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Income Taxes | 12 Months Ended
--- | ---
Dec. 31, 2012
Income Tax Disclosure [Abstract] |
Income Tax Disclosure | Income Taxes The Company's income before income taxes and income tax expense for continuing operations, each by tax jurisdiction, consisted of the following:
|  | Year ended December 31,
|  | 2012 |  | 2011 |  | 2010
|  | (dollars in thousands)
Income before income taxes: |  |  |  |  |  |
Domestic |  | $ | 11,920 |  |  | $ | 49,060 |  |  | $ | 29,980 |
Foreign |  | 30,340 |  |  | 30,680 |  |  | 26,450 |
Total income before income taxes |  | $ | 42,260 |  |  | $ | 79,740 |  |  | $ | 56,430 |
Current income tax expense: |  |  |  |  |  |
Federal |  | $ | 8,250 |  |  | $ | 4,500 |  |  | $ | 930 |
State and local |  | 1,860 |  |  | 2,490 |  |  | 70 |
Foreign |  | 4,190 |  |  | 9,890 |  |  | 8,800 |
Total current income tax expense |  | 14,300 |  |  | 16,880 |  |  | 9,800 |
Deferred income tax expense (benefit): |  |  |  |  |  |
Federal |  | (6,200 | ) |  | 10,390 |  |  | 9,930 |
State and local |  | (750 | ) |  | 830 |  |  | (1,310 | )
Foreign |  | (1,380 | ) |  | 830 |  |  | (920 | )
Total deferred income tax expense |  | (8,330 | ) |  | 12,050 |  |  | 7,700 |
Income tax expense |  | $ | 5,970 |  |  | $ | 28,930 |  |  | $ | 17,500 |
The components of deferred taxes at December 31, 2012 and 2011 are as follows:
|  | 2012 |  | 2011
|  | (dollars in thousands)
Deferred tax assets: |  |  |  |
Accounts receivable |  | $ | 1,110 |  |  | $ | 1,210 |
Inventories |  | 5,670 |  |  | 5,730 |
Accrued liabilities and other long-term liabilities |  | 34,880 |  |  | 32,110 |
Tax loss and credit carryforwards |  | 6,740 |  |  | 5,190 |
Gross deferred tax asset |  | 48,400 |  |  | 44,240 |
Valuation allowances |  | (4,440 | ) |  | (2,950 | )
Net deferred tax asset |  | 43,960 |  |  | 41,290 |
Deferred tax liabilities: |  |  |  |
Property and equipment |  | (19,800 | ) |  | (20,330 | )
Goodwill and other intangible assets |  | (60,990 | ) |  | (63,490 | )
Other, principally deferred income |  | (3,860 | ) |  | (2,120 | )
Gross deferred tax liability |  | (84,650 | ) |  | (85,940 | )
Net deferred tax liability |  | $ | (40,690 | ) |  | $ | (44,650 | )
The following is a reconciliation of income tax expense computed at the U.S. federal statutory rate to income tax expense allocated to income from continuing operations before income taxes:
|  | 2012 |  | 2011 |  | 2010
|  | (dollars in thousands)
U.S. federal statutory rate |  | 35 | % |  | 35 | % |  | 35 | %
Tax at U.S. federal statutory rate |  | $ | 14,790 |  |  | $ | 27,910 |  |  | $ | 19,750 |
State and local taxes, net of federal tax benefit |  | 730 |  |  | 2,440 |  |  | 650 |
Differences in statutory foreign tax rates |  | (4,920 | ) |  | (2,250 | ) |  | (1,720 | )
Change in recognized tax benefits |  | (1,320 | ) |  | (700 | ) |  | (270 | )
Tax holiday |  | (1,160 | ) |  | — |  |  | — |
Restructuring (benefits)/charges |  | (2,400 | ) |  | 1,300 |  |  | — |
Noncontrolling interest |  | (790 | ) |  | — |  |  | — |
Net change in valuation allowance |  | 1,600 |  |  | 130 |  |  | (1,300 | )
Other, net |  | (560 | ) |  | 100 |  |  | 390 |
Income tax expense |  | $ | 5,970 |  |  | $ | 28,930 |  |  | $ | 17,500 |
The Company has recorded a deferred tax asset of $3.1 million related to various state operating loss carryforwards. The majority of the state tax loss carryforwards expire between 2024 and 2027. The Company has recorded valuation allowances of $4.4 million and $3.0 million as of December 31, 2012 and 2011, respectively, against certain deferred tax assets. Based on expected future taxable income due to the reversal of existing U.S. federal deferred tax liabilities, the Company believes it is more likely than not that all of the U.S. federal deferred tax assets will be realized. In general, it is the practice and intention of the Company to reinvest the earnings of its non-U.S. subsidiaries in those operations. As of December 31, 2012, the Company has not made a provision for U.S. or additional non-U.S. withholding taxes on approximately $180.4 million of undistributed earnings of non-U.S. subsidiaries that are considered to be permanently reinvested. Generally, such amounts become subject to U.S. taxation upon remittance of dividends and under certain other circumstances. It is not practicable to estimate the amount of deferred tax liability related to investments in these non-U.S. subsidiaries. Unrecognized tax benefits The Company has approximately $21.7 million and $13.4 million of unrecognized tax benefits ("UTB's") as of December 31, 2012 and 2011, respectively. If the unrecognized tax benefits were recognized, the impact to the Company's effective tax rate would be to reduce reported income tax expense for the years ended December 31, 2012 and 2011 approximately $14.0 million and $9.3 million, respectively. A reconciliation of the change in the UTB's and related accrued interest and penalties for the years ended December 31, 2012 and 2011 is as follows:
|  | Unrecognized Tax Benefits
|  | (dollars in thousands)
Balance at December 31, 2010 |  | $ | 13,150 |
Tax positions related to current year: |  |
Additions |  | 1,340 |
Tax positions related to prior years: |  |
Additions |  | 870 |
Reductions |  | (475 | )
Settlements |  | — |
Lapses in the statutes of limitations |  | (1,495 | )
Balance at December 31, 2011 |  | $ | 13,390 |
Tax positions related to current year: |  |
Additions |  | 3,990 |
Tax positions related to prior years: |  |  |
Additions |  | 6,760 |
Reductions |  | (320 | )
Settlements |  | (720 | )
Lapses in the statutes of limitations |  | (1,370 | )
Balance at December 31, 2012 |  | $ | 21,730 |
In addition to the UTB's summarized above, the Company has recorded approximately $1.6 million and $1.8 million in potential interest and penalties associated with uncertain tax positions as of December 31, 2012 and 2011, respectively. The increase in UTB's and estimated liabilities for interest and penalties for tax positions related to prior years is primarily due to the Company's business acquistions during 2012. The Company maintains an indemnification asset for certain acquired UTB's and corresponding interest and penalties. The Company is subject to U.S. federal, state and local, and certain non-U.S. income tax examinations for tax years 2002 through 2012. There is currently one non-U.S. income tax examination in process. The Company does not believe that the results of this examination will have a significant impact on the Company's tax position or its effective tax rate. Management monitors changes in tax statutes and regulations and the issuance of judicial decisions to determine the potential impact to unrecognized tax benefits and is not aware of, nor does it anticipate, any material subsequent events that could have a significant impact on the Company's financial position during the next twelve months.

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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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