XML 103 R21.htm IDEA: XBRL DOCUMENT
v2.4.0.6

INCOME TAXES | 12 Months Ended
--- | ---
Dec. 31, 2012
Income Tax Disclosure [Abstract] |
INCOME TAXES | INCOME TAXES The components of income before income taxes for the three years ended December 31, 2012 were as follows:
|  | Year Ended December 31,
|  | 2012 |  | 2011 |  | 2010
U.S. |  | $ | 243,382 |  |  | $ | 204,667 |  |  | $ | 135,756 |
Non-U.S. |  | 126,188 |  |  | 96,664 |  |  | 51,352 |
Total |  | $ | 369,570 |  |  | $ | 301,331 |  |  | $ | 187,108 |
The components of income tax expense (benefit) for the three years ended December 31, 2012 were as follows:
|  | Year Ended December 31,
|  | 2012 |  | 2011 |  | 2010
Current: |  |  |  |  |  |
Federal |  | $ | 72,809 |  |  | $ | 42,510 |  |  | $ | 30,642 |
Non-U.S. |  | 33,510 |  |  | 19,970 |  |  | 15,532 |
State and local |  | 8,172 |  |  | 6,699 |  |  | 4,337 |
|  | 114,491 |  |  | 69,179 |  |  | 50,511 |
Deferred: |  |  |  |  |  |
Federal |  | (1,673 | ) |  | 12,140 |  |  | 6,802 |
Non-U.S. |  | (750 | ) |  | 2,768 |  |  | (2,640 | )
State and local |  | 286 |  |  | 231 |  |  | 225 |
|  | (2,137 | ) |  | 15,139 |  |  | 4,387 |
Total |  | $ | 112,354 |  |  | $ | 84,318 |  |  | $ | 54,898 |
The differences between total income tax expense and the amount computed by applying the statutory federal income tax rate to income before income taxes for the three years ended December 31, 2012 were as follows:
|  | Year Ended December 31,
|  | 2012 |  | 2011 |  | 2010
Statutory rate of 35% applied to pre-tax income |  | $ | 129,350 |  |  | $ | 105,466 |  |  | $ | 65,488 |
Effect of state and local income taxes, net of federal tax benefit |  | 5,598 |  |  | 4,585 |  |  | 3,044 |
Taxes (less) more than the U.S. tax rate on non-U.S. earnings, including utilization of tax loss carry-forwards, losses with no benefit and changes in non-U.S. valuation allowance |  | (11,263 | ) |  | (13,637 | ) |  | (1,417 | )
Manufacturing deduction |  | (6,287 | ) |  | (5,330 | ) |  | (3,900 | )
U.S. tax cost (benefit) of foreign source income |  | (4,766 | ) |  | 145 |  |  | (3,282 | )
Resolution and adjustments to uncertain tax positions |  | (1,493 | ) |  | (5,103 | ) |  | (3,204 | )
Other |  | 1,215 |  |  | (1,808 | ) |  | (1,831 | )
Total |  | $ | 112,354 |  |  | $ | 84,318 |  |  | $ | 54,898 |
Effective tax rate |  | 30.40 | % |  | 27.98 | % |  | 29.34 | %
The 2012 effective tax rate is impacted by the geographic mix of earnings and taxes at lower rates in foreign jurisdictions, including Canada, Mexico, Poland and the U.K., as well as loss utilization in other foreign jurisdictions. Total income tax payments, net of refunds, were $78,506 in 2012, $62,600 in 2011 and $40,970 in 2010. Deferred Taxes Significant components of deferred tax assets and liabilities at December 31, 2012 and 2011, were as follows:
|  | December 31,
|  | 2012 |  | 2011
Deferred tax assets: |  |  |  |
Tax loss and credit carry-forwards |  | $ | 40,373 |  |  | $ | 32,313 |
Inventory |  | 1,328 |  |  | 3,639 |
Other accruals |  | 14,981 |  |  | 15,653 |
Employee benefits |  | 17,904 |  |  | 17,600 |
Pension obligations |  | 82,903 |  |  | 79,371 |
Other |  | 12,686 |  |  | 7,111 |
Deferred tax assets, gross |  | 170,175 |  |  | 155,687 |
Valuation allowance |  | (38,799 | ) |  | (31,713 | )
Deferred tax assets, net |  | 131,376 |  |  | 123,974 |
Deferred tax liabilities: |  |  |  |
Property, plant and equipment |  | 41,380 |  |  | 40,806 |
Intangible assets |  | 19,545 |  |  | 13,251 |
Inventory |  | 5,783 |  |  | 2,973 |
Pension obligations |  | 2,940 |  |  | 1,676 |
Other |  | 8,769 |  |  | 9,685 |
Deferred tax liabilities |  | 78,417 |  |  | 68,391 |
Total Deferred taxes |  | $ | 52,959 |  |  | $ | 55,583 |
At December 31, 2012, certain subsidiaries had tax loss carry-forwards of approximately $132,868 that will expire in various years from 2013 through 2030, except for $27,894 for which there is no expiration date. In assessing the realizability of deferred tax assets, the Company assesses whether it is more likely than not that a portion or all of the deferred tax assets will not be realized. The Company considers the scheduled reversal of deferred tax liabilities, tax planning strategies, and projected future taxable income in making this assessment. At December 31, 2012, a valuation allowance of $38,799 was recorded against certain deferred tax assets based on this assessment. The Company believes it is more likely than not that the tax benefit of the remaining net deferred tax assets will be realized. The amount of net deferred tax assets considered realizable could be increased or decreased in the future if the Company's assessment of future taxable income or tax planning strategies changes. The Company does not provide deferred income taxes on unremitted earnings of certain non-U.S. subsidiaries which are deemed permanently reinvested. It is not practicable to calculate the deferred taxes associated with the remittance of these earnings. Deferred income taxes associated with earnings of $3,776 that are not expected to be permanently reinvested were not significant. Unrecognized Tax Benefits Liabilities for unrecognized tax benefits are classified as "Accrued taxes" non-current unless expected to be paid in one year. The Company recognizes interest and penalties related to unrecognized tax benefits in "Income taxes." Current income tax expense included an expense of $893 for the year ended December 31, 2012 and a benefit of $505 for the year ended December 31, 2011 for interest and penalties. For those same years, the Company's accrual for interest and penalties related to unrecognized tax benefits totaled $10,295 and $9,039, respectively. The following table summarizes the activity related to unrecognized tax benefits:
|  | 2012 |  | 2011
Balance at January 1 |  | $ | 26,656 |  |  | $ | 38,393 |
Increase related to current year tax provisions |  | 3,838 |  |  | 2,221 |
Increase related to prior years' tax positions |  | 212 |  |  | 3,250 |
Increase related to acquisitions |  | 1,274 |  |  | — |
Decrease related to settlements with taxing authorities |  | (940 | ) |  | (3,424 | )
Resolution of and other decreases in prior years' tax liabilities |  | (5,964 | ) |  | (13,460 | )
Other |  | 179 |  |  | (324 | )
Balance at December 31 |  | $ | 25,255 |  |  | $ | 26,656 |
The total amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate was $14,839 at December 31, 2012 and $17,325 at December 31, 2011. The Company files income tax returns in the U.S. and various state, local and foreign jurisdictions. 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. The Company is currently subject to various U.S. state audits and an Indonesian tax audit for 2003 - 2007. The Company is generally not able to precisely estimate the ultimate settlement amounts or timing until after the close of an audit. The Company evaluates its tax positions and establishes liabilities for uncertain tax positions that may be challenged by local authorities and may not be fully sustained. Unrecognized tax benefits are reviewed on an ongoing basis and are adjusted for changing facts and circumstances, including progress of tax audits and closing of statutes of limitations. Based on information currently available, management believes that additional audit activity could be completed and/or statutes of limitations may close relating to existing unrecognized tax benefits. It is reasonably possible there could be a further reduction of $5,045 in prior years' unrecognized tax benefits in 2013. In July 2012, the Company received a Notice of Reassessment from the Canada Revenue Agency (the “CRA”) for 2004 to 2011, which would disallow the deductibility of inter-company dividends. These adjustments would increase Canadian federal and provincial tax due by $62,120 plus approximately $17,156 of interest, net of tax. The Company disagrees with the position taken by the CRA and believes it is without merit. The Company will vigorously contest the assessment through the Tax Court of Canada. A trial date has not yet been scheduled. In connection with the litigation process, the Company is required to deposit no less than one-half of the tax and interest assessed by the CRA. The Company has elected to deposit the entire amount of the dispute in order to suspend the continuing accrual of a 5% interest charge. Additionally, deposited amounts will earn interest of approximately 1% due upon a favorable outcome. A deposit was made and is recorded as a non-current asset valued at $89,220 as of December 31, 2012. Any Canadian tax ultimately due will be creditable in the parent company's U.S. federal tax return. The Company expects to be able to utilize the full amount of foreign tax credits generated in the statutorily allowed carry-back and carry-forward periods. Accordingly, should the Company not prevail in this dispute, the income statement charge will approximate the deficiency interest, net of tax. The Company believes it will prevail on the merits of the tax position. In accordance with prescribed recognition and measurement thresholds, no income tax accrual has been made for any uncertain tax positions related to the CRA reassessment. An unfavorable resolution of this matter could have a material effect on the Company's financial statements in the quarter in which a judgment is reached.

X
- Details
Name: | us-gaap_IncomeTaxDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- 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
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration