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Income Taxes | 12 Months Ended
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Dec. 31, 2011
Income Taxes [Abstract] |
Income Taxes |
14. | Income Taxes
Income from continuing operations for the three years ended December 31, was as follows:
|  | 2011 |  |  | 2010 |  |  | 2009 |
U.S. operations |  | $ | 40,282 |  |  | $ | 26,297 |  |  | $ | 12,103 |
Foreign operations |  |  | 8,448 |  |  |  | 8,430 |  |  |  | (36,423 | )
Total |  | $ | 48,730 |  |  | $ | 34,727 |  |  | $ | (24,320 | )
Income tax expense (benefit) for the three years ended December 31, was as follows:
|  | 2011 |  |  | 2010 |  |  | 2009 |
Current: |  |  |  |  |  |  |  |  |
Federal |  | $ | 10,321 |  |  | $ | 6,756 |  |  | $ | (337 | )
Foreign |  |  | 2,277 |  |  |  | 3,005 |  |  |  | 1,284 |
State |  |  | 1,450 |  |  |  | 1,214 |  |  |  | 236 |
|  | $ | 14,048 |  |  | $ | 10,975 |  |  | $ | 1,183 |
Deferred: |  |  |  |  |  |  |  |  |  |  |  |
Federal |  | $ | 2,330 |  |  | $ | (10,541 | ) |  | $ | 1,897 |
Foreign |  |  | (203 | ) |  |  | (248 | ) |  |  | (1,444 | )
State |  |  | (158 | ) |  |  | (262 | ) |  |  | 285 |
|  | $ | 1,969 |  |  | $ | (11,051 | ) |  | $ | 738 |
Total: |  |  |  |  |  |  |  |  |  |  |  |
Federal |  | $ | 12,651 |  |  | $ | (3,785 | ) |  | $ | 1,560 |
Foreign |  |  | 2,074 |  |  |  | 2,757 |  |  |  | (160 | )
State |  |  | 1,292 |  |  |  | 952 |  |  |  | 521 |
|  | $ | 16,017 |  |  | $ | (76 | ) |  | $ | 1,921 |
U.S. income taxes have not been provided on approximately $22,282 of undistributed earnings of non-U.S. subsidiaries. We do not have any plans to repatriate the undistributed earnings. Any repatriation from foreign subsidiaries that would result in incremental U.S. taxation is not being considered. It is management's belief that reinvesting these earnings outside the U.S. is the most efficient use of capital. We have Dutch and German tax loss carryforwards of approximately $6,460 and $15,271, respectively. If unutilized, the Dutch tax loss carryforward will expire after 9 years. The German tax loss carryforward has no expiration date. Because of the uncertainty regarding realization of the Dutch tax loss carryforward, a valuation allowance was established. This valuation allowance decreased in 2011 due to results of operations and an intercompany transaction that had no impact on 2011 Net Earnings. We have foreign tax credit carryforwards of approximately $8,554. If unutilized, foreign tax credit carryforwards will expire in 2020. Based upon evaluation, as of December 31, 2011, no valuation allowance has been recorded. A valuation allowance for the remaining deferred tax assets is not required since it is more likely than not that they will be realized through carryback to taxable income in prior years, future reversals of existing taxable temporary differences and future taxable income. Our effective income tax rate varied from the U.S. federal statutory tax rate for the three years ended December 31, was as follows:
|  | 2011 |  |  | 2010 |  |  | 2009 |
Tax at statutory rate |  |  | 35.0 | % |  |  | 35.0 | % |  |  | (35.0 | %)
Increases (decreases) in the tax rate from: |  |  |  |  |  |  |  |  |
State and local taxex, net of federal benefit |  |  | 2.0 |  |  |  | 0.7 |  |  |  | 1.1 |
Effect of foreign operations |  |  | 0.5 |  |  |  | 0.5 |  |  |  | (7.0 | )
International restructuring |  |  | - |  |  |  | (31.4 | ) |  |  | (9.4 | )
Goodwill impairment - non-deductible |  |  | - |  |  |  | - |  |  |  | 56.9 |
Effect of changes in valuation allowances |  |  | - |  |  |  | 0.1 |  |  |  | (0.7 | )
Domestic production activities deduction |  |  | (1.6 | ) |  |  | (3.0 | ) |  |  | 0.8 |
Other, net |  |  | (3.0 | ) |  |  | (2.1 | ) |  |  | 1.2 |
Effective income tax rate |  |  | 32.9 | % |  |  | (0.2 | %) |  |  | 7.9 | %
Deferred tax assets and liabilities were comprised of the following as of December 31:
|  | 2011 |  |  | 2010 |  |  | 2009 |
Deferred tax assets: |  |  |  |  |  |  |  |  |
Inventories, principally due to additional costs inventoried for |  |  |  |  |  |  |  |  |  |  |  |
tax purposes and changes in inventory reserves |  | $ | 426 |  |  | $ | 1,081 |  |  | $ | 867 |
Employee wages and benefits, principally due to accruals for |  |  |  |  |  |  |  |  |  |  |  |
financial reporting purposes |  |  | 20,910 |  |  |  | 17,948 |  |  |  | 16,050 |
Warranty reserves accrued for financial reporting purposes |  |  | 2,625 |  |  |  | 2,175 |  |  |  | 1,803 |
Accounts receivable, principally due to allowance for doubtful |  |  |  |  |  |  |  |  |  |  |  |
accounts and tax accounting method for equipment rentals |  |  | 1,464 |  |  |  | 1,252 |  |  |  | 1,396 |
Tax loss carryforwards |  |  | 5,915 |  |  |  | 12,725 |  |  |  | 12,987 |
Valuation allowance |  |  | (3,229 | ) |  |  | (9,170 | ) |  |  | (9,131 | )
Tax credit carryforwards |  |  | 8,554 |  |  |  | 10,119 |  |  |  | 2,385 |
Other |  |  | 1,777 |  |  |  | 1,937 |  |  |  | 1,177 |
Total deferred tax assets |  | $ | 38,442 |  |  | $ | 38,067 |  |  | $ | 27,534 |
Deferred tax liabilities: |  |  |  |  |  |  |  |  |  |  |  |
Property, Plant and Equipment, principally due to differences in |  |  |  |  |  |  |  |  |  |  |  |
depreciation and related gains |  | $ | 9,167 |  |  | $ | 8,562 |  |  | $ | 8,592 |
Goodwill and Intangible Assets |  |  | 7,093 |  |  |  | 8,390 |  |  |  | 9,086 |
Total deferred tax liabilities |  | $ | 16,260 |  |  | $ | 16,952 |  |  | $ | 17,678 |
Net deferred tax assets |  | $ | 22,182 |  |  | $ | 21,115 |  |  | $ | 9,856 |
The valuation allowance at December 31, 2011, principally applies to Dutch tax loss carryforwards that, in the opinion of management, are more likely than not to expire unutilized. However, to the extent that tax benefits related to these carryforwards are realized in the future, the reduction in the valuation allowance will reduce income tax expense. In 2011 and 2010 we recorded tax benefits directly to Shareholders' Equity of $1,266 and $1,724, respectively, relating to our stock plans. In 2009, we recorded tax benefits directly to Shareholders' Equity of $120 relating to our ESOP and stock plans. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
Balance at January 1, 2011 |  | $ | 5,272 |
Decreases as a result of tax positions taken during a prior period |  |  | (765 | )
Increases as a result of tax positions taken during the current year |  |  | 828 |
Decreases for tax positions related to acquired entities during a prior period |  |  | - |
Decreases relating to settlements with taxing authorities |  |  | (193 | )
Reductions as a result of a lapse of the applicable statute of limitations |  |  | (1,551 | )
Decreases as a result of foreign currency fluctuations |  |  | (167 | )
Balance at December 31, 2011 |  | $ | 3,424 |
Included in the balance of unrecognized tax benefits at December 31, 2011 are potential benefits of $3,209 that, if recognized, would affect the effective tax rate from continuing operations. We recognize potential accrued interest and penalties related to unrecognized tax benefits as a component of income tax expense. In addition to the liability of $3,424 for unrecognized tax benefits as of December 31, 2011 was approximately $427 for accrued interest and penalties. To the extent interest and penalties are not assessed with respect to uncertain tax positions, the amounts accrued will be revised and reflected as an adjustment to income tax expense. We are subject to U.S. federal income tax as well as income tax of numerous state and foreign jurisdictions. We are generally no longer subject to U.S. federal tax examinations for taxable years before 2008 and with limited exceptions, state and foreign income tax examinations for taxable years before 2004. The Internal Revenue Service has just begun an examination of our income tax return for the 2009 tax year. It is possible that the examination phase of the audit may conclude in the next 12 months, and that the related unrecognized tax benefits for tax positions taken may change from those recorded as liabilities for uncertain tax positions in our financial statements at December 31, 2011. Although the outcome of this matter cannot currently be determined, we believe adequate provision has been made for any potential unfavorable financial statement impact. We are currently undergoing income examinations in various state and foreign jurisdictions covering 2004 to 2010. Although the final outcome of these examinations cannot be currently determined, we believe that we have adequate reserves with respect to these examinations. We do not anticipate that total unrecognized tax benefits will change significantly within the next 12 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 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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