Income Taxes

12 Months Ended

Dec. 31, 2011

Income Taxes [Abstract]

INCOME TAXES

NOTE 9: INCOME TAXES

The components of earnings (loss) from continuing operations before income taxes are as follows:

in thousands	2011			2010			2009
Earnings (Loss) from Continuing   Operations before Income Taxes
Domestic		($169,758	)		($213,598	)		($43,180	)
Foreign		16,020			21,392			23,959
Total		($153,738	)		($192,206	)		($19,221	)
Provision (benefit) for income taxes from continuing operations consists of the following:
in thousands	2011			2010			2009
Provision for (Benefit from) Income Taxes   from Continuing Operations Current
Federal		$4,424			($46,671	)		($3,965	)
State and local		5,482			3,909			7,034
Foreign		4,412			4,957			3,037
Total		14,318			(37,805	)		6,106
Deferred
Federal		(76,558	)		(52,344	)		(37,790	)
State and local		(15,397	)		1,422			(5,794	)
Foreign		(846	)		(936	)		(391	)
Total		(92,801	)		(51,858	)		(43,975	)
Total benefit		($78,483	)		($89,663	)		($37,869	)

The benefit from income taxes differs from the amount computed by applying the federal statutory income tax rate to losses before provision for income taxes. The sources and tax effects of the differences are as follows:

dollars in thousands	2011				2010				2009
Income tax benefit at the   federal statutory tax rate of 35%		($53,809	)	35.0%		($67,272	)	35.0%		($6,727	)	35.0%
Income Tax Provision (Benefit) Resulting from
Statutory depletion		(18,931	)	12.3%		(20,301	)	10.6%		(19,464	)	101.3%
State and local income taxes, net of federal   income tax benefit		(6,445	)	4.2%		3,465		-1.8%		1,457		-7.6%
Nondeductible expense		1,692		-1.1%		1,583		-0.8%		1,694		-8.8%
ESOP dividend deduction		(1,267	)	0.8%		(1,665	)	0.9%		(2,408	)	12.5%
Recapture U.S. Production Activities deduction		0		0.0%		2,993		-1.6%		0		0.0%
Fair market value over tax basis of contributions		0		0.0%		(3,223	)	1.7%		(2,931	)	15.3%
Undistributed foreign earnings		(2,553	)	1.7%		(3,331	)	1.7%		(4,461	)	23.2%
Tax loss on sale of stock — divestiture		0		0.0%		0		0.0%		(4,143	)	21.6%
Reversal cash surrender value — COLI plans		(483	)	0.3%		(448	)	0.2%		(412	)	2.1%
Prior year true up adjustments		3,115		-2.1%		(1,095	)	0.6%		375		-2.0%
Provision (benefit) for uncertain tax positions		390		-0.3%		1,017		-0.5%		(451	)	2.3%
Other, net		(192	)	0.2%		(1,386	)	0.6%		(398	)	2.1%
Total income tax benefit		($78,483	)	51.0%		($89,663	)	46.6%		($37,869	)	197.0%

Deferred income taxes on the balance sheet result from temporary differences between the amount of assets and liabilities recognized for financial reporting and tax purposes. The components of the net deferred income tax liability at December 31 are as follows:

in thousands	2011			2010
				(As Restated See Note 20)
Deferred Tax Assets Related to
Pensions		$58,193			$21,630
Other postretirement benefits		52,433			52,366
Accruals for asset retirement obligations   and environmental accruals		37,145			28,605
Accounts receivable, principally allowance   for doubtful accounts		2,194			2,770
Deferred compensation, vacation pay   and incentives		97,741			89,246
Interest rate swaps		22,273			27,022
Self-insurance reserves		16,467			31,445
Inventory		6,984
Federal net operating loss carryforwards		48,496			25,629
State net operating loss carryforwards		36,912			26,663
Valuation allowance on state net operating   loss carryforwards		(29,757	)		(20,721	)
Foreign tax credit carryforwards 1		22,395			22,816
Other		38,866			35,740
Total deferred tax assets		410,342			343,211
Deferred Tax Liabilities Related to
Inventory		0			1,768
Fixed assets 1		799,632			843,630
Intangible assets		286,317			273,711
Other		13,889			12,997
Total deferred tax liabilities		1,099,838			1,132,106
Net deferred tax liability		$689,496			$788,895

¹ The 2010 foreign tax credit carryforwards were previously netted with fixed assets.

   They are appropriately restated above.

The above amounts are reflected in the accompanying Consolidated Balance Sheets as of December 31 as follows:

in thousands	2011			2010
				(As Restated See Note 20)
Deferred Income Taxes
Current assets		($43,032	)		($54,704	)
Deferred liabilities		732,528			843,599
Net deferred tax liability		$689,496			$788,895

A deferred tax asset is recognized for deductible temporary differences, operating loss carryforwards and tax credit carryforwards using the applicable enacted tax rate. A valuation allowance is recognized if, based on the analysis of all positive and negative evidence, it is more likely than not that some portion, or all, of the deferred tax asset will not be realized. Future realization of deferred tax assets ultimately depends on the existence of sufficient taxable income of the appropriate character in either the carryback or carryforward period under the tax law.

At December 31, 2011, we had no carryback potential to prior years. Also, since we are in a cumulative loss position for the three-year period ended December 31, 2011, we did not consider any projected future federal taxable income (exclusive of reversing temporary differences) in projecting the future realization of deferred tax assets.

At December 31, 2011, we had significant taxable temporary differences. We scheduled the reversal of these taxable temporary differences against our much smaller deductible temporary differences. This analysis provides the necessary positive evidence to conclude that it is more likely than not that we will realize the benefit of all of our deferred tax assets related to deductible temporary differences.

Details of our definite-lived deferred tax assets at December 31, 2011 are as follows:

		0000 0 0000		0000 0 0000		0000 0 0000
in thousands	Deferred Tax Asset		Valuation Allowance		Expiration
Federal net operating loss carryforwards		$48,496		$ 0		2027 - 2031
State net operating loss carryforwards		36,912		29,757		2014 - 2031
Foreign tax credit carryforwards		22,395		0		2019 & 2020
Charitable contribution carryforwards		9,523		0		2013 - 2016

The reversal of the taxable temporary differences against the deductible temporary differences produces excess taxable income. We projected this excess taxable income to be significant enough to allow us to utilize all of the foreign tax credit and federal net operating loss carryforwards and almost all of the charitable contribution carryforwards. We believe that we would be able to utilize the remainder of the charitable contribution carryforwards through the use of prudent and feasible tax-planning strategies. Thus, we believe it is more likely than not that we will realize the benefit of these three definite-lived deferred tax assets.

At December 31, 2011, we had a valuation allowance of $29,757,000 against our state net operating loss carryforwards of $36,912,000. This conclusion regarding the valuation allowance is supported by the following negative evidence:

§ required filing groups in many states are different from the federal filing group

§ we no longer file in certain states for which we have net operating losses carryforwards

§ certain states have short carryforward periods or unusual limitations on the usage of a net operating loss

Our determination regarding the realizability of our deferred tax assets without a valuation allowance could be impacted in the future if economic conditions deteriorate resulting in unexpected losses or if unanticipated events occur affecting the timing of the reversing temporary differences.

As of December 31, 2011, income tax receivables of $3,000,000 are included in accounts and notes receivable in the accompanying Consolidated Balance Sheet. These receivables relate to prior year state overpayments. There were similar receivables of $39,529,000 as of December 31, 2010. These receivables largely related to prior year federal overpayments and net operating loss carrybacks.

Uncertain tax positions and the resulting unrecognized income tax benefits are discussed in our accounting policy for income taxes (see Note 1, caption Income Taxes). Changes in unrecognized income tax benefits for the years ended December 31, are as follows:

		000000000			000000000			000000000
in thousands	2011			2010			2009
Unrecognized income tax benefits     as of January 1		$28,075			$20,974			$18,131
Increases for tax positions related to
Prior years		389			14,685			1,108
Current year		913			1,447			5,667
Acquisitions		0			0			0
Decreases for tax positions related to
Prior years		(411	)		(8,028	)		(9	)
Current year		0			0			0
Settlements with taxing authorities		(15,402	)		0			(482	)
Expiration of applicable statute of limitations		(76	)		(1,003	)		(3,441	)
Unrecognized income tax benefits as of December 31		$13,488			$28,075			$20,974

We classify interest and penalties recognized on the liability for unrecognized income tax benefits as income tax expense. Interest and penalties recognized as income tax expense were $492,000 in 2011, $1,525,000 in 2010 and $472,000 in 2009. The balance of accrued interest and penalties included in our liability for unrecognized income tax benefits as of December 31 was $2,602,000 in 2011, $4,496,000 in 2010 and $3,112,000 in 2009.

Our unrecognized income tax benefits at December 31 in the table above include $9,205,000 in 2011, $12,038,000 in 2010 and $12,181,000 in 2009 that would affect the effective tax rate if recognized.

We are routinely examined by various taxing authorities. The U.S. federal statutes of limitations for both 2007 and 2006 were extended to December 31, 2012. In 2011, the Internal Revenue Service began an examination of years 2008 through 2010. The U.S. federal statute of limitations for 2008 was extended to September 14, 2013. We anticipate no single tax position generating a significant increase or decrease in our liability for unrecognized tax benefits within 12 months of this reporting date.

We file income tax returns in U.S. federal, various state and foreign jurisdictions. Generally, we are not subject to significant changes in income taxes by any taxing jurisdiction for the years prior to 2006.

We have not recognized deferred income taxes on $61,000,000 of undistributed earnings from one of our foreign subsidiaries because we consider such earnings as indefinitely reinvested. If we distribute the earnings in the form of dividends, the distribution would be subject to U.S. income taxes. In this event, the amount of deferred income taxes to be recognized is $21,400,000.