Page 113 - New8814 GP 2011_AR-fnl

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Significant components of deferred tax assets and liabilities are as follows (in thousands):
2011
2010
Deferred taxassets:
Net operating loss carryforwards - Federal
14,863
$
12,915
$
Net operating loss carryforwards - State
671
1,736
Taxcredit carryforwards - Federal
1,354
1,340
Taxcredit carryforwards - State
6,193
7,312
Derivatives
1,540
5,749
Organizational and start-up costs
6,373
4,606
Stock-based compensation
3,283
2,528
Inventory valuation
711
3,258
Accrued Expenses
4,857
3,526
Deferred Revenue
590
616
Other
189
144
Total deferred taxassets
40,624
43,730
Deferred tax liabilities:
Fixed assets
(76,250)
$
(54,356)
$
Investment in partnerships
(946)
-
Total deferred tax liabilities
(77,196)
(54,356)
Valuation allowance
(2,754)
(5,990)
Deferred income taxes
(39,326)
$
(16,616)
$
December 31,
The deferred tax valuation allowance of $2.8 million includes federal and state valuation allowances of $0.7 million and
$2.1 million, respectively. The state valuation allowance is related to certain Iowa and Tennessee tax credits that have a
remaining life between 3 and 13 years.
As of December 31, 2011 and 2010, the Company had federal net operating loss carryforwards of $42.5 million and
$36.9 million, respectively, which are available to reduce future federal income tax, if any, through 2031. In determining
these net operating loss carryforwards, the Company considered future taxable income and possible limitations on net
operating losses.
The Company continues to maintain a valuation allowance against some of its net deferred tax assets at December 31,
2011, due to the uncertainty of realizing these assets in the future. In assessing the realizability of deferred tax assets,
management considers whether it is more likely than not that some or all of the deferred tax assets will be realized. The
ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in
which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax
liabilities, projected future taxable income, and tax planning strategies in making this assessment.
The Company conducts business and files tax returns in several states within the U.S. The Company’s federal and state
returns for the tax years ended November 30, 2008 and later are still subject to audit.
A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands):
Balance at January 1, 2011
1,061
$
Gross increases from taxpositions in prior periods
1,629
Settlements
(2,583)
Balance at December 31, 2011
107
$
UnrecognizedTax Benefits
During 2011, the Company reached a settlement with the IRS with respect to the audit of the November 30, 2006 and
2007 tax returns. Unrecognized tax benefits related to federal and state net operating loss carryforwards were affected by the
non-cash settlement. The unrecognized tax benefits, if recognized, would favorably impact the Company’s effective tax rate.