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Income Taxes | 12 Months Ended
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Dec. 31, 2013
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes The following table summarizes the U.S. and non-U.S. components of income (loss) before provision (benefit) for income taxes:
| For the Year Ended December 31,
| 2011 |  | 2012 |  | 2013
| (Dollars in thousands)
U.S. | $ | 32,877 |  |  | $ | 29,422 |  |  | $ | 8,495 |
Non-U.S. | 110,414 |  |  | 105,065 |  |  | (48,597 | )
| $ | 143,291 |  |  | $ | 134,487 |  |  | $ | (40,102 | )
Income tax expense (benefit) consists of the following:
| For the Year Ended December 31,
| 2011 |  | 2012 |  | 2013
| (Dollars in thousands)
U.S income taxes: |  |  |  |  |
Current | $ | 16,988 |  |  | $ | (6,529 | ) |  | $ | 4,104 |
Deferred | (46,379 | ) |  | 4,543 |  |  | (5,652 | )
| (29,391 | ) |  | (1,986 | ) |  | (1,548 | )
Non-U.S. income taxes: |  |  |  |  |
Current | 18,173 |  |  | 12,371 |  |  | 5,422 |
Deferred | 1,325 |  |  | 6,462 |  |  | (16,717 | )
| 19,498 |  |  | 18,833 |  |  | (11,295 | )
Total income tax expense (benefit) | $ | (9,893 | ) |  | $ | 16,847 |  |  | $ | (12,843 | )
Income tax expense (benefit) differed from the amounts computed by applying the U.S. federal income tax rate of 35% to income before provision (benefit) for income taxes as set forth in the following table:
| For the Year Ended December 31,
| 2011 |  | 2012 |  | 2013
| (Dollars in thousands)
Tax at statutory U.S. federal rate | $ | 50,152 |  |  | $ | 47,071 |  |  | $ | (14,036 | )
U.S. valuation allowance, net | (45,989 | ) |  | (1,800 | ) |  | (700 | )
State taxes, net of federal tax benefit | 474 |  |  | 593 |  |  | (371 | )
U.S. tax return adjustments to estimated taxes | (455 | ) |  | 588 |  |  | (1,032 | )
Establishment (resolution) of uncertain tax positions | 1,507 |  |  | (8,118 | ) |  | (752 | )
Adjustment for foreign income taxed at different rates | (14,450 | ) |  | (15,553 | ) |  | 6,832 |
U.S. tax credits | — |  |  | (2,200 | ) |  | (2,577 | )
Non-U.S. tax exemptions, holidays and credits | (2,535 | ) |  | (4,259 | ) |  | — |
Other | 1,403 |  |  | 524 |  |  | (207 | )
Total income tax (benefit) expense | $ | (9,893 | ) |  | $ | 16,846 |  |  | $ | (12,843 | )
The tax effects of temporary differences that give rise to significant components of the deferred tax assets and deferred tax liabilities at December 31, 2012, and December 31, 2013 are set forth in the following table:
| At December 31,
| 2012 |  | 2013
| (Dollars in thousands)
Deferred tax assets: |  |  |
Postretirement and other employee benefits | $ | 51,646 |  |  | $ | 41,604 |
Foreign tax credit and other carryforwards | 54,102 |  |  | 46,283 |
Capitalized research and experimental costs | 999 |  |  | 20,243 |
Environmental reserves | 4,057 |  |  | 3,503 |
Inventory adjustments | 13,365 |  |  | 16,255 |
Capital loss | 3,222 |  |  | 2,697 |
Provision for rationalization charges | — |  |  | 17,410 |
Other | 9,052 |  |  | 5,889 |
Total gross deferred tax assets | 136,443 |  |  | 153,884 |
Less: valuation allowance | (26,312 | ) |  | (20,411 | )
Total deferred tax assets | 110,131 |  |  | 133,473 |
Deferred tax liabilities: |  |  |
Fixed assets | $ | 102,568 |  |  | $ | 109,824 |
Debt discount amortization | 9,720 |  |  | 6,620 |
Inventory | 9,531 |  |  | 9,212 |
Goodwill and acquired intangibles | 11,299 |  |  | 10,813 |
Other | 2,420 |  |  | 2,204 |
Total deferred tax liabilities | 135,538 |  |  | 138,673 |
Net deferred tax liability | $ | 25,407 |  |  | $ | 5,200 |
Deferred income tax assets and liabilities are classified on a net current and non-current basis within each tax jurisdiction. Net current deferred income tax assets are included in prepaid expenses and other current assets in the amount of $20.4 million as of December 31, 2012 and $37.1 million as of December 31, 2013. Net non-current deferred tax assets are separately stated as deferred income taxes in the amount of $6.2 million as of December 31, 2012 and $10.3 million as of December 31, 2013. Net current deferred tax liabilities are included in accrued income and other taxes in the amount of $10.0 million as of December 31, 2012 and $10.9 million as of December 31, 2013. Net non-current deferred tax liabilities are separately stated as deferred income taxes in the amount of $42.0 million at December 31, 2012 and $41.7 million at December 31, 2013. We continue to assess the need for valuation allowances against deferred tax assets based on determinations of whether it is more likely than not that deferred tax benefits will be realized through the generation of future taxable income. Appropriate consideration is given to all available evidence, both positive and negative, in assessing the need for a valuation allowance. Examples of positive evidence would include a strong earnings history, an event or events that would increase our taxable income through a continued reduction of expenses, and tax planning strategies that would indicate an ability to realize deferred tax assets. In circumstances where the significant positive evidence does not yet outweigh the negative evidence in regards to whether or not a valuation allowance is required, we have maintained valuation allowances on those deferred tax assets. Valuation allowance activity for the years ended December 31, 2011, 2012 and 2013 is as follows:
| For the year ended December 31,
| 2011 |  | 2012 |  | 2013
| (Dollars in thousands)
Balance at January 1 | $ | 74,945 |  |  | $ | 25,509 |  |  | $ | 26,312 |
(Credited) / charged to income | (49,403 | ) |  | (1,800 | ) |  | (614 | )
Translation adjustment | (391 | ) |  | (52 | ) |  | (746 | )
Changes attributable to movement in underlying assets | 358 |  |  | 2,655 |  |  | (4,541 | )
Balance at December 31 | $ | 25,509 |  |  | $ | 26,312 |  |  | $ | 20,411 |
We have total foreign tax credit carryforwards of $22.1 million at December 31, 2013, all of which expire in 2016. In addition, we have state carryforwards on a gross tax affected basis of $12.8 million, which can be carried forward from 5 to 20 years. Prior to 2011, a full valuation allowance position existed on state net operating loss ("NOL") carryforward deferred tax assets. We have assessed the need for valuation allowances against deferred tax assets based on determinations of whether it is more likely than not that deferred tax benefits will be realized through the generation of future taxable income. Appropriate consideration is given to all available evidence, both positive and negative, in assessing the need for a valuation allowance, including existing level of profitability and recently available projections of future taxable income, which are comparable with current year results. Based on this assessment, we released valuation allowances of $0.7 million in 2013 relating to the state NOL carryforwards that are expected to be utilized in future years. The remaining NOL carryforwards and certain other state deferred tax assets, including tax credits, will continue to have a valuation allowance The amount of state net operating loss carryforwards reflected in the table above has been reduced by $0.5 million as a result of unrealized stock option deductions. We have non-U.S. loss and tax credit carryforwards on a gross tax effected basis of $16.1 million, which can be carried forward from 7 years to indefinitely. As of December 31, 2013, we had unrecognized tax benefits of $7.2 million, the $4.8 million of which, if recognized, would have a favorable impact on our effective tax rate. We have elected to report interest and penalties related to uncertain tax positions as income tax expense. Accrued interest and penalties were $0.6 million as of December 31, 2011, $1.0 million as of December 31, 2012 and $0.6 million as of December 31, 2013. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
| December 31,
| 2011 |  | 2012 |  | 2013
| (Dollars in thousands)
Balance at January 1 | $ | 13,719 |  |  | $ | 16,788 |  |  | $ | 9,769 |
Additions based on tax positions related to the current year | — |  |  | 90 |  |  | 881 |
Additions for tax positions of prior years | 3,910 |  |  | 4,643 |  |  | 323 |
Reductions for tax positions of prior years | (165 | ) |  | (11,019 | ) |  | (2,779 | )
Lapse of statutes of limitations | (627 | ) |  | (163 | ) |  | — |
Settlements | — |  |  | (576 | ) |  | (988 | )
Foreign currency impact | (49 | ) |  | 6 |  |  | (3 | )
Balance at December 31 | $ | 16,788 |  |  | $ | 9,769 |  |  | $ | 7,203 |
We anticipate that $5.1 million of the amount of unrecognized tax benefits may be reversed within the next twelve months due to settlements and the expiration of statutes of limitation. We file income tax returns in the U.S. federal jurisdiction, and various state and foreign jurisdictions. We are currently under federal audit in the U.S. for the 2010 tax year. All U.S. tax years prior to 2010 are generally closed by statute or have been audited and settled with the applicable domestic tax authorities. We have one issue outstanding from the 2008 U.S. federal audit, which is under appeal. All other non-U.S. jurisdictions are still open to examination beginning after 2007. We have not provided for U.S. income taxes or foreign withholding taxes on the differences between the financial reporting basis in our foreign investments, and the tax basis in such investments, which are considered to be permanently reinvested as of December 31, 2013 (excluding Previously Taxed Income). Any outside basis difference would be taxable upon the sale or liquidation of the foreign subsidiaries, or upon the remittance of dividends. The measurement of the unrecognized U.S. income taxes, if any, that may be associated with these outside basis differences, is not practicable.

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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 15 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319 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 9 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319 Reference 5: 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 6: 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 7: 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 8: 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. + Details
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