INCOME TAXES

Income (loss) before income taxes, consisted of the following (amounts in thousands):



	2011		2010			2009
Domestic	$	82,282	$	(9,148	)	$	(31,863	)
Foreign	13,613		(42		)	(139		)
	$	95,895	$	(9,190	)	$	(32,002	)

The income tax provision (benefit) was as follows (amounts in thousands):



	2011			2010			2009
Current
Federal	$	32,140		$	(853	)	$	(3,526	)
State	3,271			(331		)	160
Foreign	2,797			—			(1,041		)
	38,208			(1,184		)	(4,407		)
Deferred
Federal	(1,904		)	(2,531		)	(2,721		)
State	(357		)	451			(229		)
Foreign	1,812			—			—
	(449		)	(2,080		)	(2,950		)
Income tax provision (benefit)	$	37,759		$	(3,264	)	$	(7,357	)

The income tax provision differs from the amount of income tax determined by applying the statutory U.S. federal income tax rate to pre-tax income (loss) as a result of the following:



	2011		2010		2009
Statutory U.S. federal tax rate	35.0	%	35.0	%	35.0	%
Nondeductible goodwill impairment	—		—		(12.8	)
Foreign taxes, net	(0.2	)	(0.2	)	1.6
State taxes, net	1.9		(0.7	)	(0.1	)
Other, net	2.7		1.4		(0.7	)
Effective tax rate	39.4	%	35.5	%	23.0	%

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets and liabilities at December 31, 2011 and 2010, are as follows (amounts in thousands):



	2011			2010
Deferred tax assets:
Net operating loss carryforwards	$	815		$	9,755
Pension	15,412			9,022
Unrealized loss on investments	5,118			7,719
Inventory	6,621			5,514
Warranty	6,707			4,365
Employee benefits and related costs	4,259			3,369
Allowance for bad debts	3,147			1,991
EPA reserve	549			703
Other	7,518			5,987
Deferred tax assets	50,146			48,425
Deferred tax liabilities:
Fixed assets	(62,062		)	(34,049		)
Deferred tax liabilities	(62,062		)	(34,049		)
Net deferred tax asset	$	(11,916	)	$	14,376

The Company recorded income tax expense of $37.8 million for the year ended December 31, 2011, and income tax benefit of $(3.3) million for the year ended December 31, 2010, and an income tax benefit of $(7.4) million for the year ended December 31, 2009. The Company's income tax expense (benefit) and rate differs from the amount of income tax determined by applying the U.S. Federal income tax rate to pre-tax income primarily as a result of state taxes. The Company has various state net operating loss carryforwards which are subject to expiration from 2018 to 2025.

At December 31, 2011, U.S. income taxes have not been provided on approximately $1 million of unremitted earnings of subsidiaries operating outside the U.S. These earnings, which are considered to be invested indefinitely, would become subject to income tax if they were remitted as dividends, were lent to the Company or a U.S. affiliate, or if the Company were to sell its stock in the subsidiaries. The amount of unrecognized deferred U.S. income tax liability on these unremitted earnings is insignificant.

The Company has applied the provisions of ASC 740, “Income Taxes” related to unrecognized tax benefits. No adjustment was made to retained earnings in adopting these provisions in 2007. At December 31, 2011, 2010 and 2009, there were no unrecognized tax benefits. At this time the Company does not expect any significant increases or decreases to its unrecognized tax benefits within 12 months of this reporting date. Titan has identified its federal tax return and its Illinois state tax return as “major” tax jurisdictions. The Company is subject to (i) federal tax examinations for periods 2010 to 2011 and (ii) Illinois state income tax examinations for years 2008 to 2011.