7.	Income Taxes


	Six Months Ended June 30,
	2012		2011
Estimated effective income tax rate:
Continuing operations		145.5%		27.3%

Discontinued operations		21.2%		30.0%

Consolidated overall		110.6%		26.9%

The Corporation’s effective income tax rate reflects the effect of federal and state income taxes and the impact of differences in book and tax accounting arising from the net permanent benefits associated with the statutory depletion deduction for mineral reserves, the impact of foreign losses for which no tax benefit was realized and the domestic production deduction. The effective income tax rates for discontinued operations reflect the tax effects of individual operations’ transactions and are not indicative of the Corporation’s overall effective income tax rate.

The consolidated overall estimated effective income tax rate for the six months ended June 30, 2012 included a refund of federal tax and interest of $1,626,000 related to the 2006 tax year. This discrete event drove an increase in the consolidated overall estimated effective income tax rate for the six months ended June 30, 2012. The consolidated overall estimated effective income tax rate for the six months ended June 30, 2012 would have been 21.1% without this discrete event; a rate more reflective of the expected annual tax rate of 23%. The consolidated overall estimated effective income tax rate for the six months ended June 30, 2011 included the following discrete events: resolution of a federal tax and interest overpayment of $1,730,000 related to the 2006 tax year and an agreed-upon refund of $1,060,000 for the double taxation of the Corporation’s wholly-owned Canadian subsidiary for the 2001 and 2002 tax years.

On December 23, 2011, the U.S. Treasury Department issued comprehensive temporary and proposed regulations addressing the treatment of expenditures related to tangible property for tax purposes. On March 7, 2012, the Internal Revenue Service (“IRS”) issued two revenue procedures containing administrative guidance related to the adoption of the new rules. Although the regulations are generally effective for tax years beginning January 1, 2012, the IRS has granted taxpayers administrative relief and audit protection for a two-year period as long as the taxpayer adopts the regulations retroactively within two years of the effective date. Management has begun to evaluate the changes necessary to comply with the regulations and the related administrative procedures and is not currently aware of any adjustments that would be material to the Corporation’s consolidated financial position and results of operations. As part of its compliance with these regulations, the Corporation reversed its unrecognized tax benefits related to repairs and maintenance as of March 31, 2012.

The Corporation’s unrecognized tax benefits, excluding interest and correlative effects, are as follows:


		Six Months Ended June 30, 2012
		(Dollars in Thousands)

Unrecognized tax benefits at beginning of period		$ 9,288
Gross increases – tax positions in prior years		9,366
Gross decreases – tax positions in prior years		(13,876)
Gross increases – tax positions in current year		905
Settlements with taxing authorities		(555)

Unrecognized tax benefits at end of period		$ 5,128

At June 30, 2012, unrecognized tax benefits of $5,876,000, net of federal tax benefits and related to interest accruals and permanent income tax differences, would have favorably affected the Corporation’s effective income tax rate if recognized.