8. Income Taxes

The provisions (benefit) for income taxes are composed of:


In thousands	2012			2011			2010
Current	$	1,084		$	981		$	(14,006	)
Deferred		(88	)		(42,875	)		(9,132	)

	$	996		$	(41,894	)	$	(23,138	)

A reconciliation of income taxes at the federal statutory rate to the preceding provisions (benefit) follows:


In thousands	2012			2011			2010
Taxes at statutory rate	$	2,965		$	(37,382	)	$	(21,697	)
Additional statutory depletion		(2,793	)		(2,512	)		(3,128	)
State income taxes		597			(1,226	)		(862	)
Nontaxable insurance benefits		(1,219	)		(1,275	)		(1,012	)
Qualified domestic production activities		—			—			2,085
Stock-based compensation		823			909			863
Other—net		623			(408	)		613

	$	996		$	(41,894	)	$	(23,138	)

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


In thousands	2012			2011
Deferred tax assets
Deferred compensation	$	22,626		$	22,341
Inventory costs		4,897			6,833
Accrued expenses not currently tax deductible		9,192			10,205
Goodwill		988			2,191
Other comprehensive income		11,042			7,250
Alternative minimum tax credit carryforward		28,808			28,808
Net operating loss carryforward		61,530			49,896
Other		5,998			4,803

Total deferred tax assets		145,081			132,327
Valuation allowance		(5,159	)		—

Net deferred tax assets		139,922			132,327
Deferred tax liabilities
Property, plant and equipment		103,583			99,750
Deferred real estate gains		19,049			14,505
Other		3,575			3,039

Total deferred tax liabilities		126,207			117,294

Net deferred tax asset		13,715			15,033
Less current deferred tax asset		10,713			12,346

Long-term deferred tax asset	$	3,002		$	2,687

We made income tax payments of $0.4 million in 2012, $0.4 million in 2011 and $0.4 million in 2010, and received income tax refunds of $0.1 million in 2012, $13.1 million in 2011 and $16.8 million in 2010.

As of May 31, 2012, 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 $57.6 million in 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 $4.0 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, 2012 and May 31, 2011. 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 was required due to the uncertainty of realizing the deferred tax assets. We recorded a valuation allowance of $5.2 million in 2012 through a charge to other comprehensive loss given the increase in actuarial losses in our retirement plans in 2012 when the Company was otherwise profitable.

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. Our federal income tax returns for 2007 through 2010 are currently under examination. We do not anticipate that any adjustments that may result from this examination would have a material effect on our financial position or results of operations.