Income Taxes

The income tax provision (benefit) from continuing operations are composed of:



In thousands	2013			2012			2011
Current	$	(110	)	$	964		$	1,071
Deferred	(13,656		)	(2,605		)	(44,948		)
	$	(13,766	)	$	(1,641	)	$	(43,877	)

A reconciliation of income taxes from continuing operations at the federal statutory rate to the preceding provision (benefit) follows:



In thousands	2013			2012			2011
Taxes at statutory rate	$	(8,491	)	$	100		$	(39,672	)
Additional statutory depletion	(2,967		)	(2,485		)	(2,172		)
State income taxes	(347		)	519			(1,285		)
Nontaxable insurance benefits	(1,317		)	(1,219		)	(1,275		)
Stock-based compensation	(501		)	823			909
Other—net	(143		)	621			(382		)
	$	(13,766	)	$	(1,641	)	$	(43,877	)

The components of the net deferred tax asset at May 31 are summarized below.



In thousands	2013			2012
Deferred tax assets
Deferred compensation	$	20,832		$	22,626
Inventory costs	11,231			4,897
Accrued expenses not currently tax deductible	8,092			9,192
Goodwill	—			988
Pension and other postretirement benefits	7,493			11,042
Alternative minimum tax credit carryforward	28,808			28,808
Net operating loss carryforward	148,020			61,530
Other	7,412			5,998
Total deferred tax assets	231,888			145,081
Valuation allowance	(3,639		)	(5,159		)
Net deferred tax assets	228,249			139,922
Deferred tax liabilities
Property, plant and equipment	196,220			103,583
Goodwill	457			—
Deferred real estate gains	20,044			19,049
Other	4,824			3,575
Total deferred tax liabilities	221,545			126,207
Net deferred tax asset	6,704			13,715
Less current deferred tax asset	18,774			10,713
Long-term deferred tax asset (liability)	$	(12,070	)	$	3,002

We made income tax payments of $0.5 million in 2013, $0.4 million in 2012 and $0.4 million in 2011, and received income tax refunds of $0.3 million in 2013, $0.1 million in 2012 and $13.1 million in 2011.

As of May 31, 2013, we had an alternative minimum tax credit carryforward of $28.8 million. The credit, which does not expire, is available for offset against future regular federal income tax. We had $143.1 millionin federal net operating loss carryforwards. The federal net operating losses, which begin to expire in 2030, may be carried forward twenty years and offset against future federal taxable income. We had $5.0 million in state net operating loss carryforwards. The state net operating losses, which begin to expire in 2014, may be carried forward from five to twenty years depending on the state jurisdiction.

Under special tax rules (the Section 382 Limitation), cumulative stock ownership changes among material shareholders exceeding fifty percent during a three-year period can potentially limit a company’s future use of net operating losses, tax credits and certain “built-in losses” or deductions (tax attributes). The Section 382 Limitation may be increased by certain “built-in gains” as provided by current IRS guidance. We had an ownership change in 2009. However, management does not believe the Section 382 Limitation impacts the recorded value of deferred taxes or realization of our tax attributes.

Management reviews our deferred tax position and in particular our deferred tax assets whenever circumstances indicate that the assets may not be realized in the future and records a valuation allowance unless such deferred tax assets are deemed more likely than not to be recoverable. The ultimate realization of these deferred tax assets depends upon various factors including the generation of taxable income during future periods. The Company’s deferred tax assets exceeded deferred tax liabilities as of May 31, 2013 and May 31, 2012. Management has concluded that the sources of taxable income we are permitted to consider do not assure the realization of the entire amount of our net deferred tax assets. Accordingly, a valuation allowance is required due to the uncertainty of realizing the deferred tax assets. We have $3.6 million in valuation allowances recorded against our net deferred tax assets as of May 31, 2013.

The amount of income tax we pay is subject to ongoing audits by federal and state authorities which may result in proposed assessments. We adjust reserves for our uncertain tax positions due to changing facts and circumstances, such as the closing of a tax audit, judicial rulings, refinement of estimates, or realization of earnings or deductions that differ from our estimates. To the extent that the final outcome of a matter differs from the amount recorded, such difference generally will impact our provision for income taxes in the period that includes its final resolution. We have no significant reserves for uncertain tax positions including related interest and penalties.

In addition to our federal income tax return, we file income tax returns in various state jurisdictions. We are no longer subject to income tax examinations by federal tax authorities for years prior to 2007 and state tax authorities for years prior to 2007. The Internal Revenue Service completed their review of our federal income tax returns for 2007 through 2010 resulting in no adjustments.