Income Taxes

12 Months Ended

May 31, 2011

Income Taxes

Income Taxes

4. Income Taxes

        Substantially all of our pre-tax income was from domestic activities. The provision for income taxes on continuing operations includes the following components:

		For the Year Ended May 31,
		2011			2010			2009
Current:
	Federal	$	(6,780	)	$	23,049		$	21,400
	State		1,500			1,800			1,900
			(5,280	)		24,849			23,300
Deferred			40,644			(2,659	)		5,533
		$	35,364		$	22,190		$	28,833

        The deferred tax provision results primarily from differences between financial reporting and taxable income arising from inventory and depreciation.

        Income tax receivable at May 31, 2011 and 2010 was $9,054 and $1,893, respectively, and is included in deposits, prepaids and other on the consolidated balance sheet.

        The provision for income taxes on continuing operations differs from the amount computed by applying the U.S. federal statutory income tax rate of 35% for fiscal 2011, 2010 and 2009 to income before taxes, for the following reasons:

		For the Year Ended May 31,
		2011			2010			2009
Provision for income taxes at the federal statutory rate		$	37,976		$	23,669		$	31,492
	Tax benefits on domestic production activities		—			(1,673	)		(1,487	)
	State income taxes, net of federal benefit and refunds		910			1,056			1,248
	Research and development credit		(350	)		(418	)		(2,702	)
	Leveraged lease		—			(1,517	)		—
	Noncontrolling interest		—			499			—
	Settlement of tax examinations		(3,531	)		—			—
	Other		359			574			282
Provision for income taxes on continuing operations		$	35,364		$	22,190		$	28,833

        Deferred tax liabilities and assets result primarily from the differences in the timing of the recognition of transactions for financial reporting and income tax purposes and consist of the following components:

		May 31,
		2011			2010
Deferred tax assets-current attributable to:
	Inventory costs	$	17,145		$	16,916
	Employee benefits		5,793			3,416
	Allowance for doubtful accounts		2,109			1,834
	AMT, NOL and FTC carrybacks		8,400			—
	Advanced billings and other		(9,864	)		(671	)
	Total deferred tax assets-current	$	23,583		$	21,495
Deferred tax assets-noncurrent attributable to:
	Postretirement benefits	$	12,847		$	16,999
	Bond hedge		6,733			9,028
	Total deferred tax assets-noncurrent	$	19,580		$	26,027
	Total deferred tax assets	$	43,163		$	47,522
Deferred tax liabilities attributable to:
	Depreciation	$	(104,202	)	$	(64,578	)
	Convertible notes		(13,700	)		(18,784	)
	Total deferred tax liabilities	$	(117,902	)	$	(83,362	)
Net deferred tax liabilities		$	(74,739	)	$	(35,840	)

        As of May 31, 2011, we have determined that the realization of our deferred tax assets is more likely than not, and that a valuation allowance is not required based upon our history of operating earnings, our expectations for continued future earnings, the nature of certain of our deferred tax assets and the scheduled reversal of deferred tax liabilities, primarily related to depreciation. During the fourth quarter of fiscal 2011, an examination of the Company's fiscal years 2007 through 2009 tax returns was completed, which resulted in a reduction of income tax expense in the amount of $3,531, primarily due to the allowance of foreign tax credits which had not previously been benefited. Fiscal year 2010 is open for examination. Various states and foreign jurisdictions also remain open subject to their applicable statute of limitations. The Company has no unrecognized tax benefits as of May 31, 2011.