Income Taxes (Tables)

12 Months Ended

Dec. 31, 2011

(in thousands)	2011	2010	2009

Income tax based on income from continuing operations, at estimated tax rates of 34%, 31%, and 20%, respectively	$21,011	$16,904	($11,730)
Provision for gain on extinguishment of debt	-	-	20,276
Redemption of life insurance policies	-	9,382	-
Income tax from continuing operations before discrete items	21,011	26,286	8,546

Discrete tax expense/(benefit):
Change in tax status	(3,344)	(161)	1,848
Enacted legislation change	115	324	-
Adjustments to prior period tax liabilities	(1,624)	100	(1,420)
Provision for/resolution of tax audits and contingencies, net	289	-	5,267
Provision for/adjustment to beginning of year valuation allowances	22,798	-	(6)
Repatriation of non-U.S. prior years' earnings	-	(2,262)	-
Adjustment due to a prior year error	(3,553)	-	-
Other discrete tax adjustments, net	87	(742)	205

Total income tax expense from continuing operations	$35,779	$23,545	$14,440

(in thousands)	2011	2010	2009
Income/(loss) before income taxes:
U.S.	($3,677)	$3,836	$31,171
Non-U.S.	65,909	51,093	(38,224)
	$62,232	$54,929	($7,053)

Income tax provision:
Current:
Federal	($7,157)	($602)	$0
State	364	289	500
Non-U.S.	18,701	9,748	6,645
	$11,908	$9,435	$7,145

Deferred:
Federal	$3,519	$11,838	$15,084
State	113	1,893	2,574
Non-U.S.	20,239	379	(10,363)
	$23,871	$14,110	$7,295

Total provision for income taxes from continuing operations	$35,779	$23,545	$14,440

The significant components of deferred income tax expense are as follows:

(in thousands)	2011	2010	2009
Net effect of temporary differences	$ 1,044	$ 7,882	$16,724
Provision for gain on extinguishment of debt	-	(20,276)	20,276
Changes in tax status	(3,344)	(161)	1,848
Enacted changes in tax laws and rates	115	324	-
Adjustments to beginning-of-the-year valuation
allowance balance for changes in circumstances	22,798	-	(6)
Net benefit of operating loss carryforwards	3,258	26,341	(31,547)
Total	$ 23,871	$14,110	$7,295

A reconciliation of the U.S. federal statutory tax rate to the Company's effective income tax rate is as follows:

	2011		2010		2009
U.S. federal statutory tax rate	35.0	%	35.0	%	35.0
State taxes, net of federal benefit	0.7		3.4		(23.7)
Other non-U.S. local income taxes	2.0		2.5		36.7
Foreign rate differential	(22.0)		(28.2)		(93.5)
Changes in prior year non-U.S. estimated taxes	5.0		(4.6)		7.7
U.S. tax on non-U.S. earnings and foreign withholding	11.1		6.8		(28.0)
Statutory tax rate changes	0.2		0.6		-
Net change to income tax contingencies	2.0		1.8		(98.2)
Research and development and other tax credits	(1.9)		(3.4)		22.7
Net change to valuation allowances	29.8		12.8		(57.9)
Meals and entertainment	0.7		0.8		(5.7)
Officers life insurance	-		15.6		14.9
Adjustment due to prior year error	(5.7)		-		-
Other	0.6		(0.2)		(14.8)
Effective income tax rate	57.5	%	42.9	%	(204.8)

	U.S.			Non-U.S.
(in thousands)	2011		2010	2011		2010
Current deferred tax assets:
Accounts receivable	$1,713		$2,165	$2,279		$1,538
Inventories	3,049		2,637	1,919		944
Restructuring costs	1,763		716	-		-
Deferred compensation	236		285	-		-
Other	1,816		1,803	7,351		6,839
Total current deferred tax assets	8,577		7,606	11,549		9,321

Noncurrent deferred tax assets:
Deferred compensation	5,420		4,914	-		-
Depreciation and amortization	-		-	2,502		3,197
Postretirement benefits	45,547		45,749	8,984		7,166
Tax loss carryforwards	2,002		5,742	70,510		77,485
Impairment of investment	1,560		1,560	-		-
Tax credit carryforwards	36,868		30,895	3,980		1,598
Original issue discount	645		1,120	-		-
Other	3,264		1,069	259		1,600
Noncurrent deferred tax assets
before valuation allowance	95,306		91,049	86,235		91,046

Less: valuation allowance	(739	)	-	(62,674	)	(42,140	)
Total noncurrent deferred tax assets	94,567		91,049	23,561		48,906

Total deferred tax assets	103,144		98,655	35,110		58,227

Current deferred tax liabilities:
Accounts receivable	-		-	210		1,644
Inventories	-		-	1,514		2,721
Unrepatriated foreign earnings	3,672		1,907			-
Total current deferred tax liabilities	3,672		1,907	1,729		4,950

Noncurrent deferred tax liabilities:
Depreciation and amortization	17,139		16,285	10,953		14,169
Postretirement benefits	-		-	1,854		663
Debt discount	471		766	-		-
Branch losses subject to recapture	-		-	14,176		13,096
Total noncurrent deferred tax liabilities	17,610		17,051	26,983		27,928

Total deferred tax liabilities	21,282		18,958	28,712		32,878

Net deferred tax asset	$81,862		$79,697	$6,398		$25,349

A reconciliation of the beginning and ending amount of unrecognized tax benefits, in accordance with applicable accounting guidance, is as follows:

(in thousands)	2011		2010		2009

Unrecognized tax benefits balance at January 1	$23,467		$22,513		$21,969

Increase in gross amounts of tax positions related to prior years	8,040		23		4,357

Decrease in gross amounts of tax positions related to prior years	(37	)	(690	)	(366	)

Increase in gross amounts of tax positions related to current year	1,005		1,043		4,185

Decrease due to settlements with tax authorities	(4,576	)	-		(8,979	)

Decrease due to lapse in statute of limitations	-		(76	)	(55	)

Currency translation	(846	)	654		1,402

Unrecognized tax benefits balance at December 31	$27,053		$23,467		$22,513

As of December 31, 2011 and 2010, current income taxes receivable and deferred consisted of the following:

(in thousands)	2011	2010
Income taxes receivable	$9,884	$22,653
Deferred income taxes	20,126	16,927
Total current income taxes receivable and deferred	$30,010	$39,580

As of December 31, 2011 and 2010, noncurrent taxes receivable and deferred consisted of the following:

(in thousands)	2011	2010
Income taxes receivable	$16,516	$0
Deferred income taxes	118,128	139,955
Total noncurrent taxes receivable and deferred	$134,644	$139,955

As of December 31, 2011 and 2010, current taxes payable and deferred consisted of the following:

(in thousands)	2011	2010
Taxes payable	$3,365	$2,431
Deferred income taxes	5,401	6,857
Total current taxes payable and deferred	$8,766	$9,288