Income Taxes

12 Months Ended

Dec. 31, 2011

Income Tax Disclosure [Abstract]

Income Taxes

Note 5.   Income Taxes

     Income (loss) from continuing operations before provision (benefit) for taxes and discontinued operations by domestic and foreign source is as follows:

Thousands of Dollars		2011		2010		2009
Domestic	$	46,950	$	49,484	$	(29,766	)
Foreign		50,790		49,365		6,626
Income (loss) from continuing operations  before   provision (benefit) for income taxes	$	97,740	$	98,849	$	(23,140	)
							)))

The provision (benefit) for taxes on income consists of the following:

Thousands of Dollars				2011			2010		2009
Domestic
Taxes currently payable
	Federal		$	11,793		$	12,287	$	7,628
	State and local			2,145			1,861		68
Deferred income taxes				(1,886	)		411		(23,722	)
	Domestic tax provision (benefit)			12,052			14,559		(16,026	)
Foreign
Taxes currently payable				12,298			13,043		10,906
Deferred income taxes				3,136			1,361		(267	)
	Foreign tax provision			15,433			14,404		10,639
		Total tax provision (benefit)	$	27,486		$	28,963	$	(5,387)

     The provision for taxes on income shown in the previous table is classified based on the location of the taxing authority, regardless of the location in which the taxable income is generated.

     The major elements contributing to the difference between the U.S. federal statutory tax rate and the consolidated effective tax rate are as follows:

Percentages		2011		2010		2009
U.S. statutory tax rate		35.0	%	35.0	%	(35.0	)	%
Depletion		(4.1	)	(3.8	)	(13.9	)
Difference between tax provided on foreign earnings
	and the U.S. statutory rate	(1.0	)	(3.1	)	4.3
Change in Mexican law............		(0.2	)	0.3		6.4
State and local taxes, net of Federal tax benefit		1.2		1.2		(12.1	)
Tax credits and foreign dividends		(0.1	)	(0.1	)	(1.4	)
Change in valuation allowance		(1.2	)	(0.1	)	27.0
Impact of uncertain tax positions.........		(2.8	)	(1.5	)	0.1
Other		1.3		1.4		1.3
Consolidated effective tax rate		28.1	%	29.3	%	(23.3	)	%

     The Company believes that its accrued liabilities are sufficient to cover its U.S. and foreign tax contingencies.  The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities are presented below:

Thousands of Dollars		2011			2010
Deferred tax assets:
Accrued expenses	$	9,752		$	13,890
Net operating loss carry forwards		11,083			10,725
Pension and post-retirement benefits costs		40,584			19,857
Other		11,163			10,990
Valuation allowance.		(6,860	)		(6,276	)
Total deferred tax assets	$	65,722		$	49,186

Thousands of Dollars		2011			2010
Deferred tax liabilities:
Plant and equipment, principally due to differences in depreciation	$	4,832		$	6,203
Intangible assets		11,387			10,527
Mexican tax recapture		1,021			1,549
Other		4,067			2,000
Total deferred tax liabilities		21,307			20,279
Net deferred tax assets	$	(44,415	)	$	(28,907	)

     The current and long-term portion of net deferred tax assets is as follows:

Thousands of Dollars		2011			2010
Net deferred tax assets, current	$	(4,903	)	$	(8,378	)
Net deferred assets, long term		(39,512	)		(20,529	)
	$	(44,415	)	$	(28,907	)

     The current portion of the net deferred tax assets is included in prepaid expenses and other current assets.  The long-term portion of the net deferred tax assets are included in other assets and deferred charges.

     The Company has $6.7 million of deferred tax assets arising from tax loss carry forwards which will be realized through future operations. Carry forwards of approximately $1.8 million expire over the next 20 years, and $4.9 million can be utilized over an indefinite period.

     On December 31, 2011, the Company had $3.9 million of total unrecognized tax benefits. Included in this amount were a total of $2.3 million of unrecognized income tax benefits that, if recognized, would affect the Company's effective tax rate. While it is expected that the amount of unrecognized tax benefits will change in the next 12 months, we do not expect the change to have a significant impact on the results of operations or the financial position of the Company.

     The following table summarizes the activity related to our unrecognized tax benefits:

(Thousands of Dollars)		2011			2010
Balance as of January 1, 2011	$	6,473		$	8,496
Increases related to current year positions		563			329
Decreases  related to new judgments		(373	)		--
Decreases related to audit settlements and statute expirations		(2,751	)		(2,234	)
Other		--			(118	)
Balance as of December 31, 2011	$	3,912		$	6,473

     The Company's accounting policy is to recognize interest and penalties accrued, relating to unrecognized income tax benefits as part of its provision for income taxes. The Company had a net reversal of $1.1 million of interest and penalties during 2011 and had a total accrued balance on December 31, 2011 of $0.7 million.

     The Company operates in multiple taxing jurisdictions, both within and outside the U.S. In certain situations, a taxing authority may challenge positions that the Company has adopted in its income tax filings. The Company, with a few exceptions (none of which are material), is no longer subject to U.S. federal, state, local, and European income tax examinations by tax authorities for years prior to 2006.

     Net cash paid for income taxes were $31.9 million, $24.9 million and $14.1 million for the years ended December 31, 2011, 2010 and 2009, respectively.

     The Company has not provided for U.S. federal and foreign withholding taxes on $317.2 million of foreign subsidiaries' undistributed earnings as of December 31, 2011 because such earnings are intended to be permanently reinvested overseas. To the extent the parent company has received foreign earnings as dividends; the foreign taxes paid on those earnings have generated tax credits, which have substantially offset related U.S. income taxes.   However, in the event that the entire $317.2 million of foreign earnings were to be repatriated, incremental taxes may be incurred. We do not believe this amount would be more than $39.2 million.