QUANTA SERVICES INC, QUANTA SERVICES MANAGEMENT ...

QUANTA SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
The actual income tax provision differs from the income tax provision computed by applying the
U.S. federal statutory corporate rate to the income before provision for income taxes as follows (in thousands):
Year Ended December 31,
2011 2010 2009
Provision at the statutory rate ..............................
Increases (decreases) resulting from —
$75,729 $86,189 $ 81,806
State and foreign taxes ................................. 4,762 7,881 5,049
Contingency reserves, net ............................... (8,769) (6,353) (15,810)
Production activity deduction ............................ (2,527) (3,031) (5,007)
Employee per diems, meals and entertainment .............. 4,687 5,126 3,537
Taxes on unincorporated joint ventures .................... (4,142) (833) (480)
Other ............................................... 2,214 1,719 1,100
$71,954 $90,698 $ 70,195
Deferred income taxes result from temporary differences in the recognition of income and expenses for
financial reporting purposes and tax purposes. The tax effects of these temporary differences, representing
deferred tax assets and liabilities, result principally from the following (in thousands):
December 31,
2011 2010
Deferred income tax liabilities —
Property and equipment ....................................... $(204,918) $(180,776)
Goodwill ................................................... (43,057) (30,251)
Other intangibles ............................................. (54,206) (55,762)
Book/tax accounting method difference ........................... (27,924) (31,919)
Total deferred income tax liabilities ................................ (330,105) (298,708)
Deferred income tax assets —
Accruals and reserves ......................................... 40,619 20,144
Accrued insurance ........................................... 55,169 55,984
Deferred revenue ............................................ 14,243 10,316
Net operating loss carryforwards ................................ 15,615 12,374
Other ...................................................... 13,140 22,634
Subtotal ...................................................... 138,786 121,452
Valuation allowance .......................................... (8,783) (11,368)
Total deferred income tax assets .................................. 130,003 110,084
Total net deferred income tax liabilities ............................. $(200,102) $(188,624)
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