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Income Taxes (Tables) | 12 Months Ended
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Dec. 31, 2011
Income Taxes [Abstract] |
Components of income (loss) from continuing operations before taxes and noncontrolling interest | Income (loss) from continuing operations before taxes and noncontrolling interests consists of the following components:
|  | Years ended December 31, |
|  | 2011 |  |  | 2010 |  |  | 2009 |
Domestic |  | $ | 2,143 |  |  | $ | 32,493 |  |  | $ | (54,041 | )
Foreign |  |  | 328,973 |  |  |  | 373,040 |  |  |  | 14,326 |
|  | $ | 331,116 |  |  | $ | 405,533 |  |  | $ | (39,715 | )
Components of income taxes | Significant components of income taxes are as follows:
|  | Years ended December 31, |
|  | 2011 |  |  | 2010 |  |  | 2009 |
Current: |  |  |  |  |  |  |  |  |
Federal |  | $ | 10,968 |  |  | $ | 9,823 |  |  | $ | 817 |
State and local |  |  | (801 | ) |  |  | 2,434 |  |  |  | 505 |
Foreign |  |  | 66,844 |  |  |  | 59,459 |  |  |  | 28,435 |
|  |  | 77,011 |  |  |  | 71,716 |  |  |  | 29,757 |
Deferred: |  |  |  |  |  |  |  |  |  |  |  |
Federal |  |  | 6,188 |  |  |  | (949 | ) |  |  | (6,332 | )
State and local |  |  | (2,286 | ) |  |  | 2,108 |  |  |  | 286 |
Foreign |  |  | 10,206 |  |  |  | (27,635 | ) |  |  | (6,911 | )
|  |  | 14,108 |  |  |  | (26,476 | ) |  |  | (12,957 | )
Total income tax expense |  | $ | 91,119 |  |  | $ | 45,240 |  |  | $ | 16,800 |
Deferred tax assets and liabilities | Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts for income tax purposes. Significant components of the Company’s deferred tax assets and liabilities are as follows:
|  | December 31, |
|  | 2011 |  |  | 2010 |
Deferred tax assets: |  |  |  |  |  |
Pension and other retiree obligations |  | $ | 48,810 |  |  | $ | 44,054 |
Inventories |  |  | 10,711 |  |  |  | 11,346 |
Net operating loss carryforwards |  |  | 106,621 |  |  |  | 158,264 |
Tax credit carryforwards |  |  | 11,225 |  |  |  | 11,871 |
Other accruals and reserves |  |  | 40,494 |  |  |  | 53,369 |
Total gross deferred tax assets |  |  | 217,861 |  |  |  | 278,904 |
Less valuation allowance |  |  | (102,863 | ) |  |  | (145,201 | )
|  |  | 114,998 |  |  |  | 133,703 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
Tax over book depreciation |  |  | (16,208 | ) |  |  | (20,425 | )
Earnings not permanently reinvested |  |  | (25,960 | ) |  |  | (39,074 | )
Convertible debentures |  |  | (105,830 | ) |  |  | (64,440 | )
Other - net |  |  | (2,515 | ) |  |  | (2,572 | )
Total gross deferred tax liabilities |  |  | (150,513 | ) |  |  | (126,511 | )
Net deferred tax assets (liabilities) |  | $ | (35,515 | ) |  | $ | 7,192 |
Federal statutory income tax rate reconciliation | A reconciliation of income tax expense at the U.S. federal statutory income tax rate to actual income tax provision is as follows:
|  | Years ended December 31, |
|  | 2011 |  |  | 2010 |  |  | 2009 |
Tax at statutory rate |  | $ | 115,891 |  |  | $ | 141,937 |  |  | $ | (13,900 | )
State income taxes, net of U.S. federal tax benefit |  |  | (2,005 | ) |  |  | 2,952 |  |  |  | 513 |
Effect of foreign operations |  |  | (52,609 | ) |  |  | (69,034 | ) |  |  | 14,731 |
Unrecognized tax benefits |  |  | 4,869 |  |  |  | (1,823 | ) |  |  | 1,395 |
Change in valuation allowance on U.S. deferred tax asset |  |  | - |  |  |  | (36,229 | ) |  |  | - |
Change in valuation allowance on non-U.S. deferred tax assets |  |  | (5,554 | ) |  |  | (21,671 | ) |  |  | 715 |
Tax benefit of operating loss carryforwards |  |  | (1,588 | ) |  |  | (8,799 | ) |  |  | (2,158 | )
Foreign income taxable in the U.S. |  |  | 22,822 |  |  |  | 31,294 |  |  |  | 976 |
Tax on foreign dividends paid to the U.S. |  |  | 15,453 |  |  |  | 1,417 |  |  |  | - |
U.S. foreign tax credits |  |  | (12,322 | ) |  |  | - |  |  |  | - |
Effect of statutory rate changes on deferred tax assets |  |  | 9,040 |  |  |  | 1,128 |  |  |  | 1,995 |
Settlement agreement gain |  |  | - |  |  |  | - |  |  |  | (9,868 | )
Non-deductible expenses related to VPG spin-off |  |  | - |  |  |  | 1,945 |  |  |  | 1,265 |
Executive employment agreement charges |  |  | 173 |  |  |  | 222 |  |  |  | 20,238 |
Other |  |  | (3,051 | ) |  |  | 1,901 |  |  |  | 898 |
Total income tax expense |  | $ | 91,119 |  |  | $ | 45,240 |  |  | $ | 16,800 |
Net operating loss carryforwards | At December 31, 2011, the Company had the following significant net operating loss carryforwards for tax purposes:
|  |  | Expires
Austria | $7,876 |  | No expiration
Belgium | 184,610 |  | No expiration
Brazil | 19,674 |  | No expiration
Germany | 46,098 |  | No expiration
Israel | 128,425 |  | No expiration
Netherlands | 42,791 |  | 2012 - 2019
Summary of significant tax credit carryforwards available | At December 31, 2011, the Company had the following significant tax credit carryforwards available:
|  |  | Expires
U.S. alternative minimum tax | $4,696 |  | No expiration
U.S. foreign tax credit | 1,198 |  | 2020
California research credit | 6,834 |  | No expiration
Unrecognized tax benefits | The following table summarizes changes in the liabilities associated with unrecognized tax benefits:
|  | Years ended December 31, |
|  | 2011 |  |  | 2010 |  |  | 2009 |
Balance at beginning of year |  | $ | 54,285 |  |  | $ | 54,463 |  |  | $ | 47,778 |
Addition based on tax positions related to the current year |  |  | 2,459 |  |  |  | 1,916 |  |  |  | 2,491 |
Addition based on tax positions related to prior years |  |  | 10,918 |  |  |  | 3,090 |  |  |  | 4,684 |
Currency translation adjustments |  |  | (922 | ) |  |  | 451 |  |  |  | 417 |
Reduction based on tax positions related to prior years |  |  | (3,293 | ) |  |  | (670 | ) |  |  | - |
Reduction for settlements |  |  | (9,604 | ) |  |  | (3,289 | ) |  |  | (737 | )
Reduction for lapses of statute of limitation |  |  | (35 | ) |  |  | (1,676 | ) |  |  | (170 | )
Balance at end of year |  | $ | 53,808 |  |  | $ | 54,285 |  |  | $ | 54,463 |

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