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Income Taxes | 12 Months Ended
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Dec. 31, 2012
Income Taxes [Abstract] |
Income Tax Disclosure [Text Block] |
| INCOME TAXES
Income before income taxes for U.S. and non-U.S. operations was as follows:
| 2012 |  | 2011 |  | 2010
| (in millions)
U.S. income (loss) | $ | (6.0 | ) |  | $ | 20.3 |  |  | $ | (13.4 | )
Non - U.S. income | 37.5 |  |  | 117.8 |  |  | 132.2 |
Total income before income taxes | $ | 31.5 |  |  | $ | 138.1 |  |  | $ | 118.8 |
The following is a summary of the components of our provisions for income taxes:
| 2012 |  | 2011 |  | 2010
| (in millions)
Current |  |  |  |  |
Federal | $ | (3.3 | ) |  | $ | (24.7 | ) |  | $ | 6.0 |
Other state and local | 1.1 |  |  | (0.2 | ) |  | 1.4 |
Foreign | 10.2 |  |  | 9.9 |  |  | 5.5 |
Total current | $ | 8.0 |  |  | $ | (15.0 | ) |  | $ | 12.9 |
Deferred |  |  |  |  |
Federal | $ | (347.1 | ) |  | $ | 22.3 |  |  | $ | (6.0 | )
Other state and local | — |  |  | (1.4 | ) |  | 0.5 |
Foreign | 3.9 |  |  | (4.9 | ) |  | (3.1 | )
Total deferred | (343.2 | ) |  | 16.0 |  |  | (8.6 | )
Total income tax expense (benefit) | $ | (335.2 | ) |  | $ | 1.0 |  |  | $ | 4.3 |
The following is a reconciliation of our provision for income taxes to the expected amounts using statutory rates:
| 2012 |  | 2011 |  | 2010
Federal statutory | 35.0 | % |  | 35.0 | % |  | 35.0 | %
Foreign income taxes | (85.0 | ) |  | (34.6 | ) |  | (42.9 | )
State and local | 3.5 |  |  | (1.2 | ) |  | 1.6 |
Valuation allowance | (985.0 | ) |  | (30.7 | ) |  | (39.3 | )
U.S. tax on unremitted foreign earnings | (29.5 | ) |  | 26.3 |  |  | 49.6 |
Other | (3.2 | ) |  | 5.9 |  |  | (0.4 | )
Effective income tax rate | (1,064.2 | )% |  | 0.7 | % |  | 3.6 | %
During 2012, our business returned to a position of cumulative profitability on a pre-tax basis, considering our operating results for the current year (2012) and the previous two years (2011 and 2010). We concluded that this record of cumulative profitability in recent years, in addition to the restructuring of our U.S. operations and our long range forecast showing continued profitability, has provided sufficient positive evidence that our net U.S. federal tax benefits more likely than not will be realized. Accordingly, in the fourth quarter of 2012, we released the valuation allowance against our net federal deferred assets for entities in the U.S., resulting in a $337.5 million benefit in our 2012 provision for income taxes. Our income tax benefit and effective tax rate in 2012 reflect the impact of this valuation allowance reversal. Our income tax expense and effective tax rate for 2012 also reflect a net tax expense of $1.3 million related to the amendment of state income tax returns as a result of the settlement of federal income tax audits for the tax years 2004 through 2007. Our income tax expense and effective tax rate for 2011 reflect the effect of recognizing a net operating loss (NOL) benefit against our taxable income in the U.S. Our income tax expense for 2011 also reflects net tax benefits of $4.5 million relating to the favorable resolution of income tax audits in the U.S. and the impacts of changes in tax laws in Michigan and Brazil. Our income tax expense and effective tax rate for 2010 reflect the effect of recognizing a net operating loss (NOL) benefit against our taxable income in the U.S. In conjunction with the filing of our 2009 federal tax return, under provisions contained in the American Recovery and Reinvestment Act of 2009, we recorded a tax benefit of $1.4 million in 2010 attributable to the monetization of alternative minimum tax and research and development credits. We received this tax refund during the fourth quarter of 2010. As of December 31, 2012 and 2011, we have refundable income taxes of $4.7 million and $3.5 million, respectively, classified as prepaid expenses and other on our Consolidated Balance Sheet. We also have income taxes payable of $0.5 million and $4.1 million classified as other accrued expenses on our Consolidated Balance Sheet as of December 31, 2012 and 2011, respectively. The following is a summary of the significant components of our deferred tax assets and liabilities:
| December 31,
| 2012 |  | 2011
| (in millions)
Current deferred tax assets |  |  |
Employee benefits | $ | 16.9 |  |  | $ | 15.3 |
Inventory | 12.6 |  |  | 6.4 |
Prepaid taxes and other | 15.5 |  |  | 11.8 |
Valuation allowance | (10.1 | ) |  | (21.9 | )
Total current deferred tax assets | $ | 34.9 |  |  | $ | 11.6 |
Current deferred tax liabilities |  |  |
Unrealized foreign exchange gain and other | (1.4 | ) |  | (10.2 | )
Current deferred tax asset, net | $ | 33.5 |  |  | $ | 1.4 |
Current deferred tax assets and liabilities recognized in our Consolidated Balance Sheets are as follows:
| December 31,
| 2012 |  | 2011
| (in millions)
U.S. federal and state deferred tax asset, net | $ | 23.0 |  |  | $ | — |
Other foreign deferred tax asset, net | 10.5 |  |  | 1.4 |
Current deferred tax asset, net | $ | 33.5 |  |  | $ | 1.4 |
The following is a summary of the significant components of our noncurrent deferred tax assets and liabilities:
| December 31,
| 2012 |  | 2011
| (in millions)
Noncurrent deferred tax assets |  |  |
Employee benefits | $ | 200.7 |  |  | $ | 222.0 |
NOL carryforwards | 177.4 |  |  | 109.0 |
Tax credit carryforwards | 79.0 |  |  | 60.0 |
Capital allowance carryforwards | 17.9 |  |  | 21.1 |
Fixed assets | 9.0 |  |  | — |
Deferred revenue | 20.0 |  |  | 30.1 |
Capitalized expenditures | 99.3 |  |  | 78.8 |
Other | 4.0 |  |  | 11.7 |
Valuation allowances | (156.0 | ) |  | (405.0 | )
Noncurrent deferred tax assets | 451.3 |  |  | 127.7 |
Noncurrent deferred tax liabilities |  |  |
U.S. tax on unremitted foreign earnings | (85.2 | ) |  | (105.6 | )
Fixed assets and other | (9.5 | ) |  | (9.7 | )
Noncurrent deferred tax asset, net | $ | 356.6 |  |  | $ | 12.4 |
Noncurrent deferred tax assets and liabilities recognized in our Consolidated Balance Sheets are as follows:
| December 31,
| 2012 |  | 2011
| (in millions)
U.S. federal and state deferred tax asset, net | $ | 363.3 |  |  | $ | 6.9 |
Other foreign deferred tax asset (liability), net | (6.7 | ) |  | 5.5 |
Noncurrent deferred tax asset, net | $ | 356.6 |  |  | $ | 12.4 |
DEFERRED INCOME TAX ASSETS AND LIABILITIES AND VALUATION ALLOWANCES The deferred income tax assets and liabilities previously summarized reflect the impact of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the basis of such assets and liabilities as measured by tax laws. As of December 31, 2012 and December 31, 2011, we had deferred tax assets from domestic and foreign NOL and tax credit carryforwards of $274.3 million and $190.1 million, respectively. Approximately $82.6 million of the deferred tax assets at December 31, 2012 relate to NOL carryforwards or tax credits that can be carried forward indefinitely with the remainder having carryover periods of 5 to 20 years. Accounting guidance for income taxes requires a deferred tax liability be established for the U.S. tax impact of undistributed earnings of foreign subsidiaries unless it can be shown that these earnings will be permanently reinvested outside the U.S. We believe a portion of these accumulated foreign earnings in certain jurisdictions are likely to be remitted to the U.S. as dividends or intercompany loans and have established a deferred tax liability of $85.2 million and $105.6 million as of December 31, 2012 and 2011, respectively, which represents the estimated tax impact of the undistributed earnings of certain foreign subsidiaries. The remittance of these undistributed earnings may subject us to U.S. income taxes and certain foreign withholding taxes at the time of remittance. In accordance with the accounting guidance for income taxes, we estimate whether recoverability of our deferred tax assets is “more likely than not,” based on forecasts of taxable income in the related tax jurisdictions. In this estimate, we use historical results, projected future operating results based upon approved business plans, eligible carry forward periods, tax planning opportunities and other relevant considerations. As described above, in the fourth quarter of 2012, we released the valuation allowance against our net federal deferred assets for entities in the United States, resulting in a $337.5 million benefit in our 2012 provision for income taxes. As of December 31, 2012, we have retained a valuation allowance of approximately $166.1 million related to net deferred tax assets in several foreign jurisdictions and U.S. state and local jurisdictions. At December 31, 2011, our valuation allowance was $426.9 million. UNRECOGNIZED INCOME TAX BENEFITS To the extent our uncertain tax positions do not meet the “more likely than not” threshold, we have derecognized such positions. To the extent our uncertain tax positions meet the “more likely than not” threshold, we have measured and recorded the highest probable benefit, and have established appropriate reserves for benefits that exceed the amount likely to be sustained upon examination. A reconciliation of the beginning and ending amounts of unrecognized income tax benefits is as follows:
| Unrecognized Income Tax |  | Interest and
| Benefits |  | Penalties
| (in millions)
Balance at January 1, 2010 | $ | 40.6 |  |  | $ | 15.3 |
Increase in prior year tax positions | 6.2 |  |  | 6.1 |
Decrease in prior year tax positions | (0.2 | ) |  | — |
Increase in current year tax positions | 1.0 |  |  | 0.3 |
Settlement | — |  |  | (0.3 | )
Balance at December 31, 2010 | $ | 47.6 |  |  | $ | 21.4 |
Increase in prior year tax positions | — |  |  | 1.0 |
Decrease in prior year tax positions | (0.8 | ) |  | (2.3 | )
Increase in current year tax positions | 1.3 |  |  | — |
Settlement | (22.3 | ) |  | (12.7 | )
Balance at December 31, 2011 | $ | 25.8 |  |  | $ | 7.4 |
Increase in prior year tax positions | — |  |  | 2.8 |
Decrease in prior year tax positions | (1.1 | ) |  | — |
Increase in current year tax positions | 0.4 |  |  | — |
Settlement | (4.4 | ) |  | — |
Balance at December 31, 2012 | $ | 20.7 |  |  | $ | 10.2 |
At December 31, 2012 and December 31, 2011, we had $20.7 million and $25.8 million of net unrecognized income tax benefits, respectively. Included in the balance at December 31, 2011 was $17.4 million for which the ultimate deductibility was highly certain but for which there is uncertainty about the timing of such deductibility. Because of the impact of deferred tax accounting, other than interest and penalties, the disallowance of the shorter deductibility period would not affect the annual effective tax rate but would accelerate the payment of cash to the taxing authority to an earlier period. In 2012, 2011 and 2010, we recognized expense of $2.8 million, a benefit of $1.3 million and expense of $6.4 million, respectively, of interest and penalties in income tax expense on our Consolidated Statement of Income. We have a liability of $10.2 million and $7.4 million related to the estimated future payment of interest and penalties at December 31, 2012 and 2011, respectively. We file income tax returns in the U.S. federal jurisdiction, as well as various states and foreign jurisdictions. With few exceptions, we are no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations by tax authorities for years before 2006. The 2004 through 2007 U.S. federal income tax return audits were completed during 2010 and all related appeals were resolved in 2011. This settlement resulted in a reduction of our liability for unrecognized income tax benefits of $28.7 million and a cash payment of $4.1 million, which was paid in 2012. The Internal Revenue Service (IRS) commenced an examination of our U.S. income tax returns for 2008 and 2009 in 2010. In 2011, we settled the outstanding items related to the 2006 audit with the Mexican tax authorities for $9.5 million. The Mexican authorities commenced a transfer pricing examination of the income tax returns for 2006 and 2007 during 2012. We are no longer subject to tax examinations by the Mexican tax authorities for tax years before 2006. At this time, we are also under audit in several other foreign jurisdictions. Based on the status of the IRS audits and audits outside the U.S. and the protocol of finalizing audits by the relevant tax authorities, it is not possible to estimate the impact of changes, if any, to previously recorded uncertain tax positions. However, as of December 31, 2012, the IRS and other foreign tax authorities have proposed certain adjustments to our taxable income that would impact our liability for unrecognized tax benefits. Although it is not possible to predict the timing of the conclusion of all ongoing audits with certainty, we anticipate that the current 2006 and 2007 audits with the Mexican tax authorities will be completed during 2013 and 2014, respectively. We anticipate that the current U.S. IRS audits will be completed during 2013. It is possible that a reduction in the unrecognized tax benefits may occur; however, quantification of an estimated range cannot be made at this time

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 109 -Paragraph 136, 172 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=6881521&loc=d3e23780-122690 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 08 -Paragraph h -Article 4 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 109 -Paragraph 43, 44, 45, 46, 47, 48, 49 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32559-109319 + Details
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