(7)

Income Taxes

Total income tax expense (benefit) for the years ended December 31 was comprised of the following:


	2011		2010		2009
Continuing operations	$	21,849	$	19,391	$	5,335
Discontinued operations		(597)		(735)		175

		21,252		18,656		5,510

Income from continuing operations before income taxes and income (loss) from affiliates and joint ventures was comprised of the following:


	2011		2010		2009
Income from continuing operations before income taxes and income (loss) from affiliates and joint ventures:
Domestic	$	53,049	$	42,306	$	16,456
Foreign		23,396		19,157		23,376

		76,445		61,463		39,832

The components of the provision for income taxes attributable to income from continuing operations before income taxes and income (loss) from affiliates and joint ventures for the years ended December 31 consisted of:


	2011		2010		2009
Provision (benefit) for income taxes:
Federal:
Current	$	5,466	$	8,173	$	196
Deferred		6,538		911		1,145
State:
Current		2,911		2,360		421
Deferred		376		-		253
Foreign:
Current		6,818		7,316		1,851
Deferred		(260)		631		1,469

		21,849		19,391		5,335

The tax effects of temporary differences that gave rise to significant portions of the deferred tax assets and liabilities as of December 31 were as follows:


	2011		2010
Deferred tax assets attributable to:
Accounts receivable	$	996	$	1,248
Inventories		1,700		2,513
Employee benefit plans		25,638		19,070
Accrued liabilities		475		703
Employee incentive plans		2,654		-
Tax credit carryforwards		7,611		7,309
Available-for-sale securities		2,759		-
Other		800		2,424

Total deferred tax assets		42,633		33,267
Deferred tax liabilities attributable to:
Plant and equipment		(18,136)		(10,971)
Land and mineral reserves		(897)		(959)
Joint ventures		(1,465)		(1,524)
Intangible assets		(1,692)		-
Available-for-sale securities		-		(1,022)
Other		(1,234)		(1,822)

Total deferred tax liabilities		(23,424)		(16,298)
Valuation allowances		(6,782)		(4,540)

Net deferred tax assets		12,427		12,429

We believe it is more likely than not that the net deferred tax assets above will be realized in the normal course of business.

The following analysis reconciles the U.S. statutory federal income tax rate to the effective tax rates related to income from continuing operations before income taxes and equity income (loss) of affiliates and joint ventures:


	2011					2010					2009
	Amount			Percent of Pretax Income		Amount			Percent of Pretax Income		Amount			Percent of Pretax Income
Provision for income taxes at U.S. statutory rates	$	26,756			35.0%	$	21,512			35.0%	$	13,955			35.0%
Increase (decrease) in taxes resulting from:
Percentage depletion		(4,900	)		-6.3%		(3,870	)		-6.4%		(3,257	)		-8.2%
State taxes, net of federal benefit		2,154			2.8%		1,547			2.5%		731			1.8%
Foreign tax rates		(2,123	)		-2.8%		(1,226	)		-2.0%		(4,560	)		-11.4%
Change in reserve for tax uncertainties		(364	)		-0.5%		-			0.0%		(2,975	)		-7.5%
Audit settlement		(118	)		-0.2%		-			0.0%		2,083			5.2%
Discrete items related to foreign tax filings		1,393			1.8%		-			0.0%		-			0.0%
Foreign tax credits		(2,359	)		-3.0%		(2,178	)		-3.5%		(880	)		-2.2%
Changes to valuation allowance		(517	)		-0.7%		2,591			4.2%		28			0.1%
Tax from foreign disregarded entities		262			0.3%		1,414			2.3%		142			0.4%
Other		1,665			2.2%		(399	)		-0.6%		68			0.2%

		21,849			28.6%		19,391			31.5%		5,335			13.4%

Percentage Depletion

Depletion deductions are federal income tax deductions that arise from extracting minerals from the ground. This deduction is similar to depreciation in that it allows us to recover the cost of an asset over the resources' productive life. It is different from depreciation, however, in that depletion deductions are a permanent book to tax difference, whereas depreciation deductions are temporary in nature. Hence, depletion deductions affect the effective tax rate whereas depreciation deductions do not. We calculate depletion under the percentage depletion method based upon revenues and costs from our mining activities in the U.S.

Tax on Reinvested Earnings

We have not provided for United States federal income tax and foreign income withholding taxes on approximately $117,454 and $109,502 of undistributed earnings from international subsidiaries as of December 31, 2011 and 2010, respectively, because such earnings are intended to be reinvested indefinitely outside of the U.S. If these earnings were distributed, foreign tax credits may become available under current law to reduce or eliminate the resulting income tax liability in the United States.

Tax Holidays

We have benefitted from tax holidays in both Poland and Thailand as a result of our locating and investing in special economic zones in each country. These tax holidays resulted in reductions to our income tax expense of $51, $469 and $1,608 in 2011, 2010 and 2009, respectively, representing benefits of $0.00, $0.01 and $0.05 to diluted earnings per share in 2011, 2010 and 2009, respectively.

Our agreement with the Polish tax authorities expired in 2010. This agreement made us eligible, based on certain terms and conditions, for a tax holiday exemption for all income tax activities through 2009. We continue to pursue other opportunities in an effort to minimize income tax within the country.

Our agreement with the Thai tax authorities provides for tax holidays on several investments. The most significant tax exemption is on all income from manufacturing operations (distributed goods are still subject to taxation) related to our initial investment. These initial manufacturing activities were taxable at 50% in years 2006 through 2010. An additional tax holiday was granted in 2007 for the expansion of our Thai facility. Income generated from this expansion is granted a 100% tax holiday from corporate income tax for eight (8) years beginning in 2007 and then taxable at 50% for five (5) years starting in 2015. We attempt to modify and obtain tax concessions when possible.

Exams

In the normal course of business, we are subject to examination by tax authorities throughout the world. With few exceptions, we are no longer subject to income tax examinations by tax authorities for years prior to 2004. The United States Internal Revenue Service ("IRS") has examined our federal income tax returns for all open years through 2009.

NOLs and Credit Carryforwards

At December 31, 2011, we have $1,793 of various income tax credits, which we expect to utilize within the ten year carryforward period. We have foreign and state net operating loss carryovers that have resulted in a deferred tax asset of $4,023 at December 31, 2011, against which we have recorded a full valuation allowance as it is more likely than not that we will not be able to utilize the loss in the carryforward period.

Unrecognized Tax Benefits

The following table summarizes the activity related to our unrecognized tax benefits:


	2011		2010		2009
Balance at beginning of the year	$	464	$	359	$	5,033
Increases related to prior year tax positions		-		105		120
Increases related to current year tax positions		-		-		86
Decreases related to the expiration of statue of limitation / settlement of audits		(464)		-		(4,880)

Balance at the end of the year		-		464		359

We report penalties and interest relating to uncertain tax positions within the income tax expense line item within our consolidated statement of operations.