Annual report pursuant to section 13 and 15(d)

INCOME TAXES (Tables)

INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2012

The provision for income taxes consisted of the following:

	Year ended December 31,
	2012		2011		2010
				(Restated – see Note 2)
	(thousands of dollars)
Current federal provision	$	4,821	$	3,072	$	1,022
Current state provision		199		191		6

Deferred federal provision		882		3237		663
Deferred state provision		2		5		12

Income tax expense	$	5,904	$	6,505	$	1,703

Difference Between Effective Tax Rate In Income Tax Expense And Federal Statutory Rate

The difference between the effective tax rate in income tax expense and the Federal statutory rate of 35% for the year ended December 31, 2012, and 34% for the years ended December 31, 2011, and 2010, is as follows:

	2012			2011			2010
	(thousands of dollars)
					(Restated – see Note 2)
Income taxes at U.S. statutory rate	$	6,056		$	6,933		$	1,285
State taxes, net of federal benefit		132			127			96
Prior year overpayments		--			--			(15	)
Permanent and other items		(250	)		(567	)		10
Increase (decrease) in valuation allowance		(34)			12			327
Total tax expense	$	5,904		$	6,505		$	1,703

Tax Effects Of Temporary Differences That Give Rise To Significant Portions Of Federal And State Deferred Tax Assets And Deferred Tax Liabilities

Tax effects of temporary differences that give rise to significant portions of federal and state deferred tax assets and deferred tax liabilities were as follows:

	December 31,
	2012			2011
					(Restated – see Note 2)
	(thousands of dollars)
Deferred tax liabilities:
Plant, pipeline and equipment	$	(8,260	)	$	(7,655	)
Contractual based asset		(124	)		(206	)
Unrealized loss on swap agreements		-			(136	)
Investment in AMAK		(2,089	)		(1,736	)
Total deferred tax liabilities	$	(10,473	)	$	(9,733	)

Deferred tax assets:
Accounts receivable		201			187
Inventory		95			92
Mineral interests		376			365
Unrealized loss on interest rate swap		313			386
Environmental		123			119
Post-retirement benefits		370			356

Stock-based compensation		716			569
Deferred revenue		332			561
Gross deferred tax assets		2,526			2,635
Valuation allowance		(1,093	)		(1,127	)
Total net deferred tax assets	$	1,433		$	1,508
Net deferred tax liabilities	$	(9,040	)	$	(8,225	)

Current And Non-Current Classifications Of Deferred Tax Balances

The current and non-current classifications of the deferred tax balances are as follows:

	2012			2011
	(thousands of dollars)
				(Restated – see Note 2)
Current:
Deferred tax asset	$	1,054		$	1,169

Non-current:

Deferred tax assets		2,057			1,933
Deferred tax liability		(11,058	)		(10,200	)
Valuation allowance		(1,093	)		(1,127	)
Non-current deferred tax liability, net		(10,094	)		(9,394	)

Total deferred liabilities, net	$	(9,040	)	$	(8,225	)