely reinvested, undistributed foreign earnings positive position. The undistributed earnings totaled $80.4 million at December 31, 2010. We have not provided deferred taxes for 2010 for earnings that are permanently reinvested. The foreign tax rate exceeds the U.S. tax rate of 35%. No withholding tax would be applicable on any distribution, if made. </div>
<div style="margin-top: 6pt; font-size: 10pt;" align="left"><b><i>Accounting for Uncertainty in Income Taxes </i></b><i>— </i>Accounting guidance prescribes a recognition threshold and measurement attribute for the tax positions taken, or expected to be taken, on a tax return. A reconciliation of the unrecognized tax benefits for the years ended December 31, 2010 and 2009 is provided below (in thousands): </div>
<div align="center">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr valign="bottom"><td width="88%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Balance at January 1, 2009</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">3,999</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Additions based on positions for current year</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Additions for tax positions for prior year</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Foreign Exchange</div></td>
<td> </td>
<td> </td>
<td align="right">131</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Settlements</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Balance at December 31, 2009</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">4,130</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Additions based on positions for current year</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Additions for tax positions for prior year</div></td>
<td> </td>
<td> </td>
<td align="right">658</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Foreign Exchange</div></td>
<td> </td>
<td> </td>
<td align="right">147</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Settlements</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(164</td>
<td nowrap="nowrap">)</td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Balance at December 31, 2010</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">4,771</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr></table></div></div>
<div style="font-family: 'Times New Roman',Times,serif;">
<div style="margin-top: 6pt; font-size: 10pt;" align="left">We recognize interest and penalties related to unrecognized tax benefits as part of non-operating expenses. During the years ended December 31, 2010, 2009, and 2008, we recognized approximately $2.1 million, $2.4 million, and $2.3 million, respectively, in interest recorded in Interest expense on the Consolidated Statements of Operations. During the years ended December 31, 2010, 2009, and 2008, we recognized approximately $0.2 million, $0.04 million, and $0.04 million, respectively, in penalties recorded in Other income (expense), net on the Consolidated Statements of Operations. We had approximately $10.7 million and $8.4 million accrued interest and penalties in non-current other liabilities at December 31, 2010 and 2009, respectively. </div>
<div style="margin-top: 6pt; font-size: 10pt;" align="left">There are unrecognized tax benefits of $4.8 million, all of which would affect our effective tax rate, if recognized. </div>
<div style="margin-top: 6pt; font-size: 10pt;" align="left">The tax years 2004 through 2010 (see table below) remain open to examination by the major taxing authorities to which we are subject. Indonesia and Oman have commenced examination of our affiliates' income tax returns. No material adjustments are expected by the above foreign jurisdictions. The following table summarizes the open tax years by major jurisdictions: </div>
<div align="center">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr valign="bottom"><td width="5%"> </td>
<td width="1%"> </td>
<td width="10%"> </td>
<td width="1%"> </td>
<td width="80%"> </td></tr>
<tr valign="bottom"><td align="right">
<div style="text-indent: -15px; margin-left: 15px;"><b>•</b></div></td>
<td> </td>
<td valign="top" align="left">United States</td>
<td> </td>
<td valign="top" align="left">2007 to 2010</td></tr>
<tr valign="bottom"><td align="right">
<div style="text-indent: -15px; margin-left: 15px;"><b>•</b></div></td>
<td> </td>
<td valign="top" align="left">Brazil</td>
<td> </td>
<td valign="top" align="left">2007 to 2010</td></tr>
<tr valign="bottom"><td align="right">
<div style="text-indent: -15px; margin-left: 15px;"><b>•</b></div></td>
<td> </td>
<td valign="top" align="left">Mexico</td>
<td> </td>
<td valign="top" align="left">2004 to 2010</td></tr>
<tr valign="bottom"><td align="right">
<div style="text-indent: -15px; margin-left: 15px;"><b>•</b></div></td>
<td> </td>
<td valign="top" align="left">Nigeria</td>
<td> </td>
<td valign="top" align="left">2006 to 2010</td></tr></table></div></div> </div>16. Income Taxes
Our provision for income tax expense on income before taxes was as follows:falsefalsefalsefalsefalse | Otherus-types:textBlockItemTypestringDescription containing the entire income tax disclosure. Examples include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. This element may be used as a single block of text to encapsulate the entire disclosure including data and tables.Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 08
-Paragraph h
-Article 4
Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 109
-Paragraph 136, 172
Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 109
-Paragraph 43, 44, 45, 46, 47, 48, 49
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