Income Taxes

9 Months Ended

Sep. 30, 2011

Income Taxes [Abstract]

Income Taxes

Note 12: Income Taxes Provisions for income taxes are as follows:

	Nine Months Ended				Three Months Ended
	September 30,				September 30,
	2011		2010		2011		2010
	(In Thousands)
Current:
Federal	$	24,497	$	5,059	$	2,583	$	586
State		6,869		1,437		1,200		263
Total current provisions	$	31,366	$	6,496	$	3,783	$	849
Deferred:
Federal	$	1,932	$	2,026	$	554	$	1,800
State		284		299		96		281
Total deferred provisions		2,216		2,325		650		2,081
Provisions for income taxes	$	33,582	$	8,821	$	4,433	$	2,930

For the nine and three months ended September 30, 2011 and 2010, the current provision for federal income taxes shown above includes regular federal income tax after the consideration of permanent and temporary differences between income for GAAP and tax purposes. For the nine and three months ended September 30, 2011 and 2010, the current provision for state income taxes shown above includes regular state income tax and provisions for uncertain state income tax positions. At December 31, 2010, we have remaining state tax net operating loss (“NOL”) carryforwards of approximately $7,200,000 that begin expiring in 2011.

Our annual estimated effective tax rate for 2011 includes the impact of permanent tax differences, such as the domestic manufacturer’s deduction, the advanced energy credit and other permanent items.

During June 2010, we determined that certain nondeductible expenses had not been properly identified relating to the 2007-2009 provisions for income taxes. As a result, we recorded an additional income tax provision of approximately $800,000 for the nine months ended September 30, 2010. For the nine months ended September 30, 2010, the effect of this adjustment decreased basic and diluted net income per share by $.04. Management of the Company evaluated the impact of this accounting error and concluded the effect of this adjustment was immaterial to our 2007-2010 consolidated financial statements.

The tax provision for the nine months ended September 30, 2011 and 2010 was $33,582,000 (37% of pre-tax income) and $8,821,000 (43% of pre-tax income), respectively.

We had approximately $764,000 and $700,000 accrued for uncertain tax liabilities at September 30, 2011 and December 31, 2010, respectively, which are included in current and noncurrent accrued and other liabilities.

LSB and certain of its subsidiaries file income tax returns in the U.S. federal jurisdiction and various state jurisdictions. With few exceptions, the 2008-2010 years remain open for all purposes of examination by the U.S. Internal Revenue Service (“IRS”) and other major tax jurisdictions. Currently we are under examination by the IRS and certain state tax authorities for the tax years 2007-2010.