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INCOME TAXES: | 12 Months Ended
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Dec. 31, 2012
INCOME TAXES: |
INCOME TAXES: | NOTE 4—INCOME TAXES: The domestic and foreign components of pretax income are as follows:
|  | 2012 |  | 2011 |  | 2010 |
Domestic |  | $ | 64,173 |  | $ | 56,651 |  | $ | 59,308 |
Foreign |  | 9,991 |  | 4,261 |  | 13,760 |
|  | $ | 74,164 |  | $ | 60,912 |  | $ | 73,068 |
The provision for income taxes is comprised of the following:
|  | 2012 |  | 2011 |  | 2010 |
Current: |  |  |  |  |  |  |
Federal |  | $ | 24,312 |  | $ | 15,568 |  | $ | 10,251 |
Foreign |  | 231 |  | 559 |  | 806 |
State |  | 1,914 |  | 863 |  | 1,455 |
|  | 26,457 |  | 16,990 |  | 12,512 |
Deferred: |  |  |  |  |  |  |
Federal |  | (6,857 | ) | (1,230 | ) | 5,622 |
Foreign |  | 1,710 |  | 1,221 |  | 2,518 |
State |  | 850 |  | (7 | ) | (647 | )
|  | (4,297 | ) | (16 | ) | 7,493 |
|  | $ | 22,160 |  | $ | 16,974 |  | $ | 20,005 |
Significant components of the Company’s net deferred tax liability at year end were as follows:
|  | December 31, |
|  | 2012 |  | 2011 |
Deferred tax assets: |  |  |  |  |
Accrued customer promotions |  | $ | 3,971 |  | $ | 1,920 |
Deferred compensation |  | 19,485 |  | 15,593 |
Postretirement benefits |  | 8,127 |  | 9,139 |
Other accrued expenses |  | 7,749 |  | 6,102 |
Foreign subsidiary tax loss carry forward |  | 13,791 |  | 16,406 |
Tax credit carry forward |  | 1,066 |  | 1,086 |
Realized capital losses |  | 1,366 |  | 1,349 |
Unrealized capital loss |  | 5,848 |  | 6,401 |
|  | 61,403 |  | 57,996 |
Valuation allowance |  | (2,040 | ) | (2,190 | )
Total deferred tax assets |  | $ | 59,363 |  | $ | 55,806 |
Deferred tax liabilities: |  |  |  |  |
Depreciation |  | $ | 33,858 |  | $ | 35,103 |
Deductible goodwill and trademarks |  | 42,450 |  | 38,635 |
Accrued export company commissions |  | 5,117 |  | 4,649 |
Employee benefit plans |  | 876 |  | 2,248 |
Inventory reserves |  | 256 |  | 1,733 |
Prepaid insurance |  | 697 |  | 289 |
Accounts receivable |  | — |  | 733 |
Deferred gain on sale of real estate |  | 8,169 |  | 7,644 |
Total deferred tax liabilities |  | $ | 91,423 |  | $ | 91,034 |
Net deferred tax liability |  | $ | 32,060 |  | $ | 35,228 |
At December 31, 2012, the Company has provided a valuation allowance relating to $1,366 of capital loss carry forwards which begin to expire in 2013. At December 31, 2012, the Company has recognized $674 of benefits related to foreign subsidiary tax credit carry forwards. The carry forward credits expire in 2017. A valuation allowance has been established for the carry forward losses to reduce the future income tax benefits to amounts expected to be realized. The Company has also recognized $392 of benefits related to state tax credit carry forwards. At December 31, 2012, the tax benefits of foreign subsidiary tax loss carry forwards expiring by year are as follows: $415 in 2015, $374 in 2026, $654 in 2027, $6,724 in 2028, $4,785 in 2029 and $839 in 2031. The effective income tax rate differs from the statutory rate as follows:
|  | 2012 |  | 2011 |  | 2010 |
U.S. statutory rate |  | 35.0 | % | 35.0 | % | 35.0 | %
State income taxes, net |  | 1.1 |  | 1.2 |  | 1.1 |
Exempt municipal bond interest |  | (0.5 | ) | (0.5 | ) | (0.4 | )
Foreign tax rates |  | (1.6 | ) | (0.4 | ) | (2.0 | )
Qualified domestic production activities deduction |  | (3.1 | ) | (2.5 | ) | (2.6 | )
Tax credits receivable |  | (0.9 | ) | (0.4 | ) | (0.2 | )
Adjustment of deferred tax balances |  | (0.5 | ) | (1.7 | ) | — |
Reserve for uncertain tax benefits |  | (0.3 | ) | (0.6 | ) | (2.3 | )
Other, net |  | 0.7 |  | (2.2 | ) | (1.2 | )
Effective income tax rate |  | 29.9 | % | 27.9 | % | 27.4 | %
The Company has not provided for U.S. federal or foreign withholding taxes on $8,868 and $6,410 of foreign subsidiaries’ undistributed earnings as of December 31, 2012 and December 31, 2011, respectively, because such earnings are considered to be permanently reinvested. It is not practicable to determine the amount of income taxes that would be payable upon remittance of the undistributed earnings. The Company recognizes interest and penalties related to unrecognized tax benefits in the provision for income taxes on the Consolidated Statements of Earnings , Comprehensive Earnings and Retained Earnings. At December 31, 2012 and 2011, the Company had unrecognized tax benefits of $6,677 and $6,804, respectively. Included in this balance is $4,306 and $4,199, respectively, of unrecognized tax benefits that, if recognized, would favorably affect the annual effective income tax rate. As of December 31, 2012 and 2011, $1,189 and $1,541, respectively, of interest and penalties were included in the liability for uncertain tax positions. A reconciliation of the beginning and ending balances of the total amounts of unrecognized tax benefits is as follows:
|  | 2012 |  | 2011 |  | 2010 |
Unrecognized tax benefits at January 1 |  | $ | 6,804 |  | $ | 8,138 |  | $ | 14,370 |
Increases in tax positions for the current year |  | 727 |  | 320 |  | 632 |
Reductions in tax positions for lapse of statute of limitations |  | (854 | ) | (668 | ) | (1,122 | )
Reductions in tax positions for withdrawal of positions previously taken |  | — |  | — |  | (5,256 | )
Reductions in tax positions for effective settlements |  | — |  | (986 | ) | (486 | )
Unrecognized tax benefits at December 31 |  | $ | 6,677 |  | $ | 6,804 |  | $ | 8,138 |
The Company is subject to taxation in the U.S. and various state and foreign jurisdictions. The Company remains subject to examination by U.S. federal and state and foreign tax authorities for the years 2009 through 2011. With few exceptions, the Company is no longer subject to examinations by tax authorities for the year 2008 and prior. The Company is currently subject to a U.S. federal examination for tax years 2009 and 2010. The field work has not yet concluded and the Company is unable to determine the outcome at this time. The Company’s Canadian subsidiary is currently subject to examination by the Canada Revenue Agency for tax years 2005 and 2006. The Company is unable to determine the outcome of the examination at this time. In addition, the Company is currently subject to various state tax examinations. Although the Company is unable to determine the ultimate outcome of the ongoing examinations, the Company believes that its liability for uncertain tax positions relating to these jurisdictions for such years is adequate.

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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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