10.

Income Taxes

Pretax income for 2011, 2010 and 2009 was taxed in the following jurisdictions:


	2011		2010		2009
	(In thousands)
Domestic	$	192,857	$	161,573	$	114,389
Foreign		81,024		70,301		54,438

Total	$	273,881	$	231,874	$	168,827

The provision (benefit) for income taxes for 2011, 2010, and 2009, was as follows:


	2011			2010			2009
	(In thousands)
Current
U.S.	$	48,823		$	59,384		$	34,921
State and local		3,434			4,548			2,704
Foreign		31,343			18,178			16,730

Total current		83,600			82,110			54,355
Deferred
U.S.		4,792			(6,550	)		1,658
State and local		(1,103	)		(293	)		110
Foreign		(7,265	)		(493	)		(687	)

Total deferred		(3,576	)		(7,336	)		1,081

Total provision for income taxes	$	80,024		$	74,774		$	55,436

Deferred tax assets (liabilities) at December 31, 2011 and 2010 were:


	2011			2010
	(In thousands)
Employee and retiree benefit plans	$	38,626		$	17,764
Depreciation and amortization		(213,002	)		(179,889	)
Inventories		10,274			6,934
Allowances and accruals		14,103			16,690
Interest rate exchange agreement		23,714			11,995
Other		10,033			1,617

Total	$	(116,252	)	$	(124,889	)

The deferred tax assets and liabilities recognized in the Company's Consolidated Balance Sheets as of December 31, 2011 and 2010 were:


	2011			2010
	(In thousands)
Deferred tax asset — other current assets	$	26,037		$	23,829
Deferred tax asset — other noncurrent assets		360			539

Total deferred tax assets		26,397			24,368
Deferred tax liability — accrued expenses		(167	)		(723	)
Noncurrent deferred tax liability — deferred income taxes		(142,482	)		(148,534	)

Total deferred tax liabilities		(142,649	)		(149,257	)

Net deferred tax liabilities	$	(116,252	)	$	(124,889	)

The provision for income taxes differs from the amount computed by applying the statutory federal income tax rate to pretax income. The computed amount and the differences for 2011, 2010, and 2009 are shown in the following table:


	2011			2010			2009
	(In thousands)
Pretax income	$	273,881		$	231,874		$	168,827

Provision for income taxes:
Computed amount at statutory rate of 35%	$	95,858		$	81,156		$	59,089
State and local income tax (net of federal tax benefit)		1,515			2,766			1,829
Taxes on non-U.S. earnings-net of foreign tax credits		(4,522	)		(8,545	)		(4,117	)
Effect of flow-through entities		(6,922	)		(516	)		(535	)
U.S. business tax credits		(917	)		(935	)		(754	)
Domestic activities production deduction		(4,589	)		(4,720	)		(1,925	)
Other		(399	)		5,568			1,849

Total provision for income taxes	$	80,024		$	74,774		$	55,436

The Company has not provided an estimate for any U.S. or additional foreign taxes on undistributed earnings of foreign subsidiaries that might be payable if these earnings were repatriated since the Company considers these amounts to be permanently invested.

A reconciliation of the beginning and ending amount of unrecognized tax benefits for 2011, 2010 and 2009 are shown in the following table:


	2011			2010			2009
	(In thousands)
Beginning balance January 1	$	6,440		$	5,285		$	4,009
Gross increases for tax positions of prior years		1,828			3,049			2,138
Gross decreases for tax positions of prior years		(1,595	)		(675	)		—
Settlements		(338	)		(517	)		(628	)
Lapse of statute of limitations		(787	)		(702	)		(234	)

Ending balance December 31	$	5,548		$	6,440		$	5,285

We recognize interest and penalties related to uncertain tax positions in income tax expense. As of December 31, 2011, 2010 and 2009 we had approximately $0.5 million, $0.8 million and $0.9 million, respectively, of accrued interest related to uncertain tax positions. As of December 31, 2011, 2010 and 2009 we had approximately $0.2 million, $0.4 million and $0.2 million, respectively, of accrued penalties related to uncertain tax positions.

The total amount of unrecognized tax benefits that would affect our effective tax rate if recognized is $5.0 million, $5.8 million and $4.4 million as of December 31, 2011, December 31, 2010 and December 31, 2009, respectively. The tax years 2006-2010 remain open to examination by major taxing jurisdictions. Due to the potential for resolution of federal, state and foreign examinations, and the expiration of various statutes of limitation, it is reasonably possible that the Company's gross unrecognized tax benefits balance may change within the next 12 months by a range of zero to $1.1 million.

The Company had net operating loss carry forwards for U.S. federal purposes at December 31, 2011 and 2010 of $14.0 and $3.5 million, respectively. For non-U.S. purposes, the Company had net operating loss carry forwards at December 31, 2011 and 2010 of $12.4 and $13.7 million, respectively. The federal net operating loss carry forwards are available for use against the Company's consolidated federal taxable income and expire between 2019 and 2030. The entire balance of the non-U.S. net operating losses are available to be carried forward, with $0.7 million of these losses beginning to expire during the years 2018 through 2020. The remaining $11.5 million of such losses can be carried forward indefinitely.

At December 31, 2011 and 2010, the Company had a foreign capital loss carry forward of approximately $1.1 million and $1.3 million respectively. The foreign capital loss can be carried forward indefinitely. At December 31, 2011 and 2010, the Company has a valuation allowance against the deferred tax asset attributable to the foreign capital loss of $0.2 million and $0.4 million, respectively. At December 31, 2011 and 2010, the Company had state net operating loss and credit carry forwards of approximately $18.0 million and $18.7 million, respectively. If unutilized, the state net operating loss will expire between 2016 and 2030. At December 31, 2011 and 2010, the Company recorded a valuation allowance against the deferred tax asset attributable to the state net operating loss of $0.3 million and $0.4 million, respectively.