FairPoint Communications 2013 Annual Report Download - page 90

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88
401(k) Savings Plans
The Company and its subsidiaries sponsor four voluntary 401(k) savings plans that, in the aggregate, cover all eligible
Telecom Group employees and Northern New England management employees, and one voluntary 401(k) savings plan that covers
all eligible Northern New England represented employees (collectively, "the 401(k) Plans"). Each 401(k) Plan year, the Company
contributes an amount of matching contributions to the 401(k) Plans determined by the Company at its discretion for management
employees and based on collective bargaining agreements for all other employees. For the 401(k) Plan years ended December 31,
2013, 2012 and 2011, the Company generally matched 100% of each employee's contribution up to 5% of compensation. Total
Company contributions to all 401(k) Plans were $9.9 million, $9.8 million, $9.8 million, and $0.7 million for the year ended
December 31, 2013, the year ended December 31, 2012, the 341 days ended December 31, 2011 and the 24 days ended January 24,
2011, respectively.
(12) Income Taxes
Income Tax Benefit (Expense)
Income tax benefit (expense) for the year ended December 31, 2013, the year ended December 31, 2012, the 341 days ended
December 31, 2011 and the 24 days ended January 24, 2011 consists of the following components (in thousands):
Predecessor
Company
Year Ended
December 31, 2013
Year Ended
December 31, 2012
Three Hundred
Forty-One
Days Ended
December 31, 2011
Twenty-Four
Days Ended
January 24, 2011
Current:
Federal $ (924) $ — $ 913 $ —
State and local (3,154) (1,218) 160 (21)
Total current income tax (expense) benefit (4,078) (1,218) 1,073 (21)
Investment tax credits ——— —
Deferred:
Federal 77,341 77,010 49,001 (247,844)
State and local 17,028 19,768 3,202 (32,024)
Total deferred income tax benefit (expense) 94,369 96,778 52,203 (279,868)
Total income tax benefit (expense) $ 90,291 $ 95,560 $ 53,276 $ (279,889)
Total income tax (expense) benefit was different than that computed by applying United States federal income tax rates to
(loss) income before income taxes for the year ended December 31, 2013, the year ended December 31, 2012, the 341 days ended
December 31, 2011 and the 24 days ended January 24, 2011.
For the year ended December 31, 2013, the effective tax rate to calculate the tax benefit on $193.8 million of pre-tax loss
was 46.6%. The rate differs from the 35% federal statutory rate primarily due to state taxes, as well as a decrease to the valuation
allowance.
For the year ended December 31, 2012, the effective tax rate to calculate the tax benefit on $248.9 million of pre-tax loss
was 38.4%. The rate differs from the 35% federal statutory rate primarily due to state taxes as well as favorable provision to return
permanent adjustments, offset by an increase to the valuation allowance.
For the 341 days ended December 31, 2011, the effective tax rate to calculate the tax benefit on $468.2 million of pre-tax
loss was 11.4%. The rate differs from the 35% federal statutory rate primarily due to an impairment charge reducing the carrying
value of the Company's goodwill to zero and an increase in the Company's valuation allowance.
For the 24 days ended January 24, 2011, the effective tax rate to calculate the tax expense on $866.8 million of pre-tax
income was 32.3%. The rate differs from the 35% federal statutory rate primarily due to the release of the valuation allowance
and other miscellaneous reorganization adjustments.