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Company issued warrants for 700,000 shares of its restricted stock at a price of $14.00 per share. The warrants are excluded
from the computations of diluted EPS as the exercise price was greater than the average market price of the Company’s
common stock for the years ended December 31, 2011 and 2010.
13. TREASURY STOCK
On September 9, 2011, the Company repurchased 3.5 million shares of common stock at a price of $8.00 per share from
a subsidiary of NTR plc, which is a principal shareholder of the Company. Shares of common stock repurchased by the
Company are recorded at cost as treasury stock and result in a reduction of stockholders’ equity on the consolidated balance
sheets. When shares are reissued, the Company will use the weighted average cost method for determining the cost basis. The
difference between the cost of the shares and the issuance price will be added or deducted from additional paid-in capital. The
Company does not have a share repurchase program and does not intend to retire the repurchased shares.
14. INCOME TAXES
Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for
the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets
and liabilities and their respective tax bases, and for net operating loss and tax credit carry-forwards. Deferred tax assets and
liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary
differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is
recognized in income in the period that includes the enactment date.
Income tax expense consists of the following (in thousands):
2011
2010
2009
Current
(612)
$
1,369
$
438
$
Deferred
24,298
16,520
(347)
Total
23,686
$
17,889
$
91
$
Year EndedDecember 31,
Deferred income tax provisions for the year ended December 31, 2009 reflect the Company’s determination that any
benefit from net deferred tax assets related to net operating losses for tax purposes may not be realized. As a result, valuation
allowances were provided. In 2010, due to profitability, the valuation allowances were released, except for those related to
specific federal and state tax credits.
Differences between the income tax expense (benefit) computed at the statutory federal income tax rate and as presented
on the consolidated statements of operations are summarized as follows (in thousands):
2011
2010
2009
Taxexpense (benefit) at federal statutory
rate of 35%
21,737
$
23,118
$
7,063
$
State income taxexpense (benefit), net
of federal expense
2,989
(1,883)
(2,411)
Taxcredits
-
-
(439)
Decrease in valuation allowance against
deferred taxassets
(2,084)
(3,749)
(3,004)
Other
1,044
403
(1,118)
Income taxexpense
23,686
$
17,889
$
91
$
Year EndedDecember 31,
The Company’s state income tax benefit for the years ended December 31, 2010 and 2009 includes state income tax
expense on income which was more than offset by certain state tax benefits and credits that will expire in years 2014 through
2023.