Income Taxes (Tables)

12 Months Ended

Dec. 31, 2012

Schedule of Effective Income Tax Rate Reconciliation

A reconciliation of the U.S. federal statutory income tax rate to the consolidated effective income tax rate from continuing operations follows:



	2012		2011		2010
U.S. federal statutory income tax rate	35.0	%	35.0	%	35.0	%
State taxes (net of federal benefit)	0.9		0.9		0.4
Foreign losses without tax benefit	0.6		0.3		3.0
Foreign operations taxed at lower rates	(18.3	)	(20.6	)	(28.0	)
ESOP dividend	(0.4	)	(0.3	)	(0.7	)
Repatriation from current year foreign earnings	1.8		5.9		4.7
Other	(0.4	)	0.5		1.0
Consolidated effective income tax rate	19.2	%	21.7	%	15.4	%

Schedule of Income before Income Tax, Domestic and Foreign and Components of Income Tax Expense

The components of Income from continuing operations before income taxes and Income taxes follow:



	2012			2011			2010
Income (loss) from continuing operations before income taxes:
U.S.	$	34,393		$	19,341		$	(8,545	)
International	87,254			97,548			72,350
Income from continuing operations before income taxes	$	121,647		$	116,889		$	63,805
Income tax provision:
Current:
U.S. – federal	$	75		$	11,829		$	578
U.S. – state	1,215			805			758
International	13,417			11,695			9,958
	14,707			24,329			11,294
Deferred:
U.S. – federal	13,794			831			(423		)
U.S. – state	566			928			(434		)
International	(5,717		)	(772		)	(610		)
	8,643			987			(1,467		)
Income taxes	$	23,350		$	25,316		$	9,827

Schedule of Deferred Tax Assets and Liabilities

Deferred income tax assets and liabilities at December 31 consist of the tax effects of temporary differences related to the following:



	Assets						Liabilities
	2012			2011			2012			2011
Allowance for doubtful accounts	$	946		$	767		$	78		$	71
Depreciation and amortization	(13,881		)	708			35,245			12,359
Inventory valuation	15,486			12,890			1,288			1,109
Other postretirement/postemployment costs	20,841			20,945			(350		)	(354		)
Tax loss carryforwards	48,402			39,238			—			—
Pension	41,854			43,998			(262		)	23
Accrued compensation	12,611			6,885			—			—
Goodwill	(35,236		)	(31,807		)	53			633
Swedish tax incentive	—			—			3,898			3,922
Contingent convertible debt interest	(10,846		)	(10,089		)	—			—
Unrealized foreign currency gain	—			—			2,613			2,463
Other	8,626			9,636			7,921			1,867
	88,803			93,171			50,484			22,093
Valuation allowance	(24,936		)	(16,681		)	—			—
	$	63,867		$	76,490		$	50,484		$	22,093
Current deferred income taxes	$	33,906		$	28,829		$	1,777		$	1,431
Non-current deferred income taxes	29,961			47,661			48,707			20,662
	$	63,867		$	76,490		$	50,484		$	22,093

Summary of Income Tax Contingencies

A reconciliation of the unrecognized tax benefits for 2012, 2011 and 2010 follows:



	2012			2011			2010
Balance at January 1	$	6,965		$	7,102		$	7,017
Increase (decrease) in unrecognized tax benefits due to:
Tax positions taken during prior periods	—			—			240
Tax positions taken during the current period	—			215			17
Acquisition	2,528			—			—
Settlements with taxing authorities	(172		)	(175		)	—
Lapse of the applicable statute of limitations	—			(177		)	(172		)
Balance at December 31	$	9,321		$	6,965		$	7,102

The Company recognizes interest and penalties, if any, related to unrecognized tax benefits in income tax expense. The liability for unrecognized tax benefits included accrued interest of $0, $0 and $39 at December 31, 2012, 2011 and 2010, respectively.

The Company or its subsidiaries file income tax returns in the U.S. federal jurisdiction, and various state and foreign jurisdictions. In the normal course of business, the Company is subject to examination by various taxing authorities, including the IRS in the U.S. and the taxing authorities in other major jurisdictions such as Brazil, Canada, China, France, Germany, Mexico, Singapore, Sweden, Switzerland and the United Kingdom. With few exceptions, the Company is no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations by tax authorities for years before 2003. See Note 19 of the Consolidated Financial Statements for a discussion of current IRS matters.

- Definition

Tabular disclosure of tax positions taken in the tax returns filed or to be filed for which it is more likely than not that the tax position will not be sustained upon examination by taxing authorities (i.e., uncertain tax positions) and other types of income tax contingencies, including: (1) the policy on classification of interest and penalties; (2) a tabular reconciliation of the total amounts of unrecognized tax benefits at the beginning and end of the period; the total amount(s) of: (3) unrecognized tax benefits that, if recognized, would affect the effective tax rate, and (4) interest and penalties recognized in each of the income statement and balance sheet; (5) for positions for which it is reasonably possible that the total amounts unrecognized will significantly change within 12 months of the reporting date the: (i) nature of the uncertainty, (ii) nature of the event that could occur that would cause the change, and (iii) an estimate of the range of the reasonably possible change or a statement that an estimate of the range cannot be made; and (6) a description of tax years that remain subject to examination by major tax jurisdictions.

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