NOTE J—INCOME TAXES

Components of income tax expense attributable to continuing operations are as follows:

(In thousands)	2012			2011		2010

Current:
Federal	$	32,394		$	18,976	$	10,766
State		6,386			2,242		2,121

Total Current		38,780			21,218		12,887

Deferred:
Federal		(3,273	)		6,242		384
State		(1,030	)		2,197		368

Total Deferred		(4,303	)		8,439		752

Provision for income taxes	$	34,477		$	29,657	$	13,639

A reconciliation of the federal statutory tax rate to the Company's effective tax rate is as follows:



Federal statutory tax rate	35.0	%	35.0	%	35.0	%
Increase (decrease) in taxes resulting from:
State income taxes (net of federal effect)	4.3		4.3		5.7
Domestic manufacturing deduction	(2.4	)	(2.0	)	(3.0	)
Adjustments to uncertain tax positions	—		—		(2.1	)
Non-deductible acquisition costs	—		—		2.3
Other	(1.8	)	(2.0	)	1.6

Provision for income taxes	35.1	%	35.3	%	39.5	%

The significant components of the net deferred income tax liability (asset) were as follows at December 31:

(In thousands)	2012			2011

Deferred tax liabilities:
Goodwill amortization	$	63,405		$	58,423
Property, plant and equipment		3,339			6,011
Acquired intangibles		18,062			18,091
Debt issuance costs		1,600			2,446
Tax accounting method changes		1,278			2,626
Other		4,511			1,578

		92,195			89,175

Deferred tax assets:
Net operating loss carryforwards		4,943			5,499
Accrued expenses		15,573			11,870
Deferred benefit plan compensation		8,363			7,693
Provision for doubtful accounts		7,911			5,756
Inventory capitalization and reserves		2,408			2,247
Restricted stock		2,182			1,947
Deferred rent		1,432			1,282
Other		557			594

		43,369			36,888
Valuation allowance		(1,219	)		(1,374	)

		42,150			35,514

Net deferred tax liabilities	$	50,045		$	53,661

At December 31, 2012 and 2011, the Company had accumulated federal net operating loss carryforwards of $7.0 million, and $7.1 million, respectively, and state net operating loss carryforwards of $49.7 million and $59.0 million, respectively. The federal net operating loss carryforwards expire from 2025 through 2029, and the state net operating loss carryforwards for significant taxing jurisdictions expire from 2022 through 2028. Utilization of the acquired carryforwards is subject to limitations due to ownership changes that may delay the utilization of a portion of the acquired carryforwards.

The Company establishes valuation allowances when necessary to reduce deferred tax assets to amounts expected to be realized. As of December 31, 2012 and 2011, the Company recorded a valuation allowance of $1.2 million and $1.4 million, respectively, related to state loss carryforwards, which are expected to expire before utilization.

A reconciliation of the beginning and ending balances of unrecognized tax benefits is as follows:

(In thousands)	2012			2011			2010

Unrecognized tax benefits, at beginning of the year	$	230		$	420		$	1,709
Additions for tax positions related to the current year		107			—			107
Additions for tax positions of prior years		79			—			—
Decrease related to prior year positions		—			(190	)		(672	)
Decrease for lapse of applicable statute of limitations		(39	)		—			(724	)

Unrecognized tax benefits, at end of the year	$	377		$	230		$	420

As of December 31, 2012, the total amount of unrecognized tax benefits, if recognized, that would affect the effective tax rate is $0.1 million. At December 31, 2012, there were no unrecognized tax benefits that the Company expects would change significantly over the next 12 months.

The Company recognizes accrued interest and penalties related to unrecognized tax benefits as a component of income tax expense. As of December 31, 2012, 2011, and 2010, the amount of accrued interest and penalties was immaterial. The amount of interest and penalties recognized in all periods presented was immaterial.

The Company is subject to income tax in U.S. federal, state and local jurisdictions. The Company is no longer subject to U.S. Federal income tax examinations for years before 2009, and with few exceptions, is no longer subject to state and local income tax examinations by tax authorities for years before 2008. However, due to acquired net operating losses, tax authorities have the ability to adjust those net operating losses related to closed years.