9. INCOME TAXES

The components of the consolidated income tax provision (benefit) were as follows (in thousands of dollars):


	Year Ended September 30,
	2011			2010		2009
Federal:
Current	$	—		$	—	$	(100	)
Deferred		(22,165	)		73,924		(15,926	)
State:
Current		—			213		445
Deferred		(652	)		2,046		(477	)

Provision (Benefit) Before Valuation Allowance		(22,817	)		76,183		(16,058	)
Valuation Allowance		17,321			—		—

Total	$	(5,496	)	$	76,183	$	(16,058	)

GAAP requires that the Company consider available evidence, to determine if a valuation allowance is needed to reduce the Company's carrying value of deferred tax assets to an amount more likely than not to be realized. Future realization of the tax benefit of an existing deductible temporary difference or carryforward ultimately depends on the existence of sufficient taxable income of the appropriate character within the carryforward periods available under the tax law.

As of September 30, 2011, the Company has provided a valuation allowance of $18.9 million on certain federal and state tax jurisdictions' deferred tax assets to reduce the amount of these assets to the extent necessary to result in an amount that is more likely than not to be realized.

The consolidated income tax provision from continuing operations is different from the amount which would be provided by applying the statutory federal income tax rate of 35% to the Company's income before taxes. The reasons for the differences from the statutory rate are as follows (in thousands of dollars):


	Year Ended September 30,
	2011			2010			2009
Income Taxes Computed at the Statutory Federal Rate	$	(20,611	)	$	74,564		$	(13,605	)
State Income Taxes, Net of Federal Benefit		(652	)		2,259			(32	)
Effect of Amended Prior Year Return Permanent Items		—			—			(2,673	)
Other		(1,554	)		(640	)		252

Total before Valuation Allowance		(22,817	)		76,183			(16,058	)
Valuation Allowance		17,321			—			—

Total	$	(5,496	)	$	76,183		$	(16,058	)

Income taxes paid were $34.0 thousand, $657.0 thousand and $74.0 thousand in fiscal 2011, 2010 and 2009, respectively.

The tax effects of temporary differences which give rise to the Company's deferred tax assets and liabilities were as follows (in thousands of dollars):


	September 30, 2011									September 30, 2010
	Assets			Liabilities			Total			Assets		Liabilities			Total
Current:
Inventory Valuation Differences	$	—		$	(4,467	)	$	(4,467	)	$	—	$	(4,296	)	$	(4,296	)
Accruals Not Currently Deductible		1,042			—			1,042			1,282		—			1,282
Deferred Gains on Sugar Futures		—			(3,477	)		(3,477	)		—		(7,622	)		(7,622	)
Other		—			(1,220	)		(1,220	)		—		(791	)		(791	)

Total Current		1,042			(9,164	)		(8,122	)		1,282		(12,709	)		(11,427	)
Valuation Allowance		(191	)		—			(191	)		—		—			—

Total Current, Net of Valuation Allowance		851			(9,164	)		(8,313	)		1,282		(12,709	)		(11,427	)

Noncurrent:
Depreciable Asset Basis Differences		—			(63,268	)		(63,268	)		—		(62,498	)		(62,498	)
Investment in JV		—			(2,697	)		(2,697	)		—		—			—
Pensions		40,901			—			40,901			40,486		—			40,486
Accruals Not Currently Deductible		1,249			—			1,249			1,485		—			1,485
Operating Loss Carryforwards		54,666			—			54,666			30,365		—			30,365
Foreign Tax Credits Carryforwards		3,000			—			3,000			—		—			—
Credit Carryforwards		2,045			—			2,045			3,713		—			3,713
Other		—			(6,149	)		(6,149	)		—		(2,927	)		(2,927	)

Total Noncurrent		101,861			(72,114	)		29,747			76,049		(65,425	)		10,624
Valuation Allowance		(18,713	)		—			(18,713	)		—		—			—

Total Non-Current, Net of Valuation Allowance		83,148			(72,114	)		11,034			76,049		(65,425	)		10,624

Total	$	83,999		$	(81,278	)	$	2,721		$	77,331	$	(78,134	)	$	(803	)

The Company has a net operating loss carryforward for federal income tax purposes of $149.6 million, of which, $21.1 million expires in 2029, $64.3 million expires in 2030 and $64.2 million expires in 2031. Net operating loss carryforwards totaling $16.4 million are subject to an annual limitation under Section 382 of the Internal Revenue Code.

A reconciliation of the change in the amount of unrecognized tax benefits for the twelve months ended September 30, 2011, is as follows (in thousands):


	Tax			Interest			Total
Balance, October 1, 2010	$	4,931		$	1,510		$	6,441
Additions based on tax positions related to the current year		321			0			321
Reductions for tax positions of prior years		(250	)		(38	)		(287	)

Balance, September 30, 2011	$	5,002			1,472			6,475

Substantially all of the $5.0 million unrecognized benefits would affect the Company's effective tax rate if recognized. Interest and penalties recognized in the Consolidated Balance Sheet at September 30, 2011 were $1.9 million. The Company classifies interest and penalties related to unrecognized tax benefits as interest and tax expense, respectively.

The Company files tax returns in the U.S. federal jurisdiction and various state jurisdictions. The Company is currently open to audit under the statute of limitations by the Internal Revenue Service for the fiscal years 2006 through 2010. The Company or its subsidiaries' state tax returns are open to audit under the statute of limitations for the fiscal years 2006 through 2010.