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Income Taxes | 12 Months Ended
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Dec. 31, 2011
Income Taxes [Abstract] |
Income Taxes | Note 13 — Income taxes The following table summarizes the components of the provision for income taxes from continuing operations:
|  | 2011 |  |  | 2010 |  |  | 2009 |
|  | (Dollars in thousands) |
Current: |  |  |  |  |  |  |  |  |  |  |  |
Federal |  | $ | (2,532 | ) |  |  | (37,476 | ) |  |  | (25,112 | )
State |  |  | 4,628 |  |  |  | 3,667 |  |  |  | 534 |
Foreign |  |  | 48,836 |  |  |  | 51,935 |  |  |  | 53,000 |
Deferred: |  |  |  |  |  |  |  |  |  |  |  |
Federal |  |  | (19,759 | ) |  |  | (356 | ) |  |  | 11,779 |
State |  |  | (878 | ) |  |  | (2,490 | ) |  |  | (6,393 | )
Foreign |  |  | (3,295 | ) |  |  | 2,722 |  |  |  | 3,168 |
|  | $ | 27,000 |  |  |  | 18,002 |  |  |  | 36,976 |
In 2009, the Company sold its interest in Airfoil Technologies International Singapore and several related entities and sold several entities in its Power Systems division. The company recorded a gain on the sale of these businesses of $272.3 million along with related taxes on the gain of $102.9 million. In December 2011, the Company sold its cargo and container businesses and recorded a gain on sale of $217.8 million along with related taxes of $91.0 million. The gain and related taxes are reported as discontinued operations. A significant portion of these tax changes are included as part of the deferred tax liability for unremitted foreign earnings At December 31, 2011, the cumulative unremitted earnings of other subsidiaries outside the United States, considered permanently reinvested, for which no income or withholding taxes have been provided, approximated $251.5 million. Such earnings are expected to be reinvested indefinitely and, as a result, no deferred tax liability has been recognized with regard to the remittance of such earnings. It is not practicable to estimate the income tax liability that might be incurred if such earnings were remitted to the United States. The following table summarizes the U.S. and non-U.S. components of income from continuing operations before taxes:
|  | 2011 |  |  | 2010 |  |  | 2009 |
|  | (Dollars in thousands) |
United States |  | $ | (8,191 | ) |  | $ | (8,164 | ) |  | $ | 30,747 |
Other |  |  | 156,894 |  |  |  | 115,856 |  |  |  | 132,818 |
|  | $ | 148,703 |  |  | $ | 107,692 |  |  | $ | 163,565 |
Reconciliations between the statutory federal income tax rate and the effective income tax rate are as follows:
|  | 2011 |  |  | 2010 |  |  | 2009 |
Federal statutory rate |  |  | 35.00 | % |  |  | 35.00 | % |  |  | 35.00 | %
Tax effect of International items |  |  | (14.04 | )% |  |  | (8.94 | )% |  |  | (3.76 | )%
State taxes, net of federal benefit |  |  | 1.15 | % |  |  | (0.46 | )% |  |  | (2.71 | )%
Uncertain tax contingencies |  |  | (2.59 | )% |  |  | (3.23 | )% |  |  | (4.21 | )%
Other, net |  |  | (1.36 | )% |  |  | (5.62 | )% |  |  | (1.71 | )%
|  |  | 18.16 | % |  |  | 16.72 | % |  |  | 22.61 | %
The Company and its subsidiaries are routinely subject to examinations by various taxing authorities. In conjunction with these examinations and as a regular practice, the Company establishes and/or adjusts reserves with respect to its uncertain tax positions as developments merit. We realized a net benefit of approximately $3.9 million, $3.5 million and $6.9 million in 2011, 2010 and 2009, respectively, as a result of reducing our reserves with respect to uncertain tax positions. These reductions principally resulted from the conclusion of various audits, the expiration of a number of applicable Statutes of Limitations and by certain adjustments to our reserves for prior tax years. During the third quarter of 2010, we determined that an out-of-period adjustment associated with tax returns filed and tax audit conclusions was required which reduced income tax expense by approximately $5.7 million. Management has determined that this adjustment was not material on a quantitative or qualitative basis to the prior period financial statements. During the fourth quarter of 2009, we determined that an out-of-period adjustment was required to correct our financial statement tax related balance sheet accounts. Correction of this error decreased deferred tax liabilities and our taxes payable by approximately $2.6 million and reduced income tax expense approximately $2.6 million. Based on our analysis, we concluded that this matter was not material on a quantitative or qualitative basis to the prior period financial statements. Significant components of the Company's deferred tax assets and liabilities at year end were as follows:
|  | 2011 |  |  | 2010 |
|  | (Dollars in thousands) |
Deferred tax assets: |  |  |  |  |  |  |  |
Tax loss and credit carryforwards |  | $ | 70,452 |  |  | $ | 61,278 |
Pension |  |  | 74,775 |  |  |  | 45,680 |
Reserves and accruals |  |  | 42,272 |  |  |  | 36,886 |
Other |  |  | 25,808 |  |  |  | 18,976 |
Less: valuation allowances |  |  | (66,305 | ) |  |  | (49,522 | )
Total deferred tax assets |  |  | 147,002 |  |  |  | 113,298 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
Property, plant and equipment |  |  | 24,877 |  |  |  | 30,741 |
Intangibles — stock acquisitions |  |  | 317,271 |  |  |  | 312,174 |
Unremitted foreign earnings |  |  | 166,764 |  |  |  | 98,057 |
Other |  |  | 18,681 |  |  |  | 7,911 |
Total deferred tax liabilities |  |  | 527,593 |  |  |  | 448,883 |
Net deferred tax liability |  | $ | (380,591 | ) |  | $ | (335,585 | )
Under the tax laws of various jurisdictions in which the Company operates, deductions or credits that cannot be fully utilized for tax purposes during the current year may be carried forward, subject to statutory limitations, to reduce taxable income or taxes payable in a future tax year. At December 31, 2011, the tax effect of such carry forwards approximated $70.4 million. Of this amount, $8.3 million has no expiration date, $0.3 million expires after 2011 but before the end of 2016 and $61.8 million expires after 2016. A portion of these carry forwards consist of tax losses and credits which were acquired in acquisitions by the Company and the utilization of these tax attributes are subject to an annual limitation imposed by Section 382 of the Internal Revenue Code, which limits a company's ability to deduct prior net operating losses following a more than 50 percent change in ownership. It is not expected that this annual limitation will prevent the Company from utilizing its carry forwards. The determination of state net operating loss carry forwards is dependent upon the U.S. subsidiaries' taxable income or loss, apportionment percentages and other respective state laws, which can change from year to year and impact the amount of such carry forward. The valuation allowance for deferred tax assets of $66.3 million and $49.5 million at December 31, 2011 and December 31, 2010, respectively, relates principally to the uncertainty of the utilization of certain deferred tax assets, primarily tax loss and credit carry forwards in various jurisdictions. The valuation allowance was calculated in accordance with accounting standards, which requires that a valuation allowance be established and maintained when it is "more likely than not" that all or a portion of deferred tax assets will not be realized. Uncertain Tax Positions: A reconciliation of the beginning and ending balances for liabilities associated with unrecognized tax benefits is as follows:
|  | 2011 |  |  | 2010 |  |  | 2009 |
|  | (Dollars in thousands) |
Balance at January 1 |  | $ | 89,281 |  |  | $ | 113,232 |  |  | $ | 114,667 |
Increase in unrecognized tax benefits related to prior years |  |  | 1,855 |  |  |  | 6,226 |  |  |  | 7,371 |
Decrease in unrecognized tax benefits related to prior years |  |  | (6,415 | ) |  |  | (10,887 | ) |  |  | (15,346 | )
Unrecognized tax benefits related to the current year |  |  | 4,246 |  |  |  | 1,956 |  |  |  | 12,348 |
Reductions in unrecognized tax benefits due to settlements |  |  | (7,678 | ) |  |  | (2,011 | ) |  |  | (1,314 | )
Reductions in unrecognized tax benefits due to lapse of applicable statute of limitations |  |  | (5,852 | ) |  |  | (16,209 | ) |  |  | (5,645 | )
Increase (decrease) in unrecognized tax benefits due to foreign currency translation |  |  | (411 | ) |  |  | (3,026 | ) |  |  | 1,151 |
Balance at December 31 |  | $ | 75,026 |  |  | $ | 89,281 |  |  | $ | 113,232 |
The total liabilities associated with the unrecognized tax benefits that, if recognized would impact the effective tax rate for continuing operations were $40.8 million at December 31, 2011. The Company accrues interest and penalties associated with unrecognized tax benefits in income tax expense in the consolidated statements of operations, and the corresponding liability is included in the consolidated balance sheets. The interest (benefit) expense (net of related tax benefits where applicable) and penalties reflected in income from continuing operations for the year ended December 31, 2011 was $(0.1) million and $0.3 million, respectively, ($(2.5) million and $1.8 million, respectively, for the year ended December 31, 2010 and $(0.6) million and $0.4 million, respectively, for the year ended December 31, 2009). The corresponding liabilities in the consolidated balance sheets for interest and penalties were $11.8 million and $9.2 million, respectively, at December 31, 2011 ($11.9 million and $8.5 million, respectively at December 31, 2010). The taxable years that remain subject to examination by major tax jurisdictions are as follows:
|  | Beginning |  |  | Ending |
United States |  |  | 2008 |  |  |  | 2011 |
Canada |  |  | 2004 |  |  |  | 2011 |
Czech Republic |  |  | 2001 |  |  |  | 2011 |
France |  |  | 2009 |  |  |  | 2011 |
Germany |  |  | 2003 |  |  |  | 2011 |
Ireland |  |  | 2007 |  |  |  | 2011 |
Italy |  |  | 2007 |  |  |  | 2011 |
Malaysia |  |  | 2007 |  |  |  | 2011 |
Singapore |  |  | 2005 |  |  |  | 2011 |
The Company and its subsidiaries are routinely subject to income tax examinations by various taxing authorities. As of December 31, 2011, the most significant tax examinations in process are in the jurisdictions of the Canada, the Czech Republic, Germany and France. It is uncertain as to when these examinations may be concluded and the ultimate outcome of such examinations. As a result of the uncertain outcome of these ongoing examinations, future examinations or the expiration of statutes of limitation for certain jurisdictions, it is reasonably possible that the related unrecognized tax benefits for tax positions taken could materially change from those recorded as liabilities at December 31, 2011. Due to the potential for resolution of certain non-US and U.S. examinations, and the expiration of various statutes of limitation, it is reasonably possible that the Company's unrecognized tax benefits may change within the next twelve months by a range of zero to $9.2 million.

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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 Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319 Reference 2: 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 3: 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 4: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 08 -Paragraph h -Article 4 Reference 5: 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 Reference 6: 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 7: 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 8: 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 + Details
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