Income Taxes (Tables)

12 Months Ended

Dec. 31, 2012

Income Tax Disclosure [Abstract]

Components of Income (Loss) before Income Taxes, Domestic and Foreign

The provisions for income taxes were calculated based on the following components of income (loss) before income taxes:

Year ended December 31, (dollars in thousands)	2012			2011			2010
United States	$	(17,030	)	$	(6,662	)	$	46,720
Non-U.S.	29,705			31,946			34,948
Total income before income taxes	$	12,675		$	25,284		$	81,668

Current and Deferred Provisions (Benefit) for Income Taxes

The current and deferred provisions (benefit) for income taxes were:

Year ended December 31, (dollars in thousands)	2012			2011			2010
Current:
U.S. federal	$	(18	)	$	484		$	(423	)
Non-U.S.	9,194			5,732			13,459
U.S. state and local	(72		)	100			212
Total current income tax provision (benefit)	9,104			6,316			13,248
Deferred:
U.S. federal	1,264			(400		)	94
Non-U.S.	(4,658		)	(4,294		)	(1,854		)
U.S. state and local	(1		)	21			94
Total deferred income tax provision (benefit)	(3,395		)	(4,673		)	(1,666		)
Total:
U.S. federal	1,246			84			(329		)
Non-U.S.	4,536			1,438			11,605
U.S. state and local	(73		)	121			306
Total income tax provision (benefit)	$	5,709		$	1,643		$	11,582

Components of Deferred Income Tax Assets and Liabilities

The significant components of our deferred income tax assets and liabilities are as follows:

December 31, (dollars in thousands)	2012			2011
Deferred income tax assets:
Pension	$	16,526		$	35,813
Non-pension postretirement benefits	27,198			26,085
Other accrued liabilities	20,213			21,045
Receivables	1,445			1,279
Net operating loss and charitable contribution carry forwards	45,592			23,746
Tax credits	9,770			9,026
Total deferred income tax assets	120,744			116,994
Deferred income tax liabilities:
Property, plant and equipment	23,196			27,321
Inventories	4,377			4,932
Intangibles and other assets	12,392			11,062
Total deferred income tax liabilities	39,965			43,315
Net deferred income tax asset before valuation allowance	80,779			73,679
Valuation allowance	(77,629		)	(76,452		)
Net deferred income tax asset (liability)	$	3,150		$	(2,773	)

Balance Sheet Locations of Deferred Tax Assets and Liabilities

The net deferred income tax assets and liabilities at December 31 of the respective year-ends were included in the Consolidated Balance Sheets as follows:

December 31, dollars in thousands)	2012			2011
Current deferred income tax asset	$	4,070		$	3,074
Non-current deferred income tax asset	9,830			6,911
Current deferred income tax liability	(3,213		)	(1,369		)
Non-current deferred income tax liability	(7,537		)	(11,389		)
Net deferred income tax asset (liability)	$	3,150		$	(2,773	)

Valuation Allowance Activity

The valuation allowance activity for the years ended December 31 is as follows:

Year ended December 31, (dollars in thousands)	2012			2011			2010
Beginning balance	$	76,452		$	72,327		$	98,989
Charge (benefit) to provision for income taxes	(1,805		)	(2,313		)	(22,830		)
Charge (benefit) to other comprehensive income	2,982			6,438			(3,832		)
Ending balance	$	77,629		$	76,452		$	72,327

Reconciliation of Statutory to Effective Income Tax Rate

Reconciliation from the statutory U.S. federal income tax rate to the consolidated effective income tax rate was as follows:

Year ended December 31, (dollars in thousands)	2012			2011			2010
Statutory U.S. federal income tax rate	35.0		%	35.0		%	35.0		%
Increase (decrease) in rate due to:
Non-U.S. income tax differential	(43.5	)		(14.6	)		(3.2	)
U.S. state and local income taxes, net of related U.S. federal income taxes	(0.4	)		0.3			0.3
U.S. federal credits	(0.9	)		(0.3	)		0.8
Permanent adjustments	60.6			(18.6	)		6.9
Foreign withholding taxes	12.0			6.7			0.4
Valuation allowance	(10.6	)		3.7			(25.4	)
Other	(7.2	)		(5.7	)		(0.6	)
Consolidated effective income tax rate	45.0		%	6.5		%	14.2		%

Income Tax Payments

Income tax payments consisted of the following:

Year ended December 31, (dollars in thousands)	2012		2011		2010
Total income tax payments, net of refunds	$	4,399	$	15,124	$	11,250
Less: credits or offsets	997		4,894		2,420
Cash paid, net	$	3,402	$	10,230	$	8,830

Change in Unrecognized Tax Benefits

A reconciliation of the beginning and ending gross unrecognized tax benefits, excluding interest and penalties, is as follows:

(dollars in thousands)	2012		2011		2010
Beginning balance	$	1,266	$	1,129	$	1,029
Additions based on tax positions related to the current year	—		—		48
Reductions for tax positions of prior years	—		—		(34		)
Changes due to lapse of statute of limitations	230		137		86
Ending balance	$	1,496	$	1,266	$	1,129

Other Unrecognized Tax Benefits Disclosures

We recognize interest and penalties related to unrecognized tax benefits in the provision for income taxes. Other disclosures relating to unrecognized tax benefits are as follows:

December 31, (dollars in thousands)	2012			2011			2010
Impact on the effective tax rate, if unrecognized tax benefits were recognized	$	1,382		$	1,152
Interest and penalties, net of tax, accrued in the Consolidated Balance Sheets	$	662		$	1,415
Interest and penalties expense (benefit) recognized in the Consolidated Statements of Operations	$	(753	)	$	(288	)	$	(271	)

Tax Years Subject to Income Tax Examination

As of December 31, 2012, the tax years that remained subject to examination by major tax jurisdictions were as follows:

Jurisdiction	Open Years
Canada	2009	–	2012
China	2009	–	2012
Mexico	2007	–	2012
Netherlands	2011	–	2012
Portugal	2008	–	2012
United States	2009	–	2012